By KOLA KING
The global trade value of the leather and leather products industry is estimated at USD 407.92 billion per year as of 2021. Also, leather goods are ranked among the 25 most traded commodities in the world, according to UNIDO. Yet Nigeria is not a key player in the production of hide-based leather despite the fact that it produces skins and hides in excess of 45 million pieces annually, according to industry reports. The value of export from Nigeria (2010 to date) ranges from USD 600- USD 800 million with over 40 million goat and sheep skins crossing the Nigerian borders annually. Leather produced was destined for the production of footwear, clothing, car leather upholstery, and other leather goods.
According to Statista, in 2020, 30.3 percent of the global value of exported leather goods was realized by China, making the country the leading exporter of leather goods in the world. Italy and France represented the traditional European tanning industry, with respectively 17.8 percent and 14.8 percent of the global export value for this product. Other Asian countries, such as Vietnam and India also had a share of the global export value: Vietnam with 6.4 percent and India with 2.6 percent of the worldwide export value. The value of Chinese exports of leather shoes decreased from 13.75 billion U.S dollars in 2014 to 9.3 billion U.S.U.S. dollars in 2017.
Here some quantity of hides is produced and processed into the leather by local tanneries for supply to Finished Leather Products (FLPs). Besides, the amount of skin available for tanning is reduced significantly due to Nigeria’s feeding culture that encourages singeing of skins and hides for food. But then leather has alternated first and second position as a non-oil commodity foreign exchange earner.
Nigeria’s widely acclaimed commercial hub, Kano plays host to a large leather industry. The tannery factories in Kano are always scurrying with activities as men act on hides and an array of skins for brands from around the world. These tannery factories are the oldest in Nigeria and also the biggest suppliers of local leather.
Still, Nigeria imports about $40 million worth of hides and skins from West, North and East Africa. In terms of footwear business, Nigeria owns only an estimated 10 percent share of the domestic market while its Chinese competitor boasts of a 90 percent share. Estimated import of Finished Leather Products is about USD 300 million consisting of over 40 million shoes and other leather goods imported from Asia, Europe and Americas.
Generally, the leather and leather products industry play a prominent role in the world’s economy. UNIDO (2011) estimated that world leather export is dominated by developing countries while developed countries dominate export of Finished Leather Products. Global estimate of leather production is about 23 billion square foot annually. Asia accounts for about 57 percent of heavy leather production and 44 percent of light leather production. Europe accounts for 17 percent and 24 percent of global heavy leather and light leather production, respectively while Africa contributes the least accounting for one per cent of heavy leather and 4 percent of light leather production.
According to the Livestock Census (2011), the national livestock population was estimated to comprise 19.5 million cattle, 72.5 million goats, 41.3 million sheep, 7.1 million pigs and 280,000 camels. The country is estimated to have 145 million flocks of chickens, 11.6 million ducks, 1.2 million turkeys and 974,499 donkeys. Despite this huge potential, the livestock industry has gone through various challenges which include lack of effective public health ordinance for abattoir operations, skin quality standards/grading, appropriate transportation system and relevant infrastructural facilities. This is further aggravated by poor access to and cost of capital, and poor local patronage of locally made FLPs among others.
The new national leather and leather products policy aims to support the national economic recovery efforts, create jobs for the teeming youths, maximize wealth for both small and large-scale investors in the leather industry, and substitute import by enhancing the performance of local Finished Leather Products. This new policy will hasten the growth of the industry and improve Nigeria’s global competitiveness. By this, the federal government hopes to increase foreign exchange earnings, enhance internal revenue, reduce poverty and enhance the use of technology to increase productivity of the sector.
There are governance issues which militate against the development of the leather industry. For example, the Acts regulating the leather sector are obsolete. The 1962 Northern Nigeria Hides and Skins (Export Duty) Act is still in use for hides and skins related legal and policy issues. Other Acts and/or By laws have largely been within the ambit of respective MDAs. However, there exists chapters in the livestock regulatory/development policy and the Nigerian trade policies to support production, value-addition and provide inclusion into economic indices. As it is, Agricultural Transformation Agenda (ATA) and other related policies of the Federal Ministry of Agriculture and Rural Development recognize meat, milk and leather derivable from cattle, sheep and goats as the drivers of the value chain.
At the moment, Nigeria slaughters nearly 7 million cattle annually. Despite this large number, the hides are not available for tanning because it is considered a delicacy popularly known as ‘ponmo’ despite its non-nutritive value. Consequently, consumption of ponmo competes with the demand for hides and skins for tanning. Given the higher prices that hides attract in the food market (which can be as much as five times the price paid by tanneries), there is little incentive for producers to sell their hides to the leather industry.
Besides more people are employed in the ponmo trade than in the tanneries. The leather sector is faced with many challenges caused principally by the lack of a sector policy and other business-related issues. These include among others, poor animal husbandry practices and slaughtering techniques, poor and inadequate animal health care services, non-compliance with certification requirements for animal products (hides skins), and improper flaying and preservation of skins continue to pose challenges to the optimal supply of skins that are suitable for the modern leather industry. Also, there is currently no standard mechanism for grading skins at the slaughter places.
There are currently about 18 functional tanneries (2017), which is a significant decrease from the approximately 40 tanneries that were operational in 2000. The tanneries that are currently in operation have a total installed capacity which allows for processing of over 250,000 skins per day up to wet blue level. Reports by industrial tanneries indicate that over 43 million skins are purchased annually while over 9300 direct jobs are generated. The Nigerian FLP sub-sector has not been able to develop an industry geared towards export. However, the sub-sector has been exporting products to ECOWAS countries.
To this end, the new national policy on leather products is geared towards a sustainable funding structure through the government, organized private sector, and development financing. Thus provision will be made for 3-5 years tax holiday for large-scale investors in FLPs manufacturing. Investors will be encouraged to establish required chemical plants and other critical raw materials for leather manufacture. Also, the inclusion of FLP Small and Medium-scale investors in government subsidy programmes; discouraging the importation of FLPs; provision of a 3-5 years tax exemption on leather sold to FLPs industries.
The new leather policy will ensure adherence to standards and marketing of quality hides and skins, leather/leather products, chemicals and auxiliaries by registered entities. This will develop and enforce standards for raw materials especially hides and skin, leather works accessories, regulating import/export market activities in line with the national economic development objectives. Also, encourage formalization of micro, small and medium businesses within the industry for improved performance. At the same time, to launch ‘Buy Made in Nigeria’ promotional programmes towards import substitution. Again, the policy will discourage import of FLPs through articulated measures that will give advantage to locally manufactured products. Furthermore, it will also discourage importation of used leather products. Moreover, efforts will be made to discourage the consumption of raw hides and skins (ponmo) by designing incentives for producers and processors.
More importantly, the policy will establish and strengthen institutional structures for effective coordination and management of leather and leather products in Nigeria. Thus a Leather Council will be established that will oversee and coordinate the implementation of the policies and activities of the sector. There will also be linkages between federal, state, and local programmes and activities.
The leather industry is heavily reliant on inherited advantages (skins and low-cost labour) rather than more sophisticated factors of production such as cutting-edge machinery or skilled workers. Relative to other leather-producing countries, Nigeria is endowed with a high density of livestock. However, the skin sector is characterized by a high degree of fragmentation, poor branding, packaging, and distribution of FLPs.
Indeed the art of leatherwork has a long history in Nigeria and the world in general. It can be traced back to the beginning of civilization. Leather has been in use since the existence of early man and was the second form of clothing in the history of man’s effort towards concealing and decorating various parts of the body, and shelter. During the Trans-Saharan trade period, the Arabs traded in hides and skins from the northern part of Nigeria, transformed them for local use, and exported the same to Europe. It is common knowledge that the world-famous Morocco grain leather was actually made with red goatskins from northern Nigeria.