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FG set to cut $4bn annual steel imports

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By Abiodun Okunloye

This 10 year plan is to completely elevate the steel industry.

Reducing the $4 billion annual expenditure on Steel imports remains a core objective for the Federal Government, as highlighted by the Minister of Steel Development, Prince Shuaibu Audu. Addressing the media at the ministry’s headquarters in Abuja, He emphasised the determination of the government to achieve this goal. Taking stock of the ministry’s accomplishments in revitalising the steel sector within the ministry five months under President Bola Ahmed Tinubu’s administration, he reaffirmed their commitment to prioritise domestic steel production.

He recognised the immense challenge of reviving Ajaokuta Steel Company Limited yet affirmed the feasibility of accomplishing this goal through the implementation of appropriate measures and ongoing endeavours. At the same time, he proclaimed plans to elevate the steel industry through a comprehensive 10-year plan while concurrently implementing a separate three-year plan aimed at revitalising the Ajaokuta Steel Company Limited. An imminent disclosure of the specific details contained within these roadmaps is expected, as they are poised to be made accessible to the public.

A staggering 90% of the steel demand is reliant on imports.

President Bola Ahmed Tinubu established the Ministry of Steel Development in August 2023. Its primary purpose is to breathe new life into the struggling steel industry, which has faced significant challenges since Nigeria gained independence over 60 years ago. Unfortunately, the local production of steel in Nigeria has been far from impressive, and the consumption of steel exceeds a staggering 5 million metric tonnes. Nigeria witnesses an insubstantial proportion of steel produced locally compared to the overall consumption volume.

Currently, about 90% of the steel demand is reliant on imports, resulting in a staggering expenditure of $4 billion attributed to steel importation. However, the desired outcome is completely reversing the percentages, where 90% of the steel supply is sourced locally, and only 10% is imported. Their desired destination lies in that direction, and one crucial step toward attaining it involves the successful enactment of two pivotal legislations, the Metallurgical Industry Bill specifically crafted for the steel and metals sector, and the National Steel Council Act.

Concession plans and industry expansion of Ajaokuta steel company.

The Minister has disclosed that there are plans to grant a concession to the Ajaokuta Steel Company. However, the identity of the company that will receive this concession is still unknown, although it will be revealed in the forthcoming months. The Ajaokuta Steel Complex will be given to individuals who possess the necessary expertise and skills to accomplish the designated tasks successfully. Ajaokuta comprises an extensive expanse of land measuring 24,000 hectares, housing a diverse range of 44 production units. These units facilitate the operation of various production plants.

Meanwhile, he confirmed that measures are being taken to initiate operations at the Light Steel Mill. This would primarily involve the Manufacturing of military equipment and iron rods for Infrastructure projects. The Ministries of Defence and Works have expressed interest in procuring these goods and are currently engaged in discussions to move forward with the production. He stated that several steel companies are taking steps towards building their factories in Nigeria. According to his perspective, Nigeria needs approximately 10 additional steel companies aside from Ajaokuta Steel Company. In January, he and the Minister of Defence visited China to engage in conversations with WUHAN Steel Group’s leadership, intending to establish a steel plant within Nigeria.

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Moreover, the anticipation is that these measures will generate over $10 billion for the Economy and generate more than 500,000 jobs, both direct and indirect, for the population. When it comes to the development of the steel sector, the Minister assured the inclusion of indigenous steel companies and pledged not to leave anyone behind. Moreover, he emphasised the upcoming plans to visit indigenous steel companies within a short period, assuring that none would be overlooked. The commitment of the Federal Government lies in assisting and fostering the expansion of their businesses.


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