Iron & steel industry to add US$5bn to economy under NEDS project


The National Export Development Strategy (NEDS) has outlined plans to revive and boost the country’s underutilised iron and steel industry in a move to bring revenue of more than US$5billion over the next 10 years that the programme will be in existence.

Current export earnings from iron and steel products were around US$127.7million as at the end of 2018 – a figure implementer of the NEDS, Ghana Export Promotion Authority (GEPA), wants to increase to US$251million by end of this year.

However, the industry is beset with setbacks – such as the absence of an iron-ore mining and smelting industry that will provide adequate local raw material to feed the iron and steel industries; and inability to utilise a significant proportion of installed capacity owing to scarcity of raw materials.

Others include the absence of rail transport to the northern and other parts of the country to facilitate transportation of products from iron-ore mines to smelters and steel mills; high cost of electricity and water; and inadequate enforcement of standards, regulations and laid-down tariff guidelines on imported iron and steel products.

These have blighted prospects and the possible optimum gains the industry can add to the economy. It is against this backdrop that NEDS has intervened with strategies such as expediting action on development of an integrated iron and steel industry from iron-ore mining to manufacturing iron and steel products; assisting firms to develop measures that enhance competitiveness of the iron and steel sector through cost-reduction and other strategies; and deploying tariff instruments to safeguard and protect the local iron and steel industry.

Other strategies are: promoting investments, including Foreign Direct Investments (FDIs), into iron and steel production; providing incentives and cost-reduction packages for companies that venture into manufacturing tertiary iron and steel products; and promoting locally-made iron and steel products in the sub-regional and other African markets.

The NEDS further will leverage the existing and rising demand for iron and steel products across Africa, and regional trade agreements like the ECOWAS Trade Liberalisation Scheme (ETLS) and African Continental Free Trade Area (AfCFTA) to facilitate international market access for Ghana’s iron and steel product exports.

The programme will also take advantage of the country’s well-established existing iron and steel industry, with over five decades’ history of converting scrap-metal and other raw material into value-added iron and steel products; and availability of skilled labour to improve fortunes and achieve the 10-year set target.

To kick-start the programme, a new US$80million iron and steel factory has been commissioned at Kpone in the Ningo Prampram district of the Greater Accra Region. The factory, which is a beneficiary of government’s One-district, One-factory (IDIF) initiative, has the capacity to produce 60,000 tonnes of prefabricated iron and steel products annually, to serve the needs of industries in the country and West Africa.

According to GEPA, the iron and steel industry employs about 4,500 direct workers and 17,000 indirect workers. The installed capacity of the local steel industry is about 1,000,000 metric tonnes per annum against an annual average demand of about 350,000 metric tonnes per annum, resulting in a surplus of 650,000 metric tonnes per annum.

About the NEDS

The NEDS is developed around three main strategic pillars which seek to: expand and diversify the supply base for value-added industrial export products and services; improve the business, regulatory environment for export; and build and expand the required human capital for industrial export development and marketing.

The first strategy seeks to promote, at least, 10 FDIs annually into the large-scale industrial exports sector; upgrade and directly support expansion of 20 majority Ghanaian-owned industrial exporters to attain global status; upgrade and directly support expansion of 100 middle-bracket exporters to attain top-bracket NTE earning status; and upgrade and directly support the expansion of 200 emerging district level export companies to attain middle-bracket NTE earning status.

The second strategy will also review and streamline regulatory and documentary requirements for export, and institutionalise effective public/private sector engagement mechanisms for export development. And the third strategy seeks to focus on upgrading the Ghana Export School to tertiary institution status and decentralise faculty to regional level with district coverage. This will introduce industrial export modules and practical internship in secondary and tertiary institutions to achieve mindset transformation toward export.

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