Hello
This is a highly common for a lupo to have a corroded axle you're best option in my opinion is to source another one and get it sand blasted and painted, or you can get a wire wheel on a grinder and wire brushes to remove the rust as much as you can.
I then used multiple products such as hammerite kurust first then bonda rust primer as a base, then get yourself a can or two of black paint (or whatever colour you want) then give it a few coats.
then apply a strong clear coat to lock it in and keep the weather out for longer.
Make sure you get in every hole possible.
Also bare in mind you'll need rear brake lines if you want to replace them and the flex hoses while it's all out to make it easier for the future, Guaranteed they don't look to handsome after 22 years on the road of they haven't been replaced since factory.
Make sure that you don't make the mistake that I did first time around, do not put hammerite paint on it,it traps in moisture. It flakes off within a matter of weeks and wrecks the perfectly good axle you have.
I have pictures of my axle refurb I can post so you can see the results from hard graft if you are keen on saving it for longer.
I will attach pictures of how my one turned out.
Here is an eBay link to an axle if you are desperate for one.
https://www.ebay.co.uk/itm/235622630615?mkcid=16&mkevt=1&mkrid=711-127632-2357-0&ssspo=QLk2QHBcTpO&sssrc=4429486&ssuid=RLYgmDT5TBq&var=&widget_ver=artemis&media=COPY