•The sector is too important to be neglected
Steel development is recognised worldwide as the bedrock of economic development; and understandably so. This is why many countries that are blessed with the raw material for steel make sure that they sustain the industry even as those which are not so blessed import to keep their steel industries going. Of course, countries place so much emphasis on steel because virtually everything we use today, from aero planes to ships and cars, even wristwatches, etc. all have steel components.
Nigeria seemed to have realised the importance of the sector at a time in its history and established four steel rolling mills – Osogbo Steel Rolling Mill in Osogbo, Osun State; Jos Steel Rolling Mill in Jos, Plateau State, Katsina Steel Rolling Mill in Katsina, Katsina State, Delta Steel Company in, Ovwian-Aladja, Delta State, as well as the Ajaokuta Steel Complex, Ajaokuta, Kogi State. We also have the National Iron Ore Mining Company (NIOMCO) Limited, Itakpe, Kogi State. Sadly, as with most other things Nigerian, the steel sector was neglected after the country had invested heavily in it.
The lack of commitment, corruption and politicisation of the sector, were responsible for its ruin and has led to the present situation where the country is importing steel products on the scale that it is today. Minister of Industry, Trade and Investment, Dr Olusegun Aganga, revealed at a one-day stakeholders’ forum with the theme, ‘Transformation of Minerals, Iron and Steel Sub-Sector for Industrial Revolution in Nigeria” that the country spends a whopping $3billion annually on steel importation. The bill is this high because annual steel production in Nigeria is estimated at about 3.5million tonnes while the country imports about 17 million tonnes of steel and allied products annually.
This, surely, is one of the perplexing absurdities of governance in Nigeria. Other things being equal, the country should have no business importing steel, given the investments it had made in the sector. Ajaokuta alone had gulped about $7 billion while only about $1billion was needed to complete it before it was abandoned. However, government eventually privatised the four steel rolling mills after discovering that it could not run them efficiently. Interestingly, as of today, only about one or two of them are producing.
This situation cannot continue. The steel sector is too important to us as to any other country, to be left in a comatose state. It has great potential in terms of employment generation. Ajaokuta alone is said to be capable of generating about 140,000 direct jobs with between one to two million ancillary jobs. Moreover, the government is talking about reviving the automotive industry; this cannot work well without a vibrant steel sector.
So, rather than carpet the private steel firms in the country for wholesale importation of steel products as Aganga did at the forum, he should ensure that the problems being faced by the steel firms are addressed by the government. These include infrastructure challenges, electricity, security, inconsistent government policies and unbridled importation of cheap steel products competing with the ones produced locally at outrageous costs. When the problems are addressed, the steel manufacturers would stop coming to Abuja to look for waivers which Minister Aganga frowned at. The point is that we have made many mistakes in the past on the steel industry and it is only by the government coming out with the right policies that those can be redressed.
Many other oil-producing countries like Nigeria with excellent reserves have viable steel industries. But Nigeria has refused to diversify its economy, relying solely on oil revenue with its attendant volatilities. The government must retrace its steps because the country is losing a lot by not having a viable steel industry.
