Government to save $4.5b yearly through local steel production
Prioritises sectors to stimulate for local content, export
By supporting growth of local steel producing facilities through capacity expansion and creation of a conducive business environment, Nigeria will be saving about $4.5 billion yearly in cost expended on 25 million tonnes of processed steel, aluminium products and associated derivatives, the Federal Government has said.
Besides, the Federal Government also noted that the present administration is prioritising key sectors, such as manufacturing, agro-allied processing and solid minerals to boost local production and exploit the nation’s export potential.
The Vice President, Professor Yemi Osinbajo, while speaking during the foundation laying ceremony of KAM integrated steel project, said Nigeria’s steel import bill remains high, noting that country is the 12th largest iron ore resource country and the second largest in Africa, with two billion metric tonnes of iron ore reserves.
Despite the huge reserves, Osinbajo noted that 70 per cent of these deposits are yet to be exploited due to the commercial viability of the products in the industry and appropriate financing.
“Today, the 30 existing steel rolling mills in the country have a combined installed capacity of 6.5 million metric tonnes per annum where out of the companies, about 18 are operational and producing 2.8 million metric tonnes per annum from melting of scraps.
“According to the world’s steel association, global iron and steel estimated demand is $9.6 trillion yearly. We must therefore be extremely ambitious in our industrialization efforts in this area. Indeed, the need for increased level of investments in Nigeria has never been more crucial than this time. Steel plays a pivotal role in the industrialization and infrastructure plans of the federal government,” he said.
He stated that the government is aware of the bottlenecks hindering the nation’s industrial sector, pointing out that the present administration is looking currently for options to resolve these challenges by synergising government capacity and private sector competences for certifying existing deposits.
The Federal Government is repositioning the economy for inclusive growth and sustainable development by getting the fundamentals right through the key fiscal and monetary trade and investment policies required. We are committed to diversifying the economy away from overdependence on oil and creating enabling environment to facilitate private sector led growth and development”, he added.
He noted that the administration is investing in critical infrastructure, embracing and encouraging the private sector and also advocating greater social economic inclusion particularly through job creation among other initiatives.
“We will also support industries such KAM industries limited in promoting local materials content and patronage of Made-in-Nigeria goods. We are targeting an enabling environment in which it is progressively easier to do business where policies are predictable and consistent with macroeconomic stability and where the government acts as a partner to business and investments and not a competitor,” he said.
The Acting Managing Director of Bank of Industry (BoI), Waheed Olagunju, said one of the parameters for measuring the strengths of nations is the extent to which they are self reliant, saying that for decades, Nigeria has been externally and import dependent which had led to the present crisis the country is experiencing presently.
He added that for Nigeria to domesticate the production capacity of its economy, the iron and steel sector has a very crucial to play because the plants and machinery used in the sector are imported.
“If we can produce these plants and machinery in Nigeria to process our raw materials that we have in abundance, we will now begin to talk about true independence and economic integration.
“We are willing to commit more resources to your projects. The federal government has assured us that it will continue to strengthen the BoI to deliver on our mandate. We are also working with the Minister of Solid Minerals and we are also part of his think tank in terms of financing the mineral sector in Nigeria,” he added.
He noted that BoI has previously provided part funding of N1.71billion for the purchase of equipment for the production of cold roll steel as well as provided financing totalling N6 billion to KAM industries Limited under the Central Bank of Nigeria ( CBN’s) intervention fund.
He said the project, when completed,will boost commercial activities as well as socio-economic development of Kwara State and would create an estimated 750 jobs and empower Nigerians.