Nigeria’s Ajaokuta Steel complex may soon start producing steel. The steel factory was built 39 years ago with Soviet aid at a cost of no less than $8 billion in public investment. It never managed to be productive, as it was hurt by repeated stops and starts, ownership changes, poor governance and other troubles.
The Ajaokuta Steel steel factory was intended to produce 3 million metric tons of steel annually, at full capacity. The main reason why the steel factory was never started up fully, was the fact that the rail line that would connect the plant to iron-ore mines and deliver the finished product, was never completed. President Muhammadu Buhari has now put a high priority on getting the plant into production. Work has begun on the long-awaited rail line, test runs are expected to start this year.
Nigeria depends on crude for 90 percent of its export earnings but suffers from shortages of foreign exchange due to low global oil prices, Bloomberg reports. This lack of foreign currency has driven up prices for everything from food to construction materials. There is a strong need for diversification as well as jobs for the growing Nigerian population. Bloomberg reports that Nigeria has vast deposits of iron ore.
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