Nigeria spends $4bn annually on steel imports, says minister

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.