Nigeria has signed an MoU with a Russian consortium to revive the Ajaokuta Steel Plant and NIOMCO. The project aims to reduce steel imports costing $4 billion annually and create over 500,000 jobs, contributing substantially to the economy. The rehabilitation aligns with President Tinubu’s industrialization plan and hopes to achieve a $1 trillion economy by 2030.
The Nigerian Federal Government has signed a Memorandum of Understanding (MoU) with a consortium of Russian firms to rehabilitate and operate the Ajaokuta Steel Company Limited and the National Iron Ore Mining Company (NIOMCO). This agreement was finalised during a working visit to Moscow by the Minister of Steel Development, Prince Shuaibu Abubakar Audu, establishing a significant step towards revitalising Nigeria’s steel sector, especially in Kogi State. The consortium consists of Tyazhpromexport (TPE), Novostal M, and Proforce Manufacturing Limited, who will oversee the project aimed at reducing Nigeria’s dependence on imported steel, which costs approximately $4 billion annually. The rehabilitation is expected to create over 500,000 jobs and contribute significantly to Nigeria’s economy, with aims to achieve a $1 trillion economy by 2030. The MoU follows inspections of the steel and mining sites in Ajaokuta and Itakpe conducted by the consortium last August. Nigerian officials met with Russian stakeholders and toured Novostal M’s facility during the visit, receiving assurances of commitment from the Russian partners for the project’s success. The Nigerian government had previously indicated plans for similar agreements but faced delays due to the COVID-19 pandemic. In the 2024 budget, ₦4.45 billion was allocated for Ajaokuta’s revival, with an additional ₦35 billion sought from funding institutions. The estimated cost for restoring operations at Ajaokuta is between $2 billion and $5 billion.
The Ajaokuta Steel Plant, dormant for over 42 years, is a crucial aspect of Nigeria’s industrial sector. Past administrations aimed to revive the plant, recognising the potential economic benefits. The new agreement with Russian firms signals a renewed commitment by the current government to revitalise the steel industry, which is vital for reducing imports and boosting local manufacturing. This effort aligns with President Bola Tinubu’s economic vision for Nigeria, aiming to improve self-reliance and economic growth.
The MoU with the Russian consortium marks a critical development in Nigeria’s long-term plan to revitalise the Ajaokuta Steel Plant and NIOMCO. This initiative is expected to enhance local manufacturing, foster job creation, and strengthen the economy while reducing dependency on imported steel. With significant funding and expertise from Russian partners, the project is positioned to significantly impact Nigeria’s industrial landscape.
Original Source: nairametrics.com