The federal government has announced plans to secure over ₦35 billion in financing to restart the Light Mill Section (LMS) of the Ajaokuta Steel Company.
The Minister of Steel Development, Prince Shuaibu Audu, who made this known at the Ministerial Sectoral Update on the performance of President Bola Tinubu’s administration in the last one year, said that a presidential approval has been granted to raise the required funds from a local financial institution, as part of the Tinubu administration’s resolve to boost Nigeria’s economic profile.
“The local financial institution has given us a final offer. I have done a cover letter and forwarded the relevant documents to the Minister of Finance to be able to take the financing on behalf of the Federal Government.”
The LMS at Ajaokuta has the capacity to produce 400,000 metric tonnes of iron rods per annum, a critical component in driving industrialization across the country.
The minister said that the ministry is working closely with the Minister of Works to supply the iron rods needed for the over 30,000 kilometers of roads currently under construction in the various geopolitical zones.
“We understand that the ministry of works needs about seven million metric tonnes of iron rods over that four year period (first term) to construct these roads, Ajaokuta can produce 400,000 tonnes.”
Shuaibu Audu stressed the strategic importance of reviving the steel plant, adding that it would bolster Nigeria’s infrastructure.
He also talked about plans to revive the Ajaokuta 110 Megawatts power plant, which would power the steel company and contribute to the national grid.
Shuaibu Audu said that the ministry is exploring a public-private partnership model to provide the necessary financing, with three potential investors – Transcorp Power, Niger Delta Power Holding Company and Reticulated Global Engineering – already in advanced discussions.
He highlighted the ministry’s mandate to revive both the Ajaokuta Steel Company and the National Iron Ore Mining Company, as well as the overall steel industry.
He said that this vision is critical to President Tinubu’s “Renewed Hope” agenda, which aims to grow Nigeria’s economy to over one trillion dollars by the end of the first term, potentially elevating the country to the G20 league.
The minister said that a minimum of $2 million is required to revive Ajaokuta Steel and that the plan is to concession the company to entities with the necessary competence to get the job done.
“This strategic move is expected to unlock the full potential of the steel sector, contributing to the administration’s broader goal of industrializing the Nigerian economy.
Source: The PUNCH.
