Manufacturers demand iron, steel sector revival to steer industrial revolution

Manufacturers in Nigeria say the country cannot attain the sought-after industrialisation and diversification targets unless there is a clear-cut strategy by the new minister of industry, trade and investment to revive the under-performing iron and steel complexes.

“Government should work towards the speedy removal of all impediments to the full privatisation and operation of the steel complex,” said Frank Udemba Jacobs, president, Manufacturers Association of Nigeria (MAN), in an agenda sent to Muhammadu Buhari.

“The Federal Government recognised quite early, the need for the establishment of iron and steel complexes, which was considered essential in kick-starting the industrialisation process in the country. Over 85 percent of manufacturing equipment are developed from the iron and steel industry.

“Thus the Federal Government established the Ajaoukuta Steel Complex Limited (ASCL) and other rolling mills in the country with a view to creating a solid industrial base, as well as a national engineering culture for the economy,” Jacobs further said.

He however added that the Ajaokuta Complex, which was earlier reported to have attained near completion status, and on which over $5 billion had been spent, remains uncompleted and is involved in an intractable legal tussle between the concessionaire and the Federal Government.

There has not been a comprehensive plan to develop Ajaokuta  Complex, which is an integrated plant capable of producing one million metric tonnes of steel,  one million metric tonnes of coal , manganese and limestone, among others.

Mohammed Musa Sada, immediate past minister for mines and steel development, had said that there were staff in the complex engaged in the repair of cement plants and bolts, but industry players say the complex is not doing its primary job, which is the production of steel, billets, iron and other products that are constantly being imported by manufacturers.

Closely trailing the Ajaokuta Steel Complex is the Aluminium Smelter Company, located in Akwa Ibom State, which, like the former, is caught in a legal war between the concessionaire and the Federal Government.

Oluyinka Kufile, chairman, Basic Metal, Iron and Steel Group of the Manufacturers Association of Nigeria (MAN), and chairman, Qualitec Industries Limited, said that this is frustrating aluminium producers and is preventing them from getting ingots, a basic raw material, locally.

“We need that resolved. The Aluminium Smelter Company needs to be re-started so that we can get ingots for local roofing sheets manufacturers,” Kufile told BusinessDay earlier in an interview.

One of the problems in the iron and steel industry is the unnecessary granting of waivers and unbridled importation of iron and steel products without payment of duties.

A recent statement by steel pipe producers said that some importers have been bringing in steel pipes with wrong declaration to the Nigeria Customs Service, while paying five percent duty, instead of 35 percent.

Kamoru Ibitoye Yusuf,CEO of Kam industries, which operates a large cold roll mill in Ilorin, Kwara state, said the country needs a consistent policy on duty rates, so as to attract more investments to the cold rolling mills in Nigeria.

“It is from cold rolling mills that base materials for making automobile panels and other components are derived, so if you encourage investment in this sector it will galvanise local auto production and generate jobs,” Yusuf said.

“Iron rods have been protected by 50 percent duty, cold roll has not been protected. That is the reason investors are running away from that end of the business. One cold rolling mill can sustain 50 to 100 local industries which will create jobs,” he added.

Similarly, nail and wire makers say the influx of fake finished products has made patronage difficult and put the sector in peril. The group says duty on wire rods should be increased from 20 percent to 50 percent, while enamel ware makers call for upward review of duty from 20 percent to 35 percent.

ODINAKA ANUDU