Email YouTube Facebook Instagram Twitter WhatsApp

Iron And Steel As The Economy’s Backbone


 Kayode Fayemi

Kayode Fayemi

THERE is no doubt that Nigeria is now at a critical crossroad concerning her economy. Noisy discussions have continued to remind us about the enormous wealth in the country, which until now has remained untapped or tapped in an unserious manner. Nigeria is blessed with solid mineral resources, which have not been explored in ways that had been anticipated. Iron ore remains one of such sources of national wealth, but past administrations did not take full advantage of its rich potentials as a building block for industrialisation.

Structures built for the purpose of extracting and processing Iron Ore are today abandoned with disused, dilapidated buildings and rusty equipment to show for it. I speak specifically about the Nigerian Iron Ore Mining Company (NIOMCO) in Itakpe, and the abandoned Itakpe–Ajaokuta Rail link. These two edifices located in Kogi State now lie in shambles; the sobriquet “Land of Mining”, virtually meaningless. The vision of the rail link was for the steel plant in Ajaokuta to be connected to its supplier of Iron Ore, in Itakpe. A drive past the rail link station reveals that right now that laudable vision is off-track, but I hope not permanently.

My concern for the untapped iron ore resources in Itakpe, Kogi State are written from the perspective that my State, Kogi, like many other states, suffers from high rates of youth unemployment. Can we imagine what impact the revival of economic and commercial activities would have, if NIOMCO and Ajaokuta Steel Complex also in Kogi State, roll back into life to reignite the dream of Nigeria becoming a force in the global iron and steel sector? The Steel sector is the heartbeat of any national development plan for industrialisation.

This IS why recent announcements by the Minister of Mines and Steel Development, Dr. Kayode Fayemi, about a new solid mineral policy and his statement that “Nigeria is aiming to hand over the $4.5bn Ajaokuta Steel complex to private operators this year as part of a plan to kick-start its industrial and mining industries” are causing ripples of excitement.

What the sector really needs now is for the promises of government to be backed by focused and coherent action. For too long, the sector has been subjected to inaction which has resulted in half- baked privatisation programmes, non-functional steel firms in Aladja, (Delta State), Ajaokuta Kogi State), Jos (Plateau State), Katsina (Katsina State) and Osogbo (Osun State), a weak Iron Ore mining complex and equipment worth millions of Naira left to rot.

Nigeria stands to gain a great deal when her iron and steel sector rumbles back to life. Many advanced industrial nations built their power on iron and steel. India is a member of the BRICS, the economic block comprising of five major emerging economies of Brazil, Russia, India, China and South Africa. Economic intelligence reports in 2012 declared that the BRIC countries (excluding South Africa) play a dominant role in the global iron and steel industry in terms of reserves, production and consumption. Industry watchers have projected that Nigeria has large reserves of unexplored iron ore and this places her favourably in a position to become a prominent producer of steel. Of course, none of these can be realised if we do not activate certain practical measures and harness our collective political will to develop the nation’s steel sector once and for all.

Painful decisions may have to be made. Nigeria should reduce her steel imports, raise import duties on iron rods etc and embark on becoming a major exporter of various steel products in addition to satisfying local demand.

Nigeria is not short of the relevant natural resources and to all intents and purposes, we expect to sustain the sense of exhilaration from the news that the Minister has mapped out a new solid mineral policy, which includes the steel sector.

Certainly, the revival of the sector will have multiplier effects on the fledgling automobile industry, push expansion in our rail sector. It will facilitate the exploration of Iron Ore and other solid minerals such as Limestone. In terms of direct and indirect employment, steel is reputed to be the biggest sector for employment. Nigeria’s army of unemployed youths can have hope for jobs and training in new skills.

As a revenue earner, examples abound in other parts of the world in places such as South Korea, reputed to be a “big automative exporter as well as a big steel consumer”. The role steel production plays in the country’s economic growth is well-documented. According to Korea Iron and Steel Association: “ The steel industry is the nation’s key industry with high impact on the inter-industries and has played a crucial role in the economic growth of Korea by steadily providing materials to demand industry such as automobile, shipbuilding and construction”.

There is a global demand for Iron Ore and steel and Nigeria must seize the moment of low oil prices and tap into the steel market for her economic renaissance and diversification.
Ajanah is a member of the House of Representatives representing Adavi/ Okehi Federal Constituency in Kogi State.

Receive News Alerts on Whatsapp: +2348136370421

No comments yet