Aarti Steel Nigeria Limited, one of Nigeria’s steel makers, wants the Federal Government to totally ban galvanised corrugated roofing sheets to enable local manufacturers remain in business.
The firm says the Central Bank of Nigeria should delist cold-rolled steel from the 41 items not eligible for import, insisting that the country is yet to have the needed capacity to produce the item, which is essential in the manufacture of roofing sheets.
In an exclusive interview with Real Sector Watch, Okhai Ehimigbai, export executive at Aarti Steel, says the poor state of Ajaokuta and Aladja Steel complexes have adversely affected the performance of steel firms in the country, while urging the government to save the sector from death.
“Today we have been compelled to build a cold-rolled plant, which is very expensive,” says Ehimigbai.
“We have only one line out of four that is working, and that is producing at less than 30 percent capacity. We produce above 60,000 metric tonnes every year, and we export to Benin Republic, Ghana, and Senegal. We used to export to Chad but we have stopped,“ he says.
According to him, the Nigerian steel industry is struggling and underdeveloped because the country misplaced its priority, having allowed Ajaokuta Steel Complex to die.
He believes that selling Ajaokuta and Aladja steel complexes to Russians and Indians have created more problem for the sector and the economy.
Nigeria’s steel industry is hampered by policy somersault, which has drawn back the growth of the sector over the years. The downstream sub-sector of steel, made up cold-rolled users, recently engaged in a fisticuff with the upstream segment (cold rolled producers) over waivers.
The former believes that the upstream players that got waivers to import cold-rolled steel from the previous administration did not deserve same. Players in the downstream believe the upstream should be producing cold rolled steel, rather than seeking waivers to import what they claim to produce.
The dwindling finances of the government at all levels mean that some players in the steel sector are yet to be paid money owed to them by sub-national and the Federal Government. The steel industry is also hard hit by low demand and falling prices.
According to the export executive, government needs to resuscitate the Export Expansion Grant (EEG) scheme to boost exporters’ confidence and enable them bring in the desperately needed foreign exchange.
He says Aarti used to employ up to 4,000 workers, but currently has 200 staff members, stating that the industry should not be left to die.
He further explains that the cost of gas is very high in the country, urging the government to reduce this, as doing this will have a positive impact on the production costs of firms.
“Government needs to support the sector. You pay the same amount for gas whether you consume less or high quantity of gas. This is not fair,” he notes.
ODINAKA ANUDU
