UNLEASHING THE POTENTIAL OF IRON AND STEEL FOR NIGERIA’S INDUSTRIALIZATION AND ECONOMIC GROWTH
By Musa Bakare
Iron and steel are the backbone of industrialization and economic development for prosperous nations. Countries with robust steel industries enjoy increased manufacturing, enhanced export capacities, and significant job creation, which together drive national prosperity.
Therefore, investing in steel production not only bolsters technology and infrastructure but also elevates overall economic competitiveness.
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The iron and steel industry has historically played pivotal roles in the economies of many countries, and Nigeria stands at a critical juncture in harnessing this potential under the leadership of President Bola Ahmed Tinubu and Minister Shaibu Abubakar Audu.
The government’s renewed agenda is focused on tapping existing opportunities to achieve industrial revolution and drive economic growth.
The development of Nigeria’s iron and steel sector transcends mere production increments; it is fundamentally about laying a solid industrial and economic foundation.
By tackling existing challenges and leveraging the nation’s rich resources, Nigeria will attain self-sufficiency in steel production, paving the way for broader industrialization and economic stability.
This ambition necessitates strategic investments, policy reforms, and collaborative efforts to realize the country’s true potential and ensure a sustainable future.
Countries with strong steel industries, including the United States, China, Germany, and India, consistently display rapid economic development, industrial expansion, and infrastructure growth directly correlated to their steel sectors.
Germany’s steel industry is instrumental in powering its automobile sector, hosting giants like BMW, Mercedes-Benz, and Volkswagen, which significantly contribute to the national economy.
Similarly, India, as one of the largest steel producers, demonstrates how companies such as Tata Steel and JSW Steel drive economic growth.
Japan’s post-WWII recovery was significantly supported by its steel industry, leading to the emergence of automotive titans like Toyota, Honda, and Nissan.
The advanced steel production processes in Japan underpin critical sectors such as high-speed rail and robotics. South Korea’s POSCO is a testament to how a leading steel producer can fuel growth in automobile manufacturing and shipbuilding.
For Nigeria, endowed with significant natural resources and a youthful workforce, transforming the iron and steel sector is crucial for achieving sustainable economic growth, creating jobs, and pursuing industrial self-sufficiency.
The current Federal Government’s commitment to investing heavily in iron and steel development stands to transform the macro and microeconomic landscape, catalyzing industrialization, job creation, and expansive economic growth.
Nigeria imports a large percentage of its steel, which adversely affects the Naira due to increased foreign exchange demands. Scaling up local production can mitigate imports, stabilize the currency, and enhance Nigeria’s trade balance.
A robust domestic steel industry will attract investments across the automobile, shipbuilding, and construction sectors. Foreign companies will establish factories in Nigeria, facilitating technology transfer and job creation, while also boosting manufacturing and infrastructure development.
The dedicated efforts of the Minister of Steel Development, Prince Shaibu Abubakar Audu, toward revitalizing and expanding iron and steel plants in Nigeria will inevitably result in both direct employment within factories and indirect employment in ancillary sectors such as transportation, logistics, and services.
A vibrant iron and steel industry will spur technological innovations and advancements across various sectors, thus enhancing productivity and competitiveness. Nigeria possesses significant iron ore deposits and energy resources, both of which are critical for steel production.
However, the sector currently faces numerous challenges, including the operational and financial constraints plaguing existing steel plants like the Ajaokuta Steel Company.
The government’s current focus on reviving Ajaokuta Steel Company and addressing the issues of dormant steel industries is a positive step. Investments in modern mining technology to improve iron ore extraction, favorable policies to stimulate local steel production, low-interest loans, and incentives for steel-dependent industries, along with developing skilled manpower through education and training programs, are essential to elevate Nigeria’s industrial capacity.
With sustained investment and supportive policies reflecting the renewed agenda of President Tinubu, iron and steel development has the potential to revolutionize Nigeria’s economy, transforming it into an industrial powerhouse.
This transformation would lead to job creation, reduced imports, a strengthened Naira, and enhanced economic diversification, ultimately setting the stage for long-term prosperity.
Hon. Musa Asiru Bakare is a member of the Tinubu Support Group (TSG), writing from Lokoja, Kogi State Capital.
March 21, 2025.
