From ‘Condemn Condemn’ to High Earnings: Inside Nigeria’s lucrative scrap metal trade
Virtually everywhere around Nigeria, there is a growing industry that revolves around what many would consider discarded junk. Scrap metal, commonly called “Condemn condemn,” a term used to encompass various discarded metallic items, is rapidly emerging as a lucrative business across Nigerian cities and villages.
Nairametrics’ investigation reveals that these metal scavengers, often underestimated by society to be economically downtrodden, typically earn N200,000 monthly. That is more than bank tellers in most banks earn monthly.
One report by minesandsteel.gov.ng reveals that over 95% of the current steel production in Nigeria is from scrap metal. “Consequently, our focus is on developing the upstream mining sector, as we are endowed with huge iron ore deposits. We have a total of 43 Steel plants and fabricating outfits in the value chain, 90% of which operate in the downstream sector,” it said.
The implication is that the vast majority of Nigeria’s steel industry depends on raw materials from scrap collected by scavengers. It also is a telltale indication of the profitableness of the scrap metal trade.
The ubiquitous theft of handrails on bridges and other metal designs on public facilities is another indication of the high demand for scrap materials.
Another contributing factor to the demand for scrap metals is the development of Electric vehicles (EVs), according to a chemical engineer, Lekan Johnson.
He said EVs are playing a pivotal role in this transformation. He cited that the electrification of transportation demands an array of metals for the production of batteries, which account for a significant portion of an EV’s overall cost, noting that some of the scrap metals taken from garbage bins in Nigeria end up in factories in major economies around the world.
He said copper, among other metals, is experiencing an unprecedented surge in demand, with the International Copper Association forecasting nearly a tenfold increase in copper demand from the EV sector by 2027.
This growth stems from the expectation that there will be 27 million EVs on the road by 2027, up from three million in 2017, requiring a substantial amount of copper for their batteries, wiring, and infrastructure.
For the metal scavengers in Nigeria, this increasing demand translates into business opportunities.
A former Bureau de Change operator, Usman Mohamed, who has become a middleman in the trade, told Nairametrics that the scrapped items encompass a wide range, from disused electrical appliances to vehicle parts, condemned generators, and even discarded refrigerators.
He said while some of these materials are acquired at no cost on the streets or dumpsites, others are purchased at minimal prices and later resold to intermediaries.
These intermediaries, in turn, sell the materials to recycling companies, where they are melted and transformed into various valuable products like rods and pipes.
Nairametrics’ investigation reveals that the trade has given birth to a thriving middlemen segment in the value chain.
While many of the scavengers are uneducated and unaware of the rising demand for specific materials like copper, aluminium, and other metals, their bosses, who maintain direct relationships with recycling companies, capitalize on this demand to generate substantial income.
Babagana, a native of Kano State, has been involved in the scrap metal business in Lagos for approximately seven years. He collects scrap metals from different areas around Agege and also maintains customers on Lagos Island. He emphasized that despite societal prejudices against scavengers, they can be highly profitable.
He shared an example of purchasing a car engine for N40,000 from a customer and ultimately profiting nearly N20,000 by selling its components separately.
He further explained that he doesn’t stock these items due to the high cost of renting storage space in Lagos, choosing to sell them to his boss as he acquires them daily.
Babagana’s daily profits typically range between N7,000 to N10,000, sometimes exceeding this amount.
He is optimistic about the business’s potential, especially with the emergence of more recycling plants springing up in the country.
Scrap metal collection isn’t unique to urban areas; it is also thriving in states like Kaduna. The scrap metal collected by scavengers finds a second life in Kaduna and neighbouring states as it is melted and repurposed into various items, including cooking stoves, farm implements, local pots and pans, and buckets.
A Kaduna resident, Aliu, told Nairametrics that the trade supports many families and serves as a source of income.
He said some people in the business have already built homes from the trade.
In Abuja, the scrap metal business is booming, particularly among the youth. Many young entrepreneurs are turning to this trade to generate income and support their families. Scavengers, middlemen, and dealers collaborate in this ecosystem.
The scavengers, often quite young, collect different types of metals and also gather plastic items and abandoned cartons.
These materials, along with metals, are in high demand by middlemen who play a crucial role in the distribution chain. They transport these materials to dealers, who, in turn, sell them to various companies in Lagos and Kano, with some materials being exported abroad, Nairametrics learned. It is a common sight to see truckloads of scrap metals at night in Lagos, heading to the north.
The scrap metal trade, however, is not without its challenges.
Musa Bashir, who said he has worked at different levels of the trade, noted that among the issues faced by those in the business are fluctuating metal prices, the risk of purchasing stolen metals, and discrepancies in weighing materials.
Dealers, middlemen, and scavengers alike face occasional drops in metal prices, leading to financial challenges. He said criminals may sell stolen metals, particularly high-value items like copper and brass, which can embroil those in the trade in legal issues. Discrepancies in weighing materials can also lead to financial losses.
Nonetheless, the scrap metal trade remains a profitable venture for those involved.
As the demand for metals continues to rise, particularly in the construction and manufacturing sectors, this industry presents an opportunity for many Nigerians to earn a living and build a sustainable business.
While the work of scrap metal collection may not carry prestige in society, it has proven to be a viable and lucrative business that supports livelihoods and contributes to the nation’s economy.
Commenting about the booming scrap metal trade, a chartered accountant in Port Harcourt, noted, “Therein lies another thriving industry that the federal government can leverage on to increase tax collection,” stressing, “The industry is by all account, a multi-billion naira industry.”
Nairametrics.com
