Get Guardian on Google…Urges FG to revive Ajaokuta steel to conserve foreign exchange, others
The Nigerian Society of Chemical Engineers (NSChE) has lamented that Nigeria spends and loses $4 billion on imported steel products annually.
The society has therefore,urged the Federal Government to revive the Ajaokuta steel to reduce steel imports, conserve foreign exchange, create jobs, stimulate power,mining and streghten local manufacturing among others.
NSChE gave the charge at its 56th annual conference, general meeting and exhibition ongoing in Port HarCourt, Rivers State.
The National President of NSChE, Bayo Olarewaju-Alo, said, Nigeria’s annual steel demand was estimated at about 10 million tonnes, against local production of approximately 1.2 million tonnes, largely from scrap-based operations, leaving a significant supply gap and contributing to an estimated $4 billion annual steel import bill.
According to him, reviving Ajaokuta would strengthen domestic manufacturing, infrastructure development and engineering capacity, and grow the nation’s economy.
The society maintained that a majority Nigerian ownership structure, supported by strategic technical partners and a minority Federal Government stake, would provide a better framework for aligning investment with operational performance.
It, however, cautioned against ownership arrangements that would commit substantial portions of future steel production to investors as repayment through production-sharing mechanisms, insisting that the facility’s output must primarily serve Nigeria’s industrial needs.
To ensure a successful revival, NSChE outlined five critical conditions, including transparent privatisation through established government institutions and competitive international bidding, resolution of outstanding liabilities and contractual disputes, and binding agreements for the supply of essential production inputs.
It identified reliable iron ore supplies from Itakpe and West African sources, long-term natural gas allocation, stable electricity, rail access through the Itakpe-Ajaokuta-Warri corridor, as well as adequate port and logistics infrastructure as essential to restoring production.
The engineers also recommended targeted and time-bound government support, including temporary tariff protection, strategic procurement and performance-based incentives, warning against indefinite subsidies.
On financing, the society advocated a blended funding arrangement involving private equity, development finance institutions, export credit agencies, regional development banks and Nigerian capital market instruments, including infrastructure bonds.
It further proposed a phase rehabilitation strategy, beginning with the restoration and operation of existing rolling mills using imported billets within the first three years to generate early revenue, rebuild technical capacity and restore market confidence.
The also society recommended that alternative iron-making technologies be assessed against clearly defined technical and commercial criteria, with a production target of approximately 1.3 million tonnes of crude steel annually.
It said Nigeria’s natural gas resources could make gas-based Direct Reduced Iron and Electric Arc Furnace (DRI-EAF) technology attractive, potentially reducing exposure to foreign exchange risks associated with imported coking coal.
However, it stressed that the final technology choice should be determined by rigorous technical and commercial assessments rather than a predetermined preference.
Beyond Ajaokuta, the NSChE president called for increased investment in domestic gas utilisation and value addition, noting that natural gas could serve as feedstock for ammonia, fertilisers, methanol, hydrogen and petrochemical industries.
He said developing gas-based industries would support agriculture, create employment, reduce dependence on imports and strengthen Nigeria’s manufacturing sector.
Olarewaju-Alo also advocated investment in gas gathering, processing, transportation and distribution infrastructure, alongside the development of integrated industrial parks and manufacturing clusters.
On emerging technologies, he identified artificial intelligence as a major driver of engineering and industrial transformation, with applications in predictive maintenance, process control, production optimisation, quality assurance, energy management and environmental monitoring.
He, however, identified inadequate infrastructure, unreliable energy supply, high production costs, limited long-term financing, policy inconsistencies and insufficient downstream investment as major constraints to industrial growth.
The 56th annual conference, themed, “Advancing Nigeria’s Industrial Revolution Through Gas Valorisation and AI-Driven Engineering Imperatives,” brought together stakeholders from government, industry, academia and the engineering profession to discuss pathways for strengthening Nigeria’s industrial competitiveness.
The society reaffirmed its readiness to provide technical expertise and professional guidance to government, regulators and private sector investors in advancing the country’s industrial development.
