Key players in the iron and steel sector are ahead of other manufacturers in terms of investments in the last three years, pumping N1.69 trillion into the Nigerian economy from 2013 to 2015.
Those who made these investments within the period were manufacturers in the business of foundry, metal packaging, steel pipe-making, metal manufacturing and fabricating, enamelware and galvanised iron sheets production, cold rolled steel making, welding, electrode manufacturing, as well as nail and wire production.
“The significant proportion of all manufacturing investments in the period under review was made in the basic metal, iron & steel, and fabricated metal group,” said the Manufacturers Association of Nigeria (MAN) in its latest economic review obtained by BusinessDay.
Data show that the steel group is followed by the chemical and pharmaceutical sector whose members launched N411.09 billion within the period. Next is the non-metallic products sector, which is made up of manufacturers of cement, ceramics and glass, with a cumulative investment of N364.43 billion.
Coming after non-metallic products sector is the food, beverage and tobacco sector, which invested a total of N269.55 billion.
The domestic/ industrial plastic and rubber players gave a good showing, with a total investment value of N207.76 billion.
Despite drawbacks in the Nigerian paper industry, its printing and publishing arm was able to pump N140.60 billion into the economy, while electronics and electrical players, especially those in the business of cable manufacturing, invested N49.68 billion within the period under review.
The laggards within the period include textile and footwear (N18.11 billion); motor vehicle assembly (N13.16 billion) and wood processors (N8.47 billion).
According to MAN, government needs to take measures against policy inconsistencies while also carrying stakeholders along in policy design to encourage new investments, boost job creation and achieve industrial objectives of the country.
Nigeria’s capital-intensive steel sector is beset by policy somersaults, lack of funding, non-payment of public contracts executed, poor demand and low international prices, among others.
The Ajaokuta Steel Complex, which is supposed to produce inputs for manufacturers has milked the country of over $5 billion in investments, yet the plant only serves as a repair station for companies’ plants and bolts.
Kayode Fayemi, Nigeria’s minister of mines and steel development, recently said government was considering concessioning the complex to the private sector. The government recently handed over Iron Ore Mining Company Itakpe to a private company, Globa Steel.
“We hope to have rolling mills working. We want machine tools industry to have enough steel to manufacture,” Rajan Suleiman, director-general of Kogi Chamber of Commerce and Industry, where the iron ore company is sited, told BusinessDay.
The global steel industry is hard hit by glut, occasioned by China’s export of cheap products. China, the world’s largest producer and exporter of steel, has ensured steel prices remain low in the international market for over 12 months now.
Nigeria’s steel makers are battered by low demand and prices which have now been worsened by recession. There is still importation of cheap steel into Africa’s most populous country, which makes indigenous companies complain of low patronage.
“There is a need to put a local content policy in place whereby all the steel users and all the government contractors should stipulate they must buy made-in-Nigeria steel,” Raj Gupta, chairman, African Industries Group, a consortium of 12 companies, including six steel plants, told BusinessDay.
According to Frank Jacobs, over 85 percent of manufacturing equipment are developed from the iron and steel industry. Jacobs advised that impediments to the privatisation of Ajaokuta Steel should be removed.
Closely trailing the Ajaokuta Steel Complex is the Aluminium Smelter Company, located in Akwa Ibom State, which 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.
ODINAKA ANUDU
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