Made in Nigeria brand awaits government lifeline

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Aba leather industry thrives in chaos, hampered by government’s failure to provide the right environment, writes Odinaka Anudu

In 2002, five Egyptians traveled to Aba to study the designs of local shoe and trunk makers. After spending three days in the city, one of the visitors said, “If we have this kind of potential in our country, we will conquer the world with leather.

Twenty years after this statement was allegedly made, the Aba leather industry is still thriving in chaos. Its production represents 0.13% of world production and the industry has not produced enough foreign exchange to support the country in times of dollar crisis.

The Aba Leather Industry is made up of shoe, bag and trunk producers, occupying about 14 clusters across the market, which include: Powerline, Imo Avenue, Bakassi, Aba North Shoe Plaza, Omemma Traders and Workers, ATE Bag , Nwogu Avenue, and Ochendo Industrial Market (comprising input suppliers), among others.

The potential is huge

The most popular of the three areas of leather production is the footwear section. According to studies conducted in Aba, one million pairs of leather shoes are produced every week. Estimates put the size of the Aba footwear industry at N144 billion, employing over 100,000 people.

However, the secretary of the Association of Leather and Allied Industrialists of Nigeria, Mr. Ken Anyanwu, estimates that there are over 200,000 players and the industry is three times larger than estimated.

No matter how one esteems it, the Aba leather industry, whether it’s shoes or bags, provides jobs, creates wealth, and generates taxes for the government.

“It’s a very big industry. Most of the time we have problems with data, but there are over 200,000 people involved in leather production here. This is not something any government can afford to ignore,” Anyanwu said. The punch.

The quality is improving

One of the biggest challenges facing the Aba leather industry is the poor quality of production. Many Nigerians often complain about the lack of durability of locally made shoes or bags, resulting in low footfall of the products.

But major industry players said that was no longer the case as some players with the war chest had imported machines that could improve the quality of products produced by Aba.

The Managing Director of Mega Colclick Shoe Manufacturing Company, Mr. Isaac Collins Ogba, explained that Aba’s products are gaining popularity in several African countries due to improved quality and design.

“It is no longer true that our products are of poor quality. Those days are over and we are in a situation where customers from different parts of Africa buy our products because of their quality and design,” he said.

He further said that products made in Nigeria are improving every day, urging citizens to patronize them to support local manufacturers.

Another leather player in Aba, Charles Ijoma, said the issue of quality had a lot to do with the prices a customer was willing to pay.

“If you pay 10,000 naira for a pair of shoes, are you going to compare it to someone who wants a pair for 2,000 naira?” He asked.

“So what you pay determines the quality we deliver to you,” he noted.

The Government’s Failing Shoemakers

The Aba leather industry is waiting for a lifeline, which has not come. The most recent financial support provided by the federal government to the Aba leather industry dates back to 2011 through the Bank of Industry.

Leather Products Manufacturers Association President Mazi Okechukwu Williams said The punch that only 21 members of the association benefited from the N300,000 money from the BOI in 2011. He wondered what anyone could achieve with that amount of money against competitors from China, India and the European Union.

For his part, Anyanwu said the 300,000 naira provided by the development finance bank only scratches the surface, as setting up a mini shoe factory costs between $25,000 or more. He noted that there was a major challenge with the structure of the funds provided by the development finance institution.

“Once they give you the money, they start asking for it a year later. This is not the way to finance the manufacturing sector, which requires patient financing mechanisms,” Anyanwu said.

But the BOI, for its part, said that despite its intention to increase disbursements to artisans in the Aba cluster, difficulties in repaying beneficiaries’ loans has led to high default rates. She noted, however, that the challenge was being met.

He further said that he was working with other financial institutions and development agencies to review the features of his products and address previous challenges.

Nevertheless, the government’s inability to fund this burgeoning industry has led to several other issues that have held the industry back.

One of the areas where the Aba leather cluster has retreated is mechanization. Until today, the majority of tools used in the production of shoes, bags or trunks in the region are rudimentary and require a lot of human effort to operate.

These tools delay production and reduce the productivity of leather players.

“Well, there’s no money to buy the kind of tools that can keep us competitive,” Anyanwu said.

“This is the biggest challenge we face in the cluster and I want the government to understand this fact,” he noted.

In Aba, producing a pair of shoes takes between one and two weeks, but doing the same in China takes two to three days for obvious reasons. A sophisticated shoe sole machine seen on Alibaba.com costs $2,999. It can perform the function of shoe scrubbing in minutes, but Aba cobblers manage to do it with their bare hands or using gum and a hammer.

“It takes a lot of time and reduces the output we produce,” said Adaku Veronica, a bag maker in the Bakassi cluster.

“If you have this number of people in the leather cluster in India, I am sure they will be able to produce at least 20 million pairs of shoes every week. But it shows you that the government is failing in its responsibility” , she added.

Outside of the federal government, the general feeling in Aba is that the state government is not doing enough in terms of the road network.

The Vice President of the Nigerian Bar Association, Aba Branch, Mr. Victor Onweremmadu said in 2021, “No one can visit Ariaria like a normal person anymore. You can no longer visit the Alaoji Parts Market to buy parts if you have a problem. You can no longer visit the building materials market in Uratta. If you drive on Faulks Road which they told us took billions of naira to fix you will think you are having a nightmare. Port Harcourt Road, those who live there no longer live as human beings.

Similarly, Aba leather industry players said The punch that the state of the cluster’s markets was something to worry about.

Several lines in Aba are disorganized and the buildings do not have an international opening.

LEPMAS’ Okechukwu stressed the need to redevelop markets in line with global standards. He called on the Abia State government to relocate and renovate the Aba markets to have an atmosphere conducive to leather production.

A cobbler, Daniel Uka, compared Aba to what he had seen in Ethiopia, saying the town’s local industry was nothing special.

Leather rarity

One of the challenges facing the Aba leather industry is the scarcity of hides and skins. Nigeria exports hides, goats and cowhides to Europe, but Aba leather makers import them from China and various parts of Africa. Between January and March 2022, Nigerian tanneries exported raw hides, skins and furs worth N4.838 billion. In the corresponding periods of 2020 and 2021, they exported these products worth N5.534 billion and N14.295 billion respectively.

As much as the export generates revenue for tanneries, it deprives Aba shoemakers of the quality raw materials needed to produce finished shoes, bags and trunks, players said.

In a recent interview with one of our correspondents, the Made-in-Aba project coordinator, Mr. Chinatu Nwagbara, said that the tanneries in Kano and Kaduna would sell animal skins at very high prices for cobblers .

“They sell in the international market to make a profit, but we cobblers move to China, Cameroon and other parts of the world in search of raw materials. Most of the time we get low quality raw materials,” he noted.

But a Kano tannery worker, Idris Kuta, said the players’ decision was usually based on economic realities.

“People go where they will make money, especially with the current scarcity of foreign exchange.”

Global map

The largest leather producers in 2020 were China (6.170 billion), Brazil (2.360 billion) and Russia (1.652 billion), according to UN Comtrade – a repository of official international trade statistics. The others were India (1.560 billion) and Italy (1.521 billion).

Globally, the top footwear exporters in 2020 were China ($8.35 billion), Italy ($5.84 billion), Vietnam ($5.67 billion), Germany ($3.22 billion) and Indonesia ($1.81 billion), according to the Economic Complexity Observatory, which compiles trade data.

The Aba footwear industry’s share of the $271.82 billion global industry is 0.128%, which is considered infinitesimal.

Go forward

As a game changer, Ike Ibeabuchi, a market analyst, urged players to be more open-minded and change their business models.

“How many of them are in the formal sector? You will be surprised that many of them are not registered with the Corporate Affairs Commission. Some do not have accounts or a business plan. These things have to start changing,” he advised.

But major players blamed governments at different levels, urging them to wake up to support the Aba leather industry to boost foreign exchange earnings and employment.

According to Okechukwu of LEPMAS, BOI should return to Aba and provide substantial funds to the leather industry to achieve positive results.

He also urged Nigerians to consume less or no ‘ponmo’ which is a vital raw material, pointing out that it was wrong for citizens to consume their own shoes.

For his part, Anyanwu noted that it is high time for Nigerian banks to get involved in financing the Aba leather industry.

He urged the Central Bank of Nigeria to lead the pack as it has done under the Anchor Borrowers scheme.

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