Nigeria's Steel and Petroleum Import Replacement Targets in Doubt

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--Nigeria is seeking to build a vibrant and expanding steel industry, using its vast reserves of natural resources and human capital, as part of the country's plans to develop the economy.

Unfortunately, the federal government is already sounding warnings that under current plans, the targeted annual production of 15 million tons of steel by 2020 may be unattainable.

Musa Mohammed Sada, Nigeria's Minister of Mines and Steel Development, said at an industry forum in the commercial capital of Lagos that Nigeria currently imports about 17 million tons of steel annually and has domestic production of only 2.5 million tons. The minister stressed how wasteful the situation was, considering that the country possesses more than 2 billion tons of iron-ore deposit and more than 1 trillion tons of coal deposits, the two major inputs in steelmaking.

The government earlier resolved major issues, which were holding up the operation of the Ajaokuta Steel Company and the Nigerian Iron Ore Mining Company at Itakpe, in the Kogi state. Other steel plants are operating far below their design-capacity levels. An interim target of 3 million tons of production was set for 2015.

A similar import replacement strategy is being put into place in the petroleum sector. Minister of Industry, Trade and Investment Olusegun Aganga said: "The nation was aiming at ending the importation of petroleum product into the country by 2017. Nigeria is riding on the $16 billion investment commitment already made in the local petrochemical industry by both indigenous and foreign investors; it was targeting the termination of the importation of refined petroleum products into the country."

The $9 billion integrated petrochemical plant project being undertaken in Nigeria would require the services of between 5,000 and 8,000 indigenous engineers, underscoring the need for rapid development of human capital within the country, in pursuit of the industrial revolution objectives of the federal government, Aganga said.

Aganga added that in order to begin to address the serious human capital challenges facing the country, the Industrial Training Fund, a parastatal under his ministry in collaboration with the United Nations, was conducting the country's first-ever national skills-gap survey, with the result set to be released between March and April 2014.

For related information, see April 19, 2013, article - Africa's Richest Man to Take on Challenge of $8 Billion Nigerian Refinery.

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