Nigeria’s Steel Import Expenditure Highlights Urgent Need for Domestic Production

Nigeria spends about $4 billion annually on steel imports, according to Minister of Steel Development, Prince Shuaibu Abubakar Audu. He advocates for import substitution and highlights the essential role of the National Steel Raw Materials Exploration Agency in achieving economic goals. Collaborations with the Ministry of Defence for military production and developments in livestock consumption in the Southwest region are also discussed, emphasizing local production capabilities. Audu outlines plans for rehabilitation of the Ajaokuta Steel Company and upcoming initiatives to boost steel production capacity and attract foreign investments.

Nigeria currently incurs an annual expenditure of approximately $4 billion on steel imports, as disclosed by the Minister of Steel Development, Prince Shuaibu Abubakar Audu. He emphasized the necessity for import substitution to alleviate the demand on foreign exchange, noting the pivotal role of the National Steel Raw Materials Exploration Agency (NSRMEA) in advancing the nation’s economic aspirations towards achieving a $1 trillion economy by the year 2030.

During his visit to NSRMEA in Kaduna, Minister Audu recognized the agency as a highly efficient entity within the Federal Government’s plans and voiced the need for its operations to be optimized to enhance steel production capacity in Nigeria. He also mentioned ongoing efforts to collaborate with the Ministry of Defence and the Defence Industries Corporation of Nigeria (DICON) to enable the manufacturing of military hardware domestically.

Additionally, the Development Agenda for Western Nigeria (DAWN) Commission revealed that the Southwest region spends more than N800 billion monthly on red meat. The Director-General, Dr. Seye Oyeleye, highlighted the staggering number of cows slaughtered daily, indicating a significant economic activity yet a lack of local participation in the livestock industry. He emphasized the region’s potential to not only consume but also produce livestock, suggesting that enhancement in local participation could mitigate reliance on external sources.

Dr. Oyeleye specified the importance of advancing the livestock sector through a proposed ten-year development plan. He described the Community-Led Development Toolkit (COLDET) project aimed at supporting sustainable community development, collaborating with the Growth & Development Foundation. This initiative will enable local communities to prioritize their own needs through systematic assessment and self-sufficiency methodologies.

In the context of steel production, the Minister clarified plans for the Ajaokuta Steel Company’s rehabilitation and the establishment of a military-industrial complex in Nigeria. A memorandum of understanding with DICON is currently pending approval. Furthermore, plans for Nigeria’s first steel summit have been announced, aimed at developing a comprehensive growth strategy for the industry, alongside the progress of the Metallurgical Industry Bill in the House of Representatives, which aims to enhance regulation in the sector.

As the government seeks to attract foreign direct investments into the steel industry, Minister Audu cited a commitment made during President Tinubu’s recent visit to India to produce five million metric tons of steel in Nigeria. He also mentioned a significant investment of $300 million by a Chinese firm, Galaxy, towards establishing a steel plant in Ogun State, thus bolstering the country’s production capacity.

Acknowledging the past challenges faced by the sector, which has been non-functional for 45 years, Minister Audu expressed optimism for recovery and growth within five years, targeting an annual production of 10 million metric tons. During his visit to the DICON factory, he lauded their efforts toward military self-sufficiency, while DICON’s Director-General, Maj Gen Aniedi Edet, noted the substantial financial impact of military hardware imports and voiced confidence in the future collaboration with the Ministry of Steel Development.

Concluding his visit with a courtesy call on former President Muhammadu Buhari and discussions with Kaduna’s Deputy Governor, Dr. Hadiza Balarabe, Minister Audu reiterated his commitment to the missions and objectives of the Ministry of Steel Development.

In conclusion, Nigeria’s significant investment in steel imports indicates a pressing need for domestic production capabilities to foster economic growth. The Department’s initiatives, including collaborations with military and livestock sectors, as well as regulatory developments, indicate a strategic approach towards enhancing self-sufficiency and industry sustainability. The progress towards initiating a comprehensive steel production framework, alongside community-led development strategies, highlights a concerted effort to reshape Nigeria’s economic landscape in the near future.

Original Source: economicconfidential.com