The Untapped Potential Of The Leather Industry

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The Problem Statement

For many years, Nigeria leather industry was a growing industry, earning valuable foreign exchange for the local economy, alongside cocoa plantation in the south, groundnut and rich cotton in the north until the 1970s when the country shifted focus from viable industries to a single stream of black gold, making it an oil-dependent economy. Rapid drops in global oil prices in 2015 exposed the economic vulnerability of Nigeria’s oil industry. Nigeria’s economy is now largely dependent on oil. The economy grew by 2.7% in 2015, significantly below its growth of 6.3% in 2014. Since the fall in oil prices in mid-2014, growth has been on a downward spiral and there is a need for diversification in the economy. Recent statistics indicated that growth in the leather sector is associated with its level of industrialization. The Nigerian leather sector initially characterized by exporting semi-processed leather now focuses on value addition to enhance the sector’s performance. Industry performance challenges including access to and cost of capital, availability of in-country skills, inputs, and machinery are addressed through recommended policy strategies. This policy, therefore, analyses the Nigerian leather sector and establishes the framework with the aim of making it globally competitive. Hence, the overall goal of the policy is to compliment other government efforts in order to enhance the industry’s contribution to the economy. The policy took into consideration the existing sector resources and governing structure to ensure that a conducive business environment is created for all value chain participants. It is hoped that the implementation of this policy will make the Nigeria leather sector more competitive in the global market.

 

The Policy Solution

In simplifying the policy position of the Ministry of Science and Technology, the Ministry of Science and Technology and NILEST(Nigeria Institute of Leather and Science technology) is making frantic efforts to reverse the ugly trend of huge capital flight by putting together, first-ever stand-alone national leather policy in Nigeria. The Federal Executive Council (FEC) has approved the Nigerian leather policy as part of its developmental plan which is aimed to improve the Nigerian leather industry in order to contribute to the drive for improving the economy in the country’s leather sector which was initiated on October 31, 2018, when the economy went into recession in late 2015. Inflation continued to be in double digits in the last few years topping to 15.98% in October 2017. The recent lower growth rate of the Nigerian economy has resulted in a renewed drive towards economic diversification, private sector growth, and job creation. These principles provide additional strategies to evaluate the impact of the policy. In view of this, the specific aims of this policy include:

  • Establishment of suitable conditions for sustainable national development through the provision of technical,  human, and financial resources.
  • Regulation of the Nigerian leather industry and creating principles of alignment in livestock rearing,  technology application  (processing), and marketing.
  • Development of a  robust and vibrant leather industry that will support high capacity utilization of resources for the production of sufficient and premium quality hides and skins, finished leather, and Finished Leather Products  (FLPs).
  • Creation of an enabling environment to foster Public-Private Partnership (PPP) investment.
  • Development of procedures/standards in the production process to ensure compliance with environmental and social best practices.
  • Enhancement resource optimization and improved supply chain management along the Nigerian leather value chain.
  • Development of technology  transfer capabilities, and stimulation of private sector investment in the sector
  • Promotion of continuous research and development, and encouragement of synergies between research institutes and the leather industry.

Now, these are some of the benefits if we harness the leather we have in Nigeria:

  • We will be creating a lot of jobs and wealth because of the small-scale enterprises that will spring up.
  • We would make more gains instead of exporting raw leather or semi-finished products.
  • We want to prepare our nation so that we can process our leather and use leather in the production of finished leather products.
  • The manpower training will serve as a boost to unlocking the enormous potential existing in the leather sector for the benefit of this country.

NIGAC Constructive Position/Take

This policy should be communicated to all stakeholders involved in executing, reviewing, and updating the policy on regular basis to ensure they comply with federal and state laws and the need of the ministry. The Federal government should inaugurate a committee on leather products policy to ensure effective implementation of the policy and the committee is expected to coordinate and monitor the optimal implementation of the policy in conjunction with the relevant stakeholders to provide feedback and submit a report to the Ministry from time to time.  This is drawn out of the need to support the national economic recovery efforts, create jobs for the teeming Nigerians, maximize wealth for both small and large-scale investors in the leather industry, and substitute imports by enhancing the performance of Nigerian made Finished Leather Products (FLPs). The policy is also designed to fill the vacuum of decades without effective guidelines that respond to the changing trends of the industry and the dynamism of the Nigerian economy. Implementing the action points in the policy therein will hasten the growth of the industry and improve  Nigeria’s global competitiveness. This is in line, with the cravings of the Federal  Government to create employment,  increase foreign exchange earnings,  enhance internal revenue, reduce poverty across the country and enhance the use of technology to increase the productivity of the sector and of course attract more investors to Nigeria.

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