[Ferro-Alloys.com] Shuaibu Audu, minister of steel development, says Nigeria imports about $4 billion worth of steel annually, stressing the need for import substitution to reduce pressure on foreign exchange (FX).

Audu spoke on Thursday during a visit to the National Steel Raw Materials Exploration Agency (NSRMEA) in Kaduna.

Import substitution is an economic strategy where a country focuses on local production of goods instead of relying on importation.

“For Nigeria to produce steel in the quantity we desire, it is very important that the exploration arm of the industry is operating at full capacity,” the minister said.

Audu said the exploration agency is one of the cornerstones of the federal government’s plan to grow the economy to $1 trillion by 2030.

He commended the NSRMEA for its performance, noting that previous assessments ranked the agency as one of the best-performing agencies under his ministry.

FG TO PARTNER DEFENCE MINISTRY TO PRODUCE MILITARY HARDWARE

Speaking further, the minister disclosed plans to partner with the ministry of defence and the Defence Industries Corporation of Nigeria (DICON) to produce military hardware.

According to Audu, one of President Bola Tinubu’s key objectives is the rehabilitation of the Ajaokuta Steel Company.

“We are working towards integrating military hardware production into the complex as part of a broader plan to establish a military-industrial complex in Nigeria,” he said.

Audu said a memorandum of understanding (MoU) had already been drafted and shared with DICON, pending presidential approval.

He said as part of efforts to reposition the steel sector, plans are afoot for a summit to gather stakeholders in the steel sector to develop a comprehensive blueprint for the growth of the industry.

Audu also highlighted the progress of the metallurgical industry bill, which he said, has passed a second reading at the house of representatives.

“The bill, once passed and signed into law, will provide a regulatory framework for both private and corporate steel players, ensuring proper governance and development of the sector,” he said.

Audu, who said the federal government is attracting foreign direct investments (FDI) to the steel industry, expressed optimism that ongoing reforms would revive the industry.

“Our target is to produce 10 million metric tonnes of steel annually,” he said.

“Once our plans are fully implemented in the next five years, we will achieve all our objectives and significantly reduce the country’s reliance on imported steel,” he said.

The minister said during Tinubu’s visit to New Delhi in September 2023,  a commitment was made for the production of five million metric tonnes of steel in Nigeria.

He added that a Chinese company is investing $300 million in a steel plant in Ogun state. This, he said, would go a long way in expanding Nigeria’s steel production capacity.

Chinese Firm to Invest $300 Million on Steel Plant in Nigeria  October 17, 2024

Inner Galaxy Steel Company Limited, a Chinese steel manufacturer, has announced plans to invest $300 million in establishing a new steel plant in Ogun State, Nigeria. The facility will focus on producing specialized steel products such as plates, angles, beams, and stainless steel. This investment marks a significant step towards boosting Nigeria’s industrialization and reducing the country’s reliance on imported steel.

The development was disclosed by Nigeria’s Minister of Steel Development, Prince Shuaibu Audu, through a statement issued by Salamatu Jibaniya, Head of Information and Public Relations in the ministry. Audu emphasized that the investment aligns with President Bola Tinubu’s economic diversification policy, known as the Renewed Hope Agenda. He noted that Inner Galaxy’s commitment reflects growing confidence in Tinubu’s leadership and the government’s efforts to industrialize key sectors of the economy, including steel.

The minister assured the company that the Federal Government is dedicated to creating an enabling environment to support sustainable industrial operations. This includes offering fiscal incentives and engaging relevant authorities to explore concessionary benefits that could facilitate the project’s smooth implementation. According to Audu, the initiative is part of broader efforts to attract and secure foreign direct investment (FDI) in Nigeria, which is crucial for expanding the country’s manufacturing base and improving its global competitiveness.

Mr. Li Shuang, President of Inner Galaxy Steel Company Limited, also reiterated the company’s long-term commitment to Nigeria during a recent meeting with the minister. Shuang revealed that the proposed steel plant is expected to significantly enhance Nigeria’s steel production capacity, reducing the country’s dependence on imported steel and conserving foreign exchange. By focusing on the production of specialized steel products, the plant will meet local demand while supporting industries such as construction, automotive, and infrastructure development.

Shuang also noted the broader economic impact of the investment, stating that the project is expected to create 10,000 direct and indirect jobs. This will not only provide employment opportunities but also spur economic growth through a range of multiplier effects, including supply chain development and increased demand for local goods and services. The project is seen as a key driver in boosting Nigeria’s industrial capacity and strengthening its position as a hub for steel production in West Africa.

Inner Galaxy has a long history of operation in Nigeria, with over 20 years of experience in the country’s steel industry. Shuang highlighted that the company’s existing investments in Nigeria exceed $1 billion, with its current operations already playing a significant role in the domestic production of steel. The new plant in Ogun State will build on these foundations, contributing to Nigeria’s vision of becoming self-sufficient in steel production.

The Federal Government’s support for this project underscores its broader commitment to fostering an investment-friendly climate. By providing necessary incentives and streamlining regulatory frameworks, the government aims to encourage further FDI inflows into sectors critical for Nigeria’s economic development. Steel, in particular, is viewed as a strategic industry, as it forms the backbone of infrastructure and industrial activities. Enhancing local production capacity is therefore essential for reducing imports, conserving foreign exchange, and achieving the country’s long-term industrialization goals.

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• [Editor:tianyawei]