Nigeria Drafts 2026 Scrap Metal Licensing Regime to Curb Theft

Nigeria's Federal Government has opened validation of the proposed Scrap Metal (Collection, Trading, Recycling and Regulation) Regulations, 2026, a framework that would force every operator in the country's scrap chain to hold a licence, verify material sources and keep transaction records.

The Ministry of Steel Development confirmed the move in a statement issued on Tuesday by Maureen Tine-Iulun, the ministry's Head of Press and Public Relations. The target is explicit: shut stolen metal out of the recycling market and stop the vandalism of critical infrastructure, above all electricity cables, railway components and manhole covers.

Minister of Steel Development Shuaibu Audu, represented at the two-day stakeholder engagement in Lagos by Ime Eprikpo, Director of the Metallurgical Raw Material Development and Investment Promotion Department, said the regulations would establish an organised and transparent scrap metal value chain.

"The Federal Government has intensified efforts to sanitise Nigeria's scrap metal industry, protect critical national infrastructure and strengthen the steel and metals manufacturing sector through the proposed Scrap Metal (Collection, Trading, Recycling and Regulation) Regulations, 2026," the statement read.

What would the 2026 regulations change?

The draft framework, now at the validation stage, carries five operational pillars:

• A structured licensing and supervision system for all operators, scaled to the size and risk of each business.
• Regulation of collection and aggregation centres.
• Transaction traceability, with records designed to block stolen material from entering the market.
• Stronger environmental protection and occupational safety standards.
• Improved monitoring and enforcement, backed by coordination between regulators, security agencies and law enforcement.

The government also expects the regime to improve the supply of locally sourced raw materials to steel manufacturers, formalise the activities of informal scrap dealers and support Nigeria's industrialisation drive. Scrap metal remains a key feedstock for steel production, foundry operations and other manufacturing, Audu noted.

How serious is the theft problem?

Audu identified the theft of electrical cables, railway components, manhole covers and other metallic installations as a major threat to national infrastructure. He said poorly regulated scrap activity has encouraged theft and vandalism of public and private infrastructure, producing economic losses, disruption of essential services and higher maintenance costs.

The consequences go beyond the value of the stolen metal, the minister explained. Such activities disrupt public services, endanger lives and increase the financial burden of maintaining infrastructure.

What happens to informal collectors?

The government says it will not flatten the livelihoods of thousands of Nigerians who depend on scrap collection and trading. Audu said the regulations would give small-scale collectors and traders a route to formalise their businesses through requirements proportionate to their operations.

"Our objective is not to suppress legitimate commercial activity. Rather, it is to establish a system in which lawful businesses can operate with greater clarity and confidence, while activities involving stolen materials, unsafe practices or environmental harm are addressed through appropriate regulatory and legal measures," Audu stated.

He stressed the government does not intend to impose unnecessary restrictions on small businesses, but will ensure that large-scale aggregation, processing and recycling facilities operate under appropriate licensing and safety standards.

What did other officials and dealers say?

Permanent Secretary Nura Abba Rimi, represented by Christopher Wanje, Director of the Metallurgical Inspectorate and Environmental Protection Department, said a properly regulated scrap industry is essential to building a competitive domestic steel sector. He said the regulations would curb the illegal trade in stolen metals and ensure recycling's economic benefits contribute to national development.

"Our objective is not to stifle legitimate businesses or discourage investment, but to establish a transparent, accountable and sustainable operating environment in which genuine entrepreneurs can thrive, investors can have confidence, and the steel industry can access reliable raw materials to support increased domestic production and value addition," Rimi stated.

Ogbu Luke Uchechukwu, National President of the National Association of Scrap and Waste Dealers Employers of Nigeria, called the engagement a landmark development for the steel industry. He described the validation exercise as more than a policy review — an important step towards an organised, regulated and economically viable scrap and waste industry.

What comes next?

The ministry has asked stakeholders to examine the draft and flag provisions needing clarification, particularly on implementation, operational requirements and compliance costs. Audu assured participants their submissions would be considered before the regulations are finalised, and said the ministry will work with relevant institutions to build enforcement capacity, improve public awareness and strengthen data collection across the industry.

The milestone to watch is the finalisation of the 2026 regulations themselves. Until the draft clears validation and the licensing regime takes effect, stolen cable and rail components will keep moving through an untraceable market.