20th August, 2020
The Federal Government has approved local production of bitumen and other construction materials that are being imported currently for construction of roads across the country.
The Federal Executive Council (FEC), which gave the approvals sequel to a memorandum presented to it by the Minister of Works and Housing, Mr. Babatunde Fashola SAN, also directed the Ministries of Petroleum Resources and Mines and Steel to develop strategies to enhance, stimulate and encourage local production.
The memo, which originated from an initiative of President Muhammadu Buhari, who had made inquiry about the sources of the major components in Road Construction and the possibility of producing them locally, will boost job creation and preserve foreign exchange.
In the Policy Memorandum titled “Approval For The Local Production Of Bitumen And Other Construction Materials In Nigeria”, Fashola, who drew the attention of Council to the fact that bitumen and other major road construction materials were currently being imported, submitted that when produced locally bitumen was expected to be sold at about N125, 000 per metric tonne, which, according to him, is 48. 8 percent of the cost of the imported one which stands at N285, 000.
According to him, in terms of job creation, producing bitumen locally would, aside reducing the cost of road construction significantly and other benefits earlier mentioned, would also generate no less than 30, 000 jobs for the unemployed in the country.
The Minister informed the Council that the Policy Memo which, was meant to stimulate local production of bitumen as a component of road construction, was an initiative of President Muhammadu Buhari, adding that the President has accordingly challenged the Kaduna Refinery and Petrochemical Company to key into the policy by collaborating with related agencies of government to realize the goal.
Noting that, in buying bitumen at such reduced price, the nation would be saving 56.2 percent of the cost of importation, the Minister also argued that aside boosting the nation’s construction capacity, the local manufacture would also create thousands of jobs for Nigerians.
He described the production as “a low grade crude oil which is either extracted from the ground or gotten as a by-product of refined crude oil”, saying it has an estimated 38 billion barrels of reserve and extra heavy oils that have remained untapped for years across the country but especially in Ondo, Lagos and Edo States.
Also drawing the attention of Council to the fact that the Kaduna Refinery and Petrochemical Company (KRPC) is the only refinery in the country that has the capacity to produce bitumen deposits, Fashola pointed out that with current installed capacity of 1, 796 metric tonnes per day, well above the present annual local consumption which, according to him, stands at 500, 000 metric tonnes, the company could produce bitumen to satisfy the nation’s requirement and even for export, adding, however, that to achieve that the company has to function at full capacity.
Some of the advantages derivable from the local production of bitumen and other construction materials, the Minister said, also include the diversification of the nation’s economy, improvement in technological growth, establishment of contracts vital for international cooperation in the new expanding technology and socio-economic impact on the areas of operation, among others.
According to him, local production would also help to maintain quality control on production through the Standard Organization of Nigeria (SON) and related Consumer Protection Agencies to ensure that the right quality of bitumen is produced for use by the construction companies while also ensuring further diversification of the nation’s economy.