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Wednesday, July 17, 2024

Dangote announces plans to commence steel manufacturing 

Dangote announces plans to commence steel manufacturing 

Africa’s richest man, Aliko Dangote, has announced plans to establish a steel production company in Nigeria.

He aims to ensure that every steel used in West Africa comes from Nigeria, encouraging domestic investment and reducing reliance on imports.

Dangote made this statement during the Afreximbank Annual Meetings and AfriCaribbean Trade & Investment Forum in Nassau.

He had previously announced his intentions to invest significantly in the steel sector and achieve revenue in excess of $30 billion by the end of 2024.

READ ALSO: Dangote reveals stake in new truck-making company and Peugeot

Nigeria has attempted to become a leader in the steel manufacturing industry but has faced numerous challenges with projects like Ajaokuta Steel Plant, Delta Steel Company, Osogbo and Jos rolling mills remaining unsuccessful under both government and private ownership. The federal government has budgeted around N4.45 billion for the revival of Ajaokuta Steel Complex but estimates suggest it could cost between $2 billion to $5 billion.

Despite these challenges, Nigeria is home to significant iron-ore deposits, a critical raw material in steel production found in Kogi state. Currently, total steel consumption in the country averages around 10 million metric tonnes with 70% being imported, costing around $4 billion annually.

Dangote’s entry into the steel industry could potentially bridge this gap and reduce Nigeria’s reliance on imports. With over 30 existing steel manufacturers producing only 2.2 million tons a year, there is significant room for growth and investment. However, it remains to be seen how successful Dangote’s venture will be given the historical challenges faced by the industry in Nigeria.

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