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MAN, stakeholders seek N50bn intervention fund for steel industry

By BusinessNews Staff on October 1, 2015

Stakeholders in the manufacturing sector have called on the federal government to urgently intervene in the steel sector to avert its imminent collapse.
Chief Executive Officer of African Industries Group, Sanjay Kumar made the appeal on behalf of Nigerian steel manufacturers in a chat with THISDAY in Lagos.
Similarly, the Director General of the Manufacturers Association of Nigeria (MAN), Remi Ogungbefun has declared that the federal government’s urgent intervention was needed to save the nation’s manufacturing sector from imminent danger.
Kumar stated that efforts by the government to diversify the economy will not yield the expected fruits if the steel industry is allowed to collapse like the textile sector.
He therefore, urged the federal government to set up an intervention fund like it did for the agriculture and aviation sectors, stressing that the industry is the backbone and main thrust of all developed economies in the world.
After agriculture, he said the steel industry is the highest employer of labour in the country, noting the livelihood of over one million Nigerians depends on the steel industry.
He said owners of the over 30 private steel plants producing various steel products in Nigeria have invested well over N100 billion since inception, pointing out that these investments face imminent danger except something meaningful happens soon.
He also urged the federal government to create a local policy of using made in Nigeria iron rods in all small and big government projects and prevent dumping of steel products.
Kumar called of the government to create a special power tariff for the sector, stressing that manufacturers pay the least for power in industrialised nations.
He also urged the government to curtail multiple taxation imposed by the federal, state and local government agencies.
“Government can reverse the trend for the survival and resuscitation of the steel industry, which is currently facing serious challenges with measures such as creating of a local content policy of using made in Nigeria iron rods.
“Government should make available an intervention fund at lower interest costs to prevent the immediate collapse of this private steel industry where many are operating below 30 per cent capacity and overburdened with high interest costs, while waivers/concession may not stop completely for certain infrastructural development.
The portion of Iron rod importation in any waiver should be expunged. Review the high cost of Gas considering that Nigeria has huge gas reserves. The cost of gas in Nigeria is $7.31/mmbtu as against $4.2/mmbtu in United States,” he said.
On his part, Ogungbefun said: “The situation in the sector is very bad. So many companies have closed down and many more are about to close shop. This is as a result of policies that are not helpful to manufacturers. One of the greatest challenges facing the sector today is patronage. If government is ready for industrialisation, it must enact policies directly targeted at encouraging local manufacturing. “

[ThisDay]

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