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Why Nigeria should develop its steel sector, by RMRDC boss

By Femi Ibirogba
23 June 2022   |   2:42 am
Director-General of the Raw Material Research and Development Council (RMRDC), Prof. Hussaini Ibrahim, has called on the Federal Government to revamp the iron and steel sector to save the economy


Country imports N837.8b steel, and metals in six months

Director-General of the Raw Material Research and Development Council (RMRDC), Prof. Hussaini Ibrahim, has called on the Federal Government to revamp the iron and steel sector to save the economy, boost industrial, building and fabrication sectors and create massive jobs in the value chain.

According to the National Bureau of Statistics (NBS), Nigeria imported iron, steel and metals valued at N837.76 billion in the third and fourth quarters of 2021. The total value of basic metals imported within the two quarters was N748.53 billion.

Whereas the country is blessed with all the raw materials needed for the production of iron and steel, it relies on importation for finished products.

Ibrahim lamented that though planning for the Nigerian steel sector started in 1958, over six decades after, the country is yet to develop a stable iron and steel sector despite over $7 billion already expended on steel development.

He said the exploration started at the Itakpe iron ore deposits in 1963 and between 1961 and 1965, several foreign companies, which came to assess the Nigerian steel sector, reported that steel production was not feasible owing to lack of domestic market, high cost of technology, poor infrastructural development, lack of manpower, the poor grade of iron ore deposits in Nigeria and international politics.

He explained that in 1967, Russian experts came to Nigeria to conduct feasibility studies for the establishment of iron and steel plants in Nigeria. From 1960 to 1970, the Federal Government directly coordinated the iron and steel sector in Nigeria and there are instances of policy inconsistency, he pointed out

During the Second National Development Plan (1970–1974), the government established the National Steel Development Authority (NSDA), which was saddled with the responsibilities of iron, and steel development.

Under the coordination of the Russian experts, NSDA conducted various geological surveys that led to the discovery of commercial quantities of iron ore in the country. During the implementation of the third National Development plan (1975 – 1980), the government signed various agreements for the construction of two integrated steel plants and three rolling mills.

In 1979, the government promulgated Decree No. 60 of 18th September 1979, which unbundled NSDA and established the Ajaokuta Steel Company, Delta Steel Company, Jos Steel Rolling Company, Katsina Steel Rolling Company, Oshogbo Steel Rolling Company, National Iron Ore Mining Company, National Steel Raw Materials Exploration Agency, National Metallurgical Development Centre and the Metallurgical Training Institute.

While the three rolling mills and DSC were completed on schedule, the ASC was not completed after over 40 years of intermittent construction work.

Up till today, the ASC has failed to take off while DSC and the rolling mills in Osogbo, Jos and Kastina produce at very low capacity utilisation.

The professor said as a result of the high cost of billet importation, many steel companies are unable to function, and Nigeria imported $1.18 billion worth of steel materials in 2020 according to the United Nations COMTRADE database on international trade.

He said: “If the sector is functioning adequately, it will also contribute not less than 30 per cent of the inputs required in the automotive industry in Nigeria. Likewise, the plant has the capacity to meet most of the national requirements for chemicals.

“The success of local fabrication and production of process equipment and universal components also largely depends on the optimal operation of the companies in the sector.

“Currently, several process equipment designed and fabricated locally cannot be replicated given the high cost of imported steel products. This has seriously limited local production of equipment for a cottage, small and medium enterprises and the dearth of universal components and spare parts required in the manufacturing sector, leading in most instances to downtime of equipment in several manufacturing industries.”

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