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FG Reveals Plans to Revive Steel Industry and Cut Import Dependence

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Ajaokuta steel mill complex

CEM REPORT, TECHNOLOGY | Nigeria spends more than $4 billion every year on importing steel, while its domestic production remains low and stagnant. This is the grim reality of the Nigerian steel industry, which has been struggling for decades to achieve its potential as a driver of industrialization and economic growth.

Shuaibu Audu, the minister of steel development, addressed this issue in a press conference in Abuja on Friday, where he outlined the government’s plans to revive the dormant steel sector and make it more competitive and self-reliant.

Ajaokuta Steel: A Symbol of Missed Opportunities

Audu said that the Ajaokuta Steel Complex, which was conceived in the 1970s as a flagship project to transform Nigeria into a major steel producer, has been plagued by mismanagement, corruption, and technical problems, and has never operated at full capacity.

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“The Ajaokuta Steel which was set up to be an avenue for industrialization in Nigeria, more than four decades ago has hit a brick wall,” he said.

He added that the Nigerian steel industry has not done well in terms of local production and consumption, which are both in excess of 5 million metric tonnes per year. The local production accounts for a very small fraction of the total demand, while the rest is met by imports.

“As you know, the Ministry of steel development was created by President Bola Ahmed Tinubu in August 2023, basically, with the mandate to revive the steel industry which has really been struggling since independence more than 60 years ago,” he said.

A Roadmap for Steel Revival

To achieve this mandate, Audu said that the ministry was working on a 10-year roadmap for the revival of the steel industry, as well as a 3-year roadmap for the revival of the Ajaokuta Steel.

He also stated that the government was planning to concession the Ajaokuta Steel Complex to private investors who have the expertise and resources to operate it efficiently and profitably.

“We would be to concession the Ajaokuta steel complex to people that have the core competence to be able to get the job done. As we know Ajaokuta has about 44 different production units plants within the 24,000 hectares in terms of the land,” he said.

He said that the government’s goal was to reverse the trend of 90 percent import and 10 percent local production of steel, and to achieve 90 percent local production and 10 percent import instead.

“That is where we would like to get to and part of what we need to do to achieve that would be to pass the metallurgical industry bill for the steel and metals industry, as well as the National steel Council Act,” he said.

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He explained that these bills would provide the legal and institutional framework for the development and regulation of the steel industry, and would also attract more investments and create more jobs.

“So these are some of the things that we need to do. As you know, the steel industry is a prerequisite and a very important component of industrializing the country,” he said.

New Projects and Partnerships

Audu also revealed that the ministry was working on reviving the light steel mill, which would produce iron rods for the construction of infrastructure across the country. He said that the ministry of works would be the off-taker of the products from the mill.

He further disclosed that the ministry was in talks with foreign investors to start a new steel plant in Nigeria, in collaboration with the ministry of defence.

“So the minister of defence and myself were in China in January to discuss with the management of WUHAN steel group, to set up a steel plant in Nigeria,” he said.

He said that the new plant would be a joint venture between the Nigerian and Chinese governments, and would have a capacity of 1.5 million metric tonnes per year.

He said that the new plant would bring in more than $10 billion into the economy and create more than 500,000 direct and indirect jobs for Nigerians.

He also said that he would visit the indigenous steel companies in the near future, to assure them of the government’s support and to encourage them to improve their operations and quality.

“I don’t want the indigenous steel companies to feel left out. The federal government is here to support them, and to ensure that your business continues to grow,” he said.

Audu expressed optimism that the government’s efforts would yield positive results and would make Nigeria a leading steel producer in Africa and the world.

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