Nigeria has taken a significant step towards revitalizing its steel industry with the signing of a Memorandum of Understanding (MoU) between the Federal Government and a Russian consortium.
This agreement, facilitated by Prince Shuaibu Abubakar Audu, the Minister of Steel Development, during his visit to Moscow, marks a major milestone in Nigeria’s efforts to revamp its steel sector.
The consortium, comprising Messrs Tyazhpromexport (TPE), Novostal M, and Proforce Manufacturing Limited, will lead the project aimed at revitalizing the steel industry in Kogi State.
The statement read: “The Federal Government of Nigeria through the Honourable Minister of Steel Development, Prince Shuaibu Abubakar Audu who led a Nigerian delegation to Moscow, Russia from 14th – 21st September, 2024, on a working visit, has signed a Memorandum of Understanding (MoU) with the original builders of Ajaokuta Steel Plant Messrs, Tyazhpromexport (TPE) and members of their consortium namely; Novostal M and Proforce Manufacturing Limited for the Rehabilitation, Completion and Operation of Ajaokuta Steel Plant (ASP) and National Iron Ore Mining Company (NIOMCO) in Kogi State, Nigeria.”Â
This partnership is expected to strengthen Nigeria’s manufacturing base and save significant foreign exchange by reducing the country’s reliance on imported steel, which currently costs an estimated $4 billion annually.
The MoU signing follows the Russian-led consortium’s inspection of the steel and iron ore mining facilities in Ajaokuta and Itakpe in August 2024.
This inspection demonstrated the consortium’s readiness to deliver on the agreement.
The Minister emphasized that the project aligns with President Bola Tinubu’s mandate to industrialize Nigeria.
During their visit to Russia, the Nigerian delegation, led by Prince Shuaibu, met with key stakeholders, including Deputy Minister of Industry and Trade of the Russian Federation, Mr. Alexey V. Gruzdev.
They also toured Novostal M’s state-of-the-art facility in the Saratov region, which has an impressive capacity to produce 1.2 million metric tonnes of steel annually.
The project is expected to create over 500,000 direct and indirect jobs, contributing billions of dollars to the economy and supporting President Tinubu’s goal of achieving a $1 trillion economy by 2030.
The Russian partners, including General Director of TPE, Mr. Egorov Sergei Anatolevich, and Proforce’s Group Managing Director, Mr. Adetokunbo Ogundeyin, pledged their commitment to the project’s success.
Dr. Chris Osa Isokpunwu, Permanent Secretary of the Ministry of Steel Development, reaffirmed Nigeria’s dedication to the project, hoping it would boost the nation’s industrial capacity and economic growth.
This development is a significant step forward, especially considering the previous administration’s efforts to sign an MoU with a Russian firm in 2020, which was stalled due to the COVID-19 pandemic.
It’s worth noting that the federal government has allocated N4.45 billion to the Ajaokuta Steel Company in the 2024 budget and is seeking N35 billion from funding institutions to revive the light steel mill, which has been dormant for over 42 years.
The Minister of Steel Development estimates that reviving the Ajaokuta steel mill will cost between $2 billion to $5 billion.
