Government mulls incentives to boost investment in leather sector
The Federal Government has announced plans to partner stakeholders in the leather industry to come up with policies aimed at adding value to the entire value chain of Nigeria’s leather, noting that steps are underway to structure incentives to attract investment opportunities into the sector.
The Director, Industrial Sector Department, Federal Ministry of Industry, Trade and Investment (FMITI), Adewale Bakare, said leather is one commodity Nigeria has competitive advantage of producing, but stressed that processing leather into finished products is still a challenge for the Nigerian economy.
Bakare during the Lagos leather fair tagged “Changing the narrative within the Nigerian Leather Industry” explained that the missing link is to intensify and increase investments into finished leather products and the need to improve on technology and skills to make finished leather goods.
“These are some of the things the federal government is looking at in the entire value chain of the industry that is going to be embedded in the policy framework in the coming week to attract investment into the leather industry,” he said.
Meanwhile, the Bank of Industry (BoI) has restated its commitment to act as a key enabler to drive the federal government’s Nigeria Industrial Revolution Plan (NIRP) and Economic Recovery Growth Plan (ERGP) initiatives by lending at concessionary rates with longer tenor to support the nation’s quest for economic development and diversification.
The Executive Director, BOI, Waheed Olagunju, who was represented by the Bank’s Regional Manager, South South, Balarabe Hassan, said the Development Finance Institution ( DFI) has created some products designed to encourage local production, stressing that capacity building, finance, identification of the right technology and creativity are vital for the nation’s leather industry going forward.
He added that key players in the industry must begin to reinvent the wheel through innovation and technology, maintaining that the bank had specifically structured credits to Aba and Kano clusters to drive leather production in the country.
“Enterprises should be able to access funding easily from all sources, but we believe a lot of artisans require handholding and finance, but before you can do this, we have to build capacities for them to do a lot. This is what we have started and I can tell you we have existing relationships with the Aba artisanal clusters,” he said.
A market developer, Market Development Programme in the Niger Delta, Abimbola Adeyinka, added that there is a lot of demand for domestically produced leather products, but emphasised on the need for local producers to produce to meet the quality and desire of the Nigerian consumer.
“This is where that competitive collaboration needs to come into play. Nigerian leather prooducts will remain expensive until they can maximise efficiency and the scale of production. Finished leather goods’ cost will drop as the scale increases. Nigeria produces a lot of leather, but it is not about the leather but about finished leather. There is a lot of value addition that goes into leather production”.
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