The high levels of innovation and Foreign Direct Investments in the Ethiopian shoe industry clearly show the missing link in Nigeria’s footwear and leather sub-sector.
Just between October and December 2016, Ethiopia attracted over $500 million in FDI to its shoe and leather industry. About 124 investors willing to invest $3.5 billion have since indicated interest to swell the export-oriented shoe market, according to the Ethiopian Investment Commission (EIC).
“Ethiopia has invested in the shoe space. But this is still lacking in Nigeria. Aba, for instance, has not done well in branding its products. I believe someone should step in and formalise that space,” said Babajide Ipaye, founder of Project Keexs, Nigeria’s only firm manufacturing sneakers and smart shoes.
Since the year 2000, Ethiopia has emerged as a shoe-making hub for the world, as it has a well-organised and formalised leather industry, leading to the attraction of tens of Chinese and Turkish firms such as Huajian and My Shoes.
Ethiopia’s comparative advantage in shoes stems from a combination of cheap labour and electricity as well as a formal structure which shoe makers in Aba, Kano and Lagos, three biggest hubs in Nigeria lack.
Nigeria and Ethiopia have things in common. Ethiopia is home to 56 million heads of cattle, which provide ready raw materials to shoe makers. Similarly, Nigeria has 131 million heads of cattle, goats and sheep, according to the Federal Ministry of Agriculture (2011 figures).
As Ethiopia feeds its shoe industry with local animal skins, Nigerian tanneries in Kano and Kaduna are exporting same, earning dollars from them, even when local industries are in dire need of same. The impact of this is that shoe makers in Nigeria are still forced to import leather and other raw materials from China and West Africa.
“Once the tanneries are through with production, they export the entire finished leather to the detriment of local leather works manufacturers. This is affecting the finished leather sector in Lagos, Onitsha and especially the Aba cluster,” Ken Anyanwu, national secretary, Association of Leather and Allied Industrialists of Nigeria (ALAIN) told BusinessDay.
According to Ipaye, there is still no consistency in the supply of raw materials for the shoe industry in Nigeria, owing to poor organisation of the sub-sector.
Ethiopia exported $33.7 million worth of footwear products, mainly to the United States in 2015, one million lower than the preceding year. Through the African Growth and Opportunity Act (AGOA), the US-Africa trade law that allows duty-free and quota-free access into the US market, Ethiopian shoe exports jumped from $630,000 to nearly $7m between 2011 and 2012, a more than tenfold increase, according to statistics from USAID.
On the other hand, Nigeria’s main entire export to the US in 2015 was $2.6 million, mainly made up of foods.
One million pairs of shoes are churned out each week by about 70,000 manufacturers in Aba, according to figures obtained from heads of various groups in Ariaria Market.
Ariaria Market in Aba is West Africa’s shoe hub, with N96 billion industry potential, having nine clusters, including Imo Avenue, Shoe Plaza, Bakassi (Umueghilegbu) Industrial Market, Old Site, Bag, Belt, Trunk Box and Powerline Clusters.
Nigeria was a shoe-making hub in the 1980s and 1990s with giant firms such as Bata Shoes and Lenards Shoes. ‘Cortina’ produced by Bata and Lenards was popular and compulsory for students of the era. Bata produced 10.4 million shoes in 1980, creating jobs for many Nigerians.
However, it was faced with challenges such as poor innovation, a crippling leather market and managerial problems, which prompted the company to start importation at the twilight of its operations.
Aba is also faced with infrastructure challenges, particularly poor road infrastructure and epileptic power supply.
“Our big challenge is market access. Market is a force and when it begins to develop, it goes with everything you are doing. Even the standard and quality of our products go with the market,” Okechukwu Williams, president of the Leather Producers Manufacturers Association of Abia State (LEPMAAS) said in a recent interview.
ODINAKA ANUDU
