Steel makers invest N103bn in 6 months
Nigeria’s fabricators, iron and steel makers outperformed manufacturers in other sectors in terms of volume, pumping N103.41 billion into the economy within the first six months of 2015.
But this represents a decline from N110.9 billion recorded in the first half of 2014 and N123.98 billion reported in the last half of the same year.
Players in the sector say they are ready to make more commitments to the economy if the present administration shows and implements a clear roadmap for steel development.
According to data compiled by the Manufacturers Association of Nigeria (MAN), the group is trailed by the non-metallic products sub-sector, made up of producers of cement, ceramics and glass.
Manufacturers in the non-metallic products sub-sector, however, were the best performers in terms of growth of investment as they put N17.7 billion into the economy in the first half of 2015 as against N14.12 billion reported in the first half of 2014 and N810.32 million in the second half of 2014.
Nigeria’s steel sector encompasses makers of primary and secondary aluminium products, cold rolled coils, wire rods, enamel ware, galvanised iron and steel, nail and wire, steel pipes, and steel.
The sector is critical to the Nigerian economy as it is known to create more jobs than any other sector when fully operational, and provides the majority of raw materials used by manufacturers in few other sectors.
But the local steel sector has been struck by lack of government protection from imports, wrongful granting of import waivers, inconsistent policies, legal tussles and sabotage.
“Some people have been bringing in steel pipes with wrong declaration to the Customs while paying five percent duty instead of 35 percent,” said steel pipe makers in a sectoral report released last year.
The waiver controversy has also torn the upstream and the downstream players in the cold rolled steel segment apart.
The downstream players, made up of manufacturers that use the cold rolled steel to further their production, say the upstream players, who are supposed to produce for them, are not doing so, but are rather importing from other countries despite that the federal government has given them some concessions that should enable them to manufacture in sufficient quantity.
Apart from waivers, legal tussles have held down the Ajaokuta Steel Complex in Kogi State and Aluminium Smelter Company in Akwa Ibom. The Ajaokuta Complex has the capacity to produce one million metric tonnes of steel, one million metric tonnes of coal , manganese and limestone, among others, according to industry players.
“Government should work towards the speedy removal of all impediments to the full privatisation and operation of Ajaokuta steel complex,” said Frank Udemba Jacobs, president, Manufacturers Association of Nigeria (MAN), in an agenda sent to Muhammadu Buhari.
Oluyinka Kufile, chairman, basic metal, iron & steel group of the Manufacturers Association of Nigeria (MAN), and chairman, Qualitec Industries Limited, told Real Sector Watch that the current state of the smelter company is frustrating aluminium producers and is preventing them from getting ingots, a basic raw material, locally.
The present Federal Government has shown some interest in revamping the steel sector.
Kayode Fayemi, minister of solid minerals, said recently that the government will soon unfold its blueprint for the rehabilitation of the Ajaokuta Steel and the National Iron Ore Mining Company, Itakpe, in Kogi State.
ODINAKA ANUDU