Africa’s richest man, Alhaji Aliko Dangote, has announced plans to venture into steel production, aiming to ensure that every steel product used in West Africa originates from Nigeria. This revelation came during an interview at the ongoing Afreximbank Afro-Caribbean Trade & Investment Forum.
A New Frontier: Steel Manufacturing
When asked about his next steps following the completion of his refinery project, Dangote revealed that his focus would shift to steel manufacturing. “I told somebody we are not going to take any break. What we are trying to do is to make sure at least in West Africa, we want to make sure that every single steel that we use will come from Nigeria,” he stated.
Call to Action for African Leaders
Dangote also urged African leaders to prioritize agriculture and solid mineral development. He emphasized the detrimental impact of food imports on the continent, highlighting how it exacerbates unemployment and poverty. “What we need to do that is missing is actually to concentrate and pay more attention to agriculture and solid minerals. I don’t like people coming to take our solid minerals to process and bring the finished product. We should try and industrialise our continent and take it to the next level,” he said.
Challenges and Prospects for Nigeria’s Steel Industry
Nigeria’s steel industry has faced numerous challenges over the years, with several failed projects like the Ajaokuta steel plant, Delta Steel Company, and the Osogbo and Jos rolling mills. Despite significant investments by various administrations, these projects have yet to succeed. The federal government, under President Bola Tinubu, has renewed its commitment to revitalizing the steel sector, including a substantial budget allocation of around N4.45 billion for the Ajaokuta steel complex in the 2024 appropriation act.
The Financial Hurdle
Reviving the Ajaokuta steel plant is estimated to require between $2 billion to $5 billion, according to the Minister of Steel Development, Shuaibu Audu. The government hopes to attract around N35 billion from private investors to bring the plant to life.
Potential and Current Consumption
Nigeria’s steel consumption stands at approximately 10 million metric tonnes annually, with 70% being imported, according to the National Steel Raw Materials Exploration Agency (NSRMEA). Despite having around 74 steel plants and fabricators, the country spends about $4 billion on steel imports each year. Nigeria boasts significant iron-ore deposits, a crucial raw material for steel production, primarily located in Kogi state.
Looking Ahead
Dangote’s ambitious plans could mark a significant turning point for Nigeria’s steel industry, potentially reducing dependency on imports and fostering economic growth. His vision aligns with the broader goal of industrializing Africa and ensuring sustainable development through local resource utilization.
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