During an interactive session with the House of Representatives Committee on Steel Development in Abuja, Mr. Shuaib Abubakar, the Minister of Steel Development, emphasised the urgency for the revival of the Ajaokuta Steel Company. He highlighted that Nigeria’s yearly expenditure on steel imports amounts to approximately $8 billion, underscoring the need for domestic production to reduce this significant financial burden. He mentioned that the reactivation of the company will require funding, and they have prepared a 10-year plan for the reactivation. The plan will be submitted to the President for approval.
Abubakar expressed his personal interest in the success of Ajaokuta, being a native of Kogi State. He revealed that the Federal Government had spent $500 million to end the concessional agreement on Ajaokuta, highlighting the Ministry’s dedicated efforts to resolve the longstanding issue surrounding the plant, which has been ongoing for 45 years. Their primary purpose for travelling to China is to explore Investment opportunities in the industry, specifically by establishing a new Manufacturing plant. Additionally, they are in search of funding to support their ventures.
About $2 billion is needed to rejuvenate the struggling plant.
New technologies have brought about new challenges, which are still in the process of being addressed through Innovation and ongoing discussions. One major hurdle for the Ministry of Mines and Steel Development is funding, as without adequate financial support, the potential for industrial growth through the industry could not be realised. Finding a solution for the Ajaokuta Company remains a priority at this stage. The minister stated that the estimated $2 billion needed to rejuvenate the struggling steel company was only a rough estimate and could potentially be lower than initially projected.
He stated that the estimate provided is not precise down to the last decimal point, but rather a rough calculation to guide them in the right direction. He added that the President has tasked him with resolving the Ajaokuta issue, so the amount is subject to change pending the results of the technical audit. Nigeria recognises the necessity of funding and support from both chambers in order to make this vision a reality. All of the assistance and backing are crucial to achieving this goal.
The sector can drive growth and economic development.
In addition, the potential revival of the Ajaokuta Steel Company holds significant promise for Nigeria’s Economy and industrial sector. With the country currently spending a substantial amount on steel imports annually, the revitalisation of the plant would not only reduce this financial burden but also create opportunities for local job creation and economic development. By investing in domestic steel production, Nigeria can strengthen its self-sufficiency in this critical industry and bolster its overall economic stability.
Investing in the industry can spike innovation and technological advancement in Nigeria. As the backbone of many industries, the sector plays a vital role in Infrastructure development, manufacturing, and construction. A robust steel sector can drive growth in these key sectors, laying the foundation for sustainable economic development. By harnessing the potential of the plant and modernising its operations, Nigeria can position itself as a regional powerhouse in steel production, attracting further investments and enhancing its economic resilience.
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Moreover, the economic value of reviving the plant extends beyond just reducing import costs. A strong industry can also serve as a catalyst for the development of downstream industries, such as automotive, machinery, and construction. The multiplier effect of a revitalised Ajaokuta can create a domino effect, stimulating growth in related sectors and fostering a more diversified and resilient economy. With the right investments, policies, and partnerships, Nigeria can leverage its abundant resources and strategic location to become a hub for steel production in Africa.