Olamide Akinolugbade
The clamour to make a significant shift from Nigeria’s current state of oil dependency has gone on for a while now. Industry giants, astute economists, and many thought leaders have shared disheartening analyses about the risks that Nigeria faces if the economy continues to rely on oil revenue alone. They have gone on to suggest a plethora of viable resources that the country should begin to explore; however, there is one unexplored yet potentially lucrative resource that is often left out: Leather.
The Economic Contribution and Potential
The leather industry in Nigeria has enormous potential. It has evolved over the years and contributed immensely to the Nigerian economy despite little to no contribution from the government. Data from the Nigerian Economic Summit Group (NESG) Policy Brief for October 2017 shows that the leather industry makes up about 24% of the agricultural sector’s contribution to Nigeria’s GDP; it is also one of the more significant employers of labour in the country, with over 750,000 workers in the leather processing sector and about 500,000 workers in the finished leather goods sector. Thousands of small businesses operate and create employment opportunities in both the finished leather goods and the leather processing sector. The Aba Leather sub-sector, for instance, employs tens of thousands, with many specializing in different stages, such as designing, patterning, cutting, skiving, stitching, peeling, and finishing.
Undoubtedly, a little more focus on this industry by the government, will set Nigeria up for a new economic trajectory and unleash a new cash cow for the nation. A study carried out by the Nigerian Economic Summit Group (NESG) projected that the Nigerian Leather Industry has the potential to generate over 1 billion dollars by 2025. Affirming this, Vice President Yemi Osinbajo recently opined at an event that by optimizing the leather value chain, the sector has the capacity to provide employment opportunities, improve Nigeria’s foreign exchange earnings, and boost economic growth.
The International Appeal
Away from the local scenes, Nigeria has thrived tremendously in the export market with its processed leather, despite minimal support from the government — 90% of produce from the industrial sector and 10% from the traditional/artisanal sector are set up for exportation. Ranking amongst the highest quality globally, Nigeria has been a consistent supplier of leather to European and Asian markets. One such example is the unique Red Sokoto goatskin leather — found in Nigeria — which is recognised for its superior quality across the world. This has spurred the success of a burgeoning industry — it is no wonder that leading finished leather brands like Toss Afrique, Morin O, FemiHandbags, Winston Leathers and many more have built successful businesses within the leather industry. Not only have they provided quality products for Africans by Africans, but they have also continued to extend their reach to compete on a global scale and give greater visibility to the Nigerian leather industry.
Currently, the sector is adjudged to be the second major foreign exchange earner after oil — the total export value of tanned skins amounted to about $240 million in 2015, according to the Nigerian Economic Summit Group (NESG). This highlights the strategic importance of the industry as a viable foreign exchange earner. The leather industry, if well explored, will diversify the government revenue base and help cushion the effects of the fluctuation in the global oil market as well as create jobs for the teeming youths in Nigeria.
Its Challenges
Despite the recorded success and potential, the leather sector in Nigeria is still largely unexplored, misunderstood, and underdeveloped. One notable factor behind the industry’s slow growth is the disintegration of the local value chain. The problems associated with sourcing leather locally have become a dire song in the mouths of many leather industry players, as a lot of the leather produced locally — at tanneries in Kano and Kaduna — is exported to foreign countries. It is tough to comprehend that Nigeria still loses over $500 million in capital annually to the importation of leather products.
This is not helped by the fact that much of the populace would rather purchase from foreign leather brands over local ones because of perceived higher quality. Statistics from a Stears business report show that if you ask 100 Nigerians to choose between Nigerian or international brands, 92 will choose the foreign brand, while eight would be undecided. Ironically, in a blind brand experiment conducted amongst Nigerians, 98% claimed that they could differentiate between foreign shoes and Nigerian shoes, however, when the shoes were provided to them, only 32% could make a distinction.
Nevertheless, industry players have continued to survive – and in some cases, even thrive. “We have continued to grow regardless of the poor visibility and limited government interventions experienced by the Nigerian leather industry thus far. Yet, given the focus of the government on economic diversification and support for the implementation of agriculture-led industrialization, we urge the government to explore the inherent opportunities in the leather industry by promoting partnership, providing incentives, and enhancing technology and human capital development in the industry,” Femi Olayebi, Founder and Creative Director of FemiHandbags said at the Lagos Leather Fair – an annual retail showcase created in 2017 to create awareness of the potential value of the leather industry.
What needs to be done
We are beginning to see some action from active members of the government channelled towards the improvement of the industry. In 2021, the National Leather and Leather Products Policy Implementation Plan were launched. This plan is designed to address the specific challenges and shortcomings of the leather sector with pragmatic strategies to permanently resolve these issues for optimal productivity.
The Vice President, Prof. Yemi Osinbajo, stated during the launch that “with the right planning and strategy, optimizing the value chain, these goals could become reality soon.” He added that “relevant Government Ministries, Departments and Agencies (MDAs), Non-Governmental Organisations (NGOs), and the organized private sector are assigned specific responsibilities for [the plan’s] various objectives and strategies”. Unlike many projects in Nigeria, we hope this becomes an actualized goal.
Beyond the government, industry players will ideally need to forge alliances with each other and provide the necessary support to each other where possible. Such is the case with the Lagos Leather Fair (LLF). Over the past 5 years, this highly revered and attended event has created massive opportunities and created awareness for leather industry players. To commemorate its 5th anniversary, LLF is set to host another leather fair this year — the two-day event will open its doors to leather enthusiasts, producers, manufacturers, lifestyle lovers, creatives, and shoppers, all under one roof.
This year’s Lagos Leather Fair is set to hold on the 11th and the 12th of June at the Balmoral Convention Center, Victoria Island, and as with previous editions, this year’s edition (LLF5) is set to further change the narrative around homegrown leather products and services, by creating visibility for various industry stakeholders, and providing access to opportunities for MSMEs across Nigeria and the wider continent. LLF5 will feature a series of masterclasses and conversations with a broad range of speakers across multiple industries; it will also feature interactive creative workspaces; a series of catwalk shows; and more. One thing is clear: Lagos Leather Fair 2022 certainly holds a lot to look forward to.
