Nigeria government is seeking investment of $7 billion to resuscitate a moribund mining and steel sector as the country grapples with its worst economic crisis in a decade in the steel sector.
According to Bloomberg, Minister of Solid Minerals Development, Kayode Fayemi, said about $5 billion will kick- start a sector that was neglected by previous government due to misplaced priorities.
“One of the government’s priorities is to meet its annual steel demand of 6.8 million metric tons, from a current output of a third of that, produced mainly from scrap iron,” said Fayemi.
Nigeria is intensifying all types of available machinery to diversify the economy and reduce the reliance on oil, which accounts for two-third of government revenue and 90 percent of foreign exchange earnings.
Oil prices have slumped and the economy has contracted by 0.4 percent in the first quarter, the lowest since 2004 while the IMF forecast that the GDP will shrink further by 1.80 percent on the back of currency risk and rising food prices.
Militant attacks have further dampened government revenue, as the country will pump not more than 1.5 million barrels a day, the lowest since 1985.
Fayemi said that Nigeria aims to increase mining’s contribution to gross domestic product of seven percent within a decade, from 0.30 percent last year. In pursuant of this, he said the country will need $2 billion to revive the Ajaokuta steel in Kogi State.
