IN eight years of President Muhammadu Buhari administration, a government agency named the National Steel Raw Materials Exploration Agency (NSRMEA) Kaduna was allocated N12.457 billion to explore steel-related inputs for industrial uses but it failed to deliver results.

Schedule 2 of the Act establishing the National Steel Raw Materials Exploration Agency Kaduna says that the number one function of the agency is to “carry out the exploration of steel raw materials in all parts of Nigeria and else- where for the iron and steel industry.”

The second responsibility, according to the Act, is to “establish and execute a steel raw material base including mineral resources management, monitoring, resources utilisation studies and inventory in relation to the iron and steel industry.”

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There are other functions of the agency as outlined in the Act. However, steel makers and other stakeholders told Economy Post that they were yet to see the results of the government agency.

And evidence of this abounds. Between 2016 and first half of 2023, Nigerian imported base metals and articles of base metals such as lead, zinc, copper, iron, among others, valued at N5.902 trillion, according to the National Bureau of Statistics (NBS) Foreign Trade Statistics.

Major steel raw materials absent

Major steel raw materials are also visibly absent in the country, according to industry players. Steel makers mentioned hot-rolled steel and cold-rolled products as major raw materials used by aluminium, nail and other steel firms that were absent in the country.

Apart from them, zinc and flux are also major inputs for steel makers, which are heavily imported.

“We import hot-rolled and cold-rolled steel. We also import zinc and flux. Hydraulic acid and soda are locally available, however. Most of the government-owned institutions that are in the steel sector are not working. Itakpe is not working; Ilaje is not working, and Ajaokuta is not working,” Export Manager of Aarti Steel, Mr Okhai Emimigbai, told Economy Post.

Big budgets, low output

The National Steel Raw Materials Exploration Agency Kaduna has received some of the biggest budgets among agencies and parastatals under the Ministry of Mines and Steel or Ministry of Steel Development. In 2016, one year after Buhari became president, the agency was allotted N1.965 billion, as against N593.255 million received the previous year.

Source: Budget Office of the Federation

Allocation to the agency fell to N1.816 billion in 2017 before hitting N2.069 billion the following year. It, however, fell to N1.438 billion the following year, before further dropping to N1.186 billion in 2023.

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Ajaokuta, another wasteful behemoth

Under the same ministry is Ajaokuta Steel Complex, which has become a behemoth.

Nigerian government under former Buhari spent N29.606 billion on salaries of staff of the moribund steel complex from 2016 to first half of 2023 even though the plant produced zero steel, Economy Post had earlier reported.

A small fraction of the N29.606 billion (less than 20 percent) was used to settle overhead costs of the plant, including rents, utilities, office maintenance, among others.

Only N2.338 billion was deployed to capital expenditure within the period under review, showing that insufficient efforts were made to revivify the plant in seven and a half years under Buhari.

Experts knock agency

Experts and major players in the Nigerian steel sector have criticised the NSRMEA for not making much industry impact even though it has embarked upon several events.

A chief executive officer of an Ogun State-based steel company, who preferred not to be named, said the government agency had failed to increase local input sourcing within the industry and had given steel makers little hope of reducing incessant importation of raw materials.

“We do not know much about the agency because, for us, it is not so visible. We have not seen much from them. I think it should begin to live up to its name by helping to improve local iron and steel raw materials exploration to reduce frequent imports. The majority of our raw materials are imported, which is unfortunate,” the industry player said.

An economist, Mr Eze Anyaeso, said Nigeria would not make much progress if there continued to be the town-gown hiatus, noting that efforts must be made by President Bola Tinubu to plug the gap.

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“There is an urgent need for the industry to feel and see what academics and experts at government institutions do. That is clearly the case here, and the head of the agency should intensify efforts to improve the situation,”Anyaeso noted.

Agency’s activities

Director-General and Chief Executive Officer of the agency, Mr Michael Kolawole Ogunbiyi, recently said NSRMEA was committed to completing its ongoing silica sand, bauxite, and manganese exploration projects in line with stipulated schedules.

“We are currently on the verge of completing our Igbokoda Silica Sand exploration project Block F1. We hope to deliver that by the end of the year. That project is very promising and we are sure that it’s going to prove to be economically beneficial to Nigeria. Silica sand is used as a material for glass making, abrasive, foundry, hydraulic fracturing applications, and several other industrial uses. Having proven substantial commercial reserves can trigger huge investments in local steel making and glass manufacturing,” he was quoted on the agency’s website as saying during a briefing in Kaduna.

“We are also working on other targets, such as Bauxite exploration on the Mambila Plateau, in Orin-Ekiti, and Oban Massif, as well as Inseam Coal Exploration. We also have our team working on Manganese in Aiyedayo, Mopa-Moro Local Government Area of Kogi State; as well as in Aking and Utuwang in Cross River state, among other locations. We have a broad-based approach to exploration, in preparation for the immense activities that are set to kick-off in the steel sector,” he noted.

The agency has embarked upon several beneficial activities, but it is failing on its basic responsibility, which is making raw materials available to steel makers