Reviving Nigeria’s Leather Industry

Sat, Sep 28, 2013
By publisher

BREAKING NEWS, Business, Featured

Stakeholders in Nigeria’s leather industry are worried over its virtual death and initiated a series of activities to revive it

By Vincent Nzemeke  |  Oct. 7, 2013 @ 01:00 GMT

FOR some years now, Nigeria’s leather industry has been inactive due to neglect by government. Stakeholders in the industry expressed concern that the industry which is the second largest non-oil sector in the country and has the potentials of generating revenue for the government, was not given much attention. To save the industry from total collapse, the Leather and Allied Products Manufacturing Association of Nigeria, LAPAN, sought ways of reviving the industry.

The organisation recently started a campaign to draw the attention of the federal government and other stakeholders to the challenges facing the industry and how to reposition it for optimum performance. The campaign which has taken members of the organisation through the length and breadth of the country, climaxed in a two-day summit on leather industry revival.

Under the theme: ‘Supporting the Transformation of Nigeria Leather Industry,’ the summit took place from September 16 to 17,  in Abuja. It attracted participants from the leather industry, representatives from the federal ministry of industry, trade and investment, federal ministry of agriculture and rural development and also the media.

Speakers at the summit deliberated on a host of issues bordering on the evolution of the industry, the regulatory environment, laws and policies, human resource capacity for the industry, among others. They also focused on the issue affecting the growth of the leather industry and proffered solutions on how best to tackle them.

At the opening session, Olusegun Aganga, minister of industry, trade and investment, noted that the leather industry is second to the oil industry in foreign exchange earnings for the country. Aganga, who said that Nigerian leather products were exported to Europe and Asia, stressed the need for improvement in quality and standards and the introduction of a new technology in the industry.

Akinwunmi Adesina

The minister decried the export of leather as a raw material, saying it amounted to the export of jobs outside the country. He assured that the ministry was committed to reducing the cost of production in order to make leather products more competitive. Aganga also commended the efforts by the Department for International Development, DFID, for its support to the sub-sector.

Also speaking at the summit, Akinwumi Adesina, minister of agriculture and rural development, said the leather industry would be captured in the growth enhancement support, GES, scheme to advance the agricultural transformation agenda of the present administration.

Adesina, who was represented by Joseph Ayanger, director of livestock in the ministry, said the ministry would partner with the ministry of trade and investment to ensure quality production in the industry.

“Leather comes from livestock and livestock contributes to several agricultural commodities such as meat, and even earns much more than any other non-oil export. That is why we are happy to be partnering with trade and investment. What we are trying to do, as much as possible, is to provide them with the raw materials. Leather is part of the commodities we are handling as a value chain; in the past two decades, this is the first time leather has got a budget line in the federal ministry of agriculture.”

Christian Rogg, the acting head, DFID Nigeria, said that the department was committed to supporting LAPAN because of its potential to create more jobs in the industry. Represented by Ogechukwu Omeribe, programme manager of the economic growth team of the organisation, Rogg said that the support was to guide LAPAN on how to improve the industry’s performance. She added that the support would also enable LAPAN to engage in dialogue with government and other stakeholders to implement the leather transformation plan.

“The reason why DFID Nigeria has decided to support LAPAN is that we see it as a credible partner in the sector. We also believe that the leather industry has tremendous potentials to generate foreign exchange and create employment. We know that there is a lot of unemployment in Nigeria, particularly among the youths. And we know that this will be of benefit to micro and small businesses as well as to the youths and the poor in our communities.”

At the end of summit, the participants issued a communiqué which detailed all the issues discussed and recommendations made. They noted that despite its position as the second largest non-oil foreign exchange earner, the leather industry has witnessed a decline over the past decades especially at local production levels due to deficits in technology, finance, market access, product quality, and other challenges.

They also observed that there was a dearth of industry–specific data required for effective planning and institutional control of the leather industry and that the quality of leather produced in the country was affected by factors such as the limited institutional control of abattoirs, poor technological input and the absence of a national standardisation process. It was also observed that the current policy context distorts the local market and makes it more beneficial for finished leather producers to export rather than sell to the local market.

Having listed out these challenges, stakeholders at the summit resolved that there was an urgent need for the sector to be engaged in policy formulation and implementation of a master plan. The master plan is to include a funding strategy.

The stakeholders also noted that concerted efforts must be made by the public sector to gather relevant data through primary research and that the leather transformation plan should address issues of eco-friendliness, quality and standardisation within the industry.

On finance, the stakeholders said there must be engagements with financial institutions that will guarantee easy access to finance by those in the leather industry. To revive the industry to its pristine state, the stakeholders at the summit recommended that government should initiate a participatory review of the laws and policies that govern activities in the leather industry in order to address emerging stakeholder concerns, trends and impediments to the development of the sector.

They also advised that the National Assembly should collaborate with other stakeholders to strengthen the law and policy regime for the procurement of hides and skins in order to ensure institutional patronage as well as effective quality assurance and control. The stakeholders also recommended that leather producers be trained continuously in order to enhance the quality of leather produced in the country and also urged the Central Bank of Nigeria, CBN, to continually popularise available intervention funds using appropriate mediums and also review eligibility guidelines in order to promote access.