After facing what appears to be sabotage from the Nigerian Midstream and Downstream Regulatory Agency (NMDPRA), President and Chief Executive Officer (CEO) of Dangote Group, Aliko Dangote, has announced that the company will abandon its plan to invest in the steel industry.
The NMDPRA had, in an unprecedented move, carpet the effort of Dangote’s Refinery in producing fuel locally. (Locally produced fuel will help Nigeria break away from reliance on imported fuel, which is the biggest foreign exchange guzzler).
Dangote said he was dropping investment in Steel development while addressing journalists at his refinery in Lagos on Saturday.
The business tycoon explained that the company’s board decided to avoid the steel industry to prevent accusations of attempting to monopolize it.
Furthermore, he noted that pursuing this venture would involve encouraging the importation of raw materials from overseas, which contradicts the firm’s core mandate.
“You know, about doing a new business which we announced, that is, steel.
“Actually, our own board has decided that we shouldn’t do the steel because if we do the steel business, we will be called all sorts of names like monopoly. And then also, imports will be encouraged. So we don’t want to go into that,” he said.
Dangote, however, urged other Nigerians to invest in the industry to help boost the country’s economy.
“Let other Nigerians go and do it. We are not the only Nigerians here. There are some Nigerians with more cash than us. They should bring that money from Dubai and other parts of the world and invest in our own fatherland,” the CEO added.
Dangote had in June said his company plans to delve into steel production in the near future stating that he wants to ensure that every steel used in West Africa comes from Nigeria.
He noted that the next venture after the refinery project would be in steel manufacturing and ensure that all steel products used in West Africa come from Nigeria.
“I don’t like people coming to take our solid minerals to process and bring the finished product. We should try and industrialise our continent and take it to the next level.
“I told somebody we are not going to take any break. What we are trying to do is to make sure at least in West Africa, we want to make sure that every single steel that we use will come from Nigeria”, Dangote said at that time.
Nigeria has tried unsuccessfully to become a leader in the steel manufacturing industry with a handful of failed projects like the Ajaokuta steel plant, Delta Steel Company, Osogbo and Jos rolling mills even under government and private ownership.
Like the oil refineries, the federal government under different administrations has spent billions trying to put the local steel plants to work but has been unsuccessful.
The administration of President Bola Tinubu had promised during the campaigns to ensure steel production starts in the multi-billion-dollar Ajaokuta steel complex.
Dangote investment in the industry might have been a game changer, attracting more capital and economic opportunity to the sector.
However, with the recent revelation and decision from the African richest man, the steel industry may still linger in the shadow of underinvestment for years to come.
Additional report from Nairametrics
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