30.8 C
Lagos
Friday, May 24, 2024

spot_img

DIVERSIFICATION OF THE ECONOMY:Need For Speedy Healing Of Troubled Nigerian Leather

Yes, it needs speedy healing. We strongly believe we need to take this action as part of the drive for the diversification of Nigeria’s economy.

Few years back, a summit on the Nigerian leather sector by the Leather and Allied Products Manufacturing Association of Nigeria (LAPAN), with support from ENABLE and GEMS, the poor state of this vital industry held. SIAKA MOMOH did a report on the summit, which held at the Transcorp Hilton Hotel on September 16 and 17, 2013. Much later, in 2018, Siaka  spoke to Bello Abba Yakasai, a principal actor in the September 2013 summit and some related federal ministries sources.

We republish his report here and believe it is a useful resource for our drive to diversify our economy, more so when the diversification issue is trending now. We are doing this because from the look of things, the leather issue is still a lingering one.

If Government and other concerned stakeholders think otherwise, they should send in their feedback.

Leather industry issues

The summit raised the following issues in September 2013:

  • Despite its position as the second largest non-oil foreign exchange earner, the leather industry has witnessed a decline over the past decade especially at local production levels due to deficits in technology, finance, market access, product quality, and other challenges.
  • There is a dearth of industry–specific data required for effective planning and institutional control.
  • The quality of leather produced in the country is affected by factors such as the limited institutional control of abattoirs, poor technological input and the absence of a national standardization process.
  • 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.

The summit’s resolutions

 And the summit resolved that:

  • All stakeholders in the sector should be engaged in policy formulation and implementation.
  •  The Master Plan should include a funding strategy.
  • There should be a concerted effort by public sector to gather relevant data through primary research.
  • The Leather Transformation Plan should address issues of eco friendliness, quality and standardization within the Industry.
  •  Enforcement of laws governing the upstream and downstream sector of the industry should be enshrined in the leather master plan.
  • There should be ongoing engagement between the financial institutions and stakeholders within the sector to improve access to finance.

Its recommendations

  • 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 e.g. the Export Expansion Grant (EEG), and the 1942 Hides and Skins law.
  • The National Assembly, working with other stakeholders should 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.
  • National and State Governments as well as International Partners should create outreach programmes, pilot programmes and networks in order to enable more women participate in the sector. There is the need to include institutionalized arrangements for periodic Monitoring and Evaluation of the Master Plan.
  •    It is imperative to interface knowledge and skills within the leather industry by building a strong tripartite linkage between policy planners, training institutions and employers of labour.
  • There is the need to improve the quality of leather goods for domestic and regional markets bearing in mind price and quality that meets the need of the customers.
  • It is important to integrate eco – friendly practices at different stages of the production process in order to ensure sustainability and compliance with national, regional and international policy frameworks.
  • There is the need to enhance the quality of leather products through continuous training and re- training of leather producers.
  •  The CBN should continually popularize available intervention funds using appropriate mediums and also review eligibility guidelines in order to promote access.
  •  LAPAN and other stakeholders should engage the proposed leather transformation committee of the Federal Ministry of Industry, Trade and Investment and also the Ministry’s proposed leather reforms.
  • Coalitions of leather producers should coalesce around common interests in order to agree on and also influence national product standards and other policy outcomes
  • LAPAN and other groups should ensure the effective flow of information among various clusters within the industry such as leather fashion designers, tanneries and other producers of finished leather goods.
  •  LAPAN and other leather stakeholders should get the buy- in of Ministries of Industry, Trade and Investment; as well as Agriculture and Rural Development in the Leather Transformation Master Plan.

Bello Abba Yakasai’s Thoughts

The above were the issues, resolutions and recommendations made at the September 2013 Summit.  What progress have we made five years on? We need to ask this question since it has generally been said that Nigeria is traditionally fond of putting up conferences or summits or seminars of this type whose decisions or recommendations end up gathering dust on shelves. We sought out Bello Abba Yakasai, Cluster Manager, GEM (Growth and Employment) Project (WB-FMITI), Abuja, Nigeria, for his take on this subject. Bello Yakasai spoke in his personal capacity. We also spoke to some informed individuals in related ministries on the subject.

How much of these issues would he say have been resolved to date?

For him, the most important issue is the lack of policy. He explains that at the moment, policy is in a draft form with the consent of four Ministries (including, Trade and investment, Agriculture, Environment and Science and Technology). “Other bodies that participated in the policy draft include GEM project, Nigerian Institute of Leather Science and Technology (NILEST), Raw Materials Research and Development Council (RMRDC)  and various leather associations (LAPAN, Leather Products Manufacturers Association (LEPMASS), NTC etc.).

“Other issues included the establishment of section that deal with leather in all the mentioned ministries. At the moment, the draft is due for presentation at the Executive Council by one of the Ministers from the aforementioned ministries.”

He adds that the Agricultural Road Map has taken into cognisance, leather as one of the major commodities included in the roadmap. “So it is in the Ministry of Industry, Trade and Investment in which leather is included in the trade and industry agenda,” he says. For him, “there is still little change from then as the only change note is the review of EEG (Export Expansion Grant) which includes leather products”.

Progress made in five years

Says he: “From my point of view, not much has changed. There is still the un-curtailed importation of finished leather goods from the Far East and Europe, total export of Nigeria finished leather, little budgetary allocation and the new policy is yet to be presented to the NEC.” 

Yakasai’s take on issues raised then in general

According to him, “All of these issues still remain within the industry with no much of progress. There are still no efforts on data collection beyond what GEMS1 project has done. The quality of leather produced in the country is still affected by factors such as the limited institutional control of abattoirs, poor technological input and the absence of a national standardization process.

“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; efforts to reduce this disparity are made through the review of the EEG – We are still awaiting the implementation of the new EEG.”

His take generally on resolutions

On the resolution that all stakeholders in the sector should  engage in policy formulation and implementation, he says, “This is  in progress”. And on the resolution that   the master plan for the leather industry should include a funding strategy, Yakasai says,   “This is included in the policy in the expected policy.”

On the issue of desired concerted effort by public sector to gather relevant data through primary research, for him, he says “Nothing is done yet.”  On the Leather Transformation Plan addressing issues of eco friendliness, quality, etc, “Nothing is done but it is in the new policy,” he says.

   On enforcement of laws governing the upstream and downstream sector of the industry that should be enshrined in the leather master plan, for him, “There is no master plan yet – but this issue is in the new policy”. 

On the resolution that there should be ongoing engagement between the financial institutions and stakeholders within the sector to improve access to finance, he says: “Little has been achieved. But the achievement is not as a result of coordinated plan but the efforts of some stakeholder association and individual industries. Please note that regardless, this is now a mandate amongst the mandates of NIRSAL.”

The National Assembly has done nothing yet on strengthening 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, he says. And on the creation of outreach programmes, etc, in order to enable more women participate in the sector, GEMS 1 and GEM projects funded by DFID and World Bank are the only organization that made some efforts in this regard, he says. 

 Commenting on the recommendation that it is imperative to interface knowledge and skills  within the leather industry by building a strong tripartite linkage between policy planners, training institutions and employees of labour, “No achievement” has been made in this respect, “says Bello Yakasai. 

“There is a bit of private sector performance improvement with the fashion houses collaborating with shoe makers to improve quality and aesthetics, ” says he on the need to improve the quality of leather goods for domestic and regional markets bearing in mind price and quality that meets the need of the customers.

 “Not much has been achieved” regarding integrating of eco-friendly practices at different stages of production, etc. And as regards capacity building, “the only training institute in Zaria did not record any appreciable progress in this regards”. 

 Not much has changed regarding funding intervention from CBN, Yakasai says.

His take on the recommendation that LAPAN and other stakeholders should engage the proposed leather transformation committee of the Federal Ministry of Industry, Trade and Investment and also the Ministry’s proposed leather reforms is that “This is not relevant as the transformation committee disappeared with the previous government”. And on the recommendation that coalitions of leather producers should coalesce  around common interests in order to agree on and also influence national product standards and other policy outcomes,  “This has not been  achieved as there is still divergence between the leather producers industry association and those of finished leather goods”.

 “Nothing has been achieved” regarding the recommendation that LAPAN and other groups should ensure the effective flow of information among various clusters within the industry such as leather fashion designers, tanneries and other producers of finished leather goods. 

 It is however good news on the following: LAPAN  and other leather stakeholders should get the buy-in of both Ministries of Industry, Trade and Investment; as well as Agriculture and Rural Development in the Leather Transformation Master Plan. Says Bello Yakasai:  “This has been achieved as the two have been including leather in all their annual plans since then.”

Size of the leather industry in Nigeria

  • Non-oil is biggest foreign exchange earner for Nigeria:
    • Export figure of finished leather averages $680m (N108b).  Peaks in 2010 to $3billion  (N486b) – Comrade
    • Estimate value of finished leather goods annual turnover over a billion Dollars (N160b) with potential to grow multiple folds and faster – GEMS
    • Number of small ruminant skin processed in Nigeria is estimated to be about 45 million pieces. (about 30m skin from Nigerian slaughters and about 15m imported informally )– GEMS
    • Hides largely used as ponmo value at about N60b 
    • Estimated employment in the sector over 1million Nigerians and growing – GEMS
    • Shoe import from China alone is estimated to be in excess of 30m pairs annually – worth over N90b – sector association
    • Over 36 formal tanneries exist in Nigeria, with about 30 located in Kano
    • About 6 major tanneries account for more than 80% of the export value – others are either dormant or operating way below capacity
    • Nigeria accounts for about 3% of world production of skin-based leather – probably the largest exporter of light leather in the world
    •  Injection of Export Expansion Grant (EEG) boosts exports – but its administration and management remain questionable.
    • Nigerian leather is among the best in the fashion world
    • However, marketing Nigerian leather may face threat from ILO, Environmental, animal right and other globe’s ethical standards (production/trade)

 This is where we are, five years after that robust summit that helped to reveal the poor state of health of Nigeria’s leather industry. Going by Bello Abba Yakasai’s assessment, not much has changed; there is still the un-curtailed importation of finished leather goods from the Far East and Europe, total export of Nigeria finished leather, little budgetary allocation and the new policy is yet to be presented to the NEC. 

Call for Feedback

Eleven years on, where are we? Your guess is as good as mine. If the stakeholders in the leather industry space have a contrary opinion, they should let us know. We are thirsting for your response. Reactions on this issue are required from all. Please join the debate.

NEXT WEEK: Nigeria needs 10-20-year plan to meet its local shoe demand

Related Articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Stay Connected

0FansLike
0FollowersFollow
0SubscribersSubscribe
- Advertisement -spot_img

Latest Articles