According to Business Day, a newspaper, the Aba leather industry has about 80,000 players operating in different clusters across the town. These players engage in the production of shoes, bags and trunk boxes, producing 48 million pairs of shoes annually at an average price of 2500 naira which gives it a market value of $333 million (120 billion naira). Its global competitors include China which produces 12.6 billion pairs of leather shoes and exports shoes and leather products worth $9.1 billion, and Vietnam which produces 760 million pairs annually with an export value of $6 billion. Indonesia, in third place, produces 660 million pairs with $2.6 billion in shoes exports while Italy produces 205 million shoes with export value of billions of dollars too.
There are different factors responsible for why the Aba shoe industry is not globally competitive. They include:
- Unavailability of export data on footwear
- Players in the leather industry not utilizing the internet in marketing and distribution of products
- High lending rate by Nigerian banks which has made manufacturing not globally competitive
- Unavailability of the manufacturers to get animal skins locally
- Utilization of crude machines in production.
In May 2008, The Common Facility Centre was established in Aba as a partnership between the United Nations Industrial Development Organization(UNIDO), and the Federal Government of Nigeria, to aid workers in the Leather and Garment sector to exploit external economies through collective effort and sharing common facilities for enhanced processing of their products, and to serve as a Centre of Excellence for capacity building and provision of cutting edge technology for competitiveness enhancement. About eleven years after it was established, the majority of the Aba shoemakers have refused to utilize the facility as they don’t understand the purpose behind its set up.
The following solutions can solve this friction:
– Upgrade of Facilities and Provision of Manpower for the Common Facility Centre: Considering the fact that the centre hasn’t been utilized in a long time, its facilities need to be upgraded in line with modern requirements. Also, efficient manpower that will run it should be recruited.
– Training Aba Manufacturers with Latest Skills and Technologies: Aba shoes and other leather product manufacturers should be trained in skills such as Industrial and Product Design, Additive Manufacturing and usage of modern machines which automate shoe production to enable them produce more faster at the Common Facility Centre.
– Encourage Aba Manufacturers to Utilize its Facility for Manufacturing their Products: Aba manufacturers should use the Common Facility Centre to produce their products at scale for them to be globally competitive.
– Provision of Credit to Aba Manufacturers at Single Digit: The lending rate of 22 percent to 30 percent by banks in Nigeria is an impediment to the competitiveness of the Aba leather industry when its counterparts in China and other countries access funds at less than 10 percent.
– Utilizing E-Commerce Platforms for Marketing and Distribution: The Aba Shoe and other leather industry players need to utilize e-commerce platforms like Jumia and Konga for marketing and sales of their shoes since they are the biggest channels in Nigeria and Africa. Also, Amazon.com should be used for distribution to global consumers.
– Creating of a Blockchain Platform to track the leather product value chain: Blockchain is a secure ledger shared by all parties in a decentralized network which records and stores every transaction that occurs in the network. A Blockchain platform which will track the production, sales and distribution, of all the players in the Aba leather industry will provide data which is tamper-proof and will validate the economic status of the industry.
If we implement these suggestions, we will get Africa’s largest cluster of shoe making working at maximum level besides being globally competitive.