From The Archives
Over a decade after robust summit on skin&hides
Over a decade ago, courtesy of a summit on the 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 was revealed. SIAKA MOMOH, who did a report on the summit, which held at the Transcorp Hilton hotel on September 16 and 17, 2013, in his segment ‘The Realsectornow’, in Vanguard then, went to town to find out how much progress has been made five years on. He spoke to Bello Abba Yakasai, a principal actor in the September 2013 summit and some related federal ministries sources and presents his report as follows.
This story is being republished courtesy Archives-Siaka-Momoh. It is coming as an open question to Government and all other stakeholders. Your reactions are welcome.
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.
These 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 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 the last 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 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 remains 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 global’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.
Informed sources in related federal ministries
Policy somersault
For one of our informed sources in the relevant ministries, who want to be anonymous, the problem is that, a value chain set up during the last regime’s Transformation Agenda (ATA), seems to have gone moribund.
He questioned the quantity and quality of leather we claim to have. Said he: “First and foremost, and realistically, where are the animals f which the leather is expected to come from? From the fictitious data or from the true one? With the prevalent practice of roasting animals with skins and converting those skinned into ‘ponmo’, what type of leather are we talking about?
“Moreover, without reliable traceability of animals slaughtered, how are we sure of what we are talking about empirically? And, without any appreciable efforts at keeping animals in ranches, poor abattoir practices and weak ministries of agriculture in states, how are we sure there are leathers produced here and not that they are from neighbouring countries? I am convinced that whatever is being presented to NEC is just a wish, an intention but not something based on empiricism.”
The integrity of the new policy that is in the pipeline is thus being questioned here.
For him, “The story should rather be to ask how, in the light of these observations, their intentions are going to be translated into reality.”
EEG fraud
Another source lamented: “Lots of missed opportunities, programmes as conduits for fund allocation, Export Expansion Grant (EEG) fraud wherein foreigners got paid for exploiting Nigeria, taking leather away from here, some to their home countries, with the active connivance of (and in collusion with) Nigerians, all running into billions of naira, the refusal of cattle rearers to subject their animals to interventions that would ordinarily make statistics easy to gather, and so on.”
Hear this from another government informed source: “No fewer than 6,000 cows are slaughtered daily in Lagos. Is there any record of leather or leather value chain arising from this; can Lagos State Government provide any statistics to that effect?” he asked rhetorically.
Herdsmen linkage
He added: “Majority of the 6,000 cows slaughtered in Lagos is from Burkina Faso, Mali, and Niger and possibly from as further afield as Mauritania. A meeting recently in Cote d`Ivoire proved how dependent these countries are on Nigeria’s import of cows. In fact, the herdsmen crisis presently witnessed in Nigeria has been unwittingly agreed to by this present government as partly orchestrated by the herdsmen from these countries; which raises serious policy and political questions of “why this upsurge now?” If this agrees with the fact that so much of what is consumed in Nigeria is coming from these countries, what is being done to monitor the herdsmen and their cattle and to regulate their movements and make them subject to our rules?
“Is Nigeria their grazing outpost? Or an extension of their countries (ECOWAS rules or not)? Are they free to cross borders unchecked? If you see herdsmen carrying AK 47 instead of mere stick, shouldn’t that raise its own concerns?”
