HomeBusinessNigeria’s Steel Revival: FG Secures N35bn Funding for Ajaokuta Mill

Nigeria’s Steel Revival: FG Secures N35bn Funding for Ajaokuta Mill

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Nigeria’s quest to revive its steel industry has received a major boost as the federal government has secured N35 billion in funding from some partners to restart the light mill section of the Ajaokuta Steel Plant. The plant, located in Ajaokuta, Kogi State, is the largest steel mill in Nigeria and has been dormant for over four decades due to mismanagement and lack of funds.

The minister of steel development, Shuaibu Abubakar Audu, disclosed the move by the federal government in a meeting with Wole Adeniyi, the managing director of Stanbic IBTC Bank, one of the partners, in Abuja. He said the funding was part of the effort to revive the nation’s iron and steel sector and boost industrialization in the country.

According to him, the light mill section of the plant would produce iron rods for the construction industry, and the federal government had already secured agreements with the ministries of works and defense to be the off-takers of the products. He also said the ministry was working on building a military complex in Ajaokuta for adequate security of the plant.

The minister added that the plant had huge opportunities and potential to create jobs, generate revenue, and contribute to the nation’s economic development. He expressed optimism that the plant would soon be fully operational and join the league of steel-producing countries in the world.

Wole Adeniyi, the managing director of Stanbic IBTC Bank, said the bank was willing to partner with the ministry and provide the necessary financial support for the project. He, however, requested more details and documents from the ministry for their consideration.

The minister also met with the management of United Bank for Africa (UBA) and Voda Infrastructure Management Limited, the other partners in the funding deal, to finalize the arrangements and ensure the smooth take-off of the project.

The Ajaokuta Steel Plant was conceived and built by the Soviet Union in the 1970s and 1980s, to produce 1.3 million tonnes of steel per year. However, the project was abandoned due to political, technical, and financial challenges, and only the light mills were put into operation in 2018 for small-scale fabrication.

The revival of the plant has been a long-standing demand of the Nigerian people, who see it as a symbol of national pride and industrial progress. The plant is also expected to reduce the country’s dependence on steel imports, which cost about $3.3 billion annually, according to official data.

The federal government’s initiative to secure funding for the plant has been welcomed by various stakeholders, including the Nigerian Society of Engineers, the Nigerian Labour Congress, and the Steel and Engineering Workers Union of Nigeria. They have all expressed their readiness to support and collaborate with the government to ensure the success of the project.

The project is also in line with the African Continental Free Trade Area (AfCFTA) agreement, which aims to create a single market for goods and services on the continent. The agreement, which came into force in January 2021, offers a huge opportunity for Nigeria to leverage its steel production and export to other African countries.

The federal government has assured the public that it is committed to reviving the Ajaokuta Steel Plant and making it a catalyst for the nation’s industrialization and economic diversification. It has also appealed to the private sector and the international community to join hands with the government in this noble endeavor.

Source: Business Day

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