RESEARCHERS estimate the market size of Aba shoe industry at N144 billion ($350.364 million).

The estimate is predicated on the production of one million shoes each week and 48 million pairs annually at an average price of N3000 per pair.

The industry is reputed for high employment potential and multiplier effects on other aspects of the Nigerian economy.

Some markets leaders in Aba, the industrial hub of South-East Nigeria, say there are more than 100,000 entrepreneurs in the shoe/leather cluster.

But Secretary of the Association of Leather and Allied Industrialists of Nigeria (ALAIN) Ken Anyanwu estimates that there are over 200,000 entrepreneurs in the cluster.

The export potential is enormous as half of the entire production is shipped to West and Central Africa, Europe and the Americas, according to market leaders in Aba.

A shoemaker James Umenweke says that Aba shoes are found in supermarkets and hypermarkets abroad.

He says a pair of Aba shoes sells between $19 and $25 in the United States of America market and between €15 and €25 in European shops.

Shoemakers in Aba also produce designs for manufacturers in various parts of the world and they receive payment for such services, he adds.

But Aba shoe industry supplies only 0.00128 per cent of the $271.82 billion global shoe market.

The industry comprises 14 clusters, including 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.

High potential, low outcomes

It is August 19, 2021 at Powerline, beside Cameroon Park in Aba. Ken Anyanwu is in his factory with two staff members designing, cutting, skiving and stitching pairs of shoes.

It is fun for him because he has been in the business for over 20 years. He produces and supplies to customers who place orders within and outside Aba.

He can produce 1,000 to 5,000 pairs of shoes in a month, and some of his products are found in markets beyond Nigeria.

He is the secretary of Association of Leather and Allied Industrialists of Nigeria (ALAIN) and represents shoemakers in many fora in Nigeria.

To produce a pair of shoes, Anyanwu needs 53 items which include nails, fibre, thread, and synthetic leather/ hides.

Most of the items are imported from various parts of the world and require foreign exchange transactions.

The official exchange rate of dollar to naira today is N414.9/$, according to the Central Bank of Nigeria (CBN) and shoemakers say they are unable to have access to the quantity they require.

They can only access five to 10 per cent of their dollar demands. Though some analysts blame the CBN for mismanaging the foreign exchange (FX) market, the major culprit is Nigeria’s inability to earn sufficient FX from export of products like shoes.

“Challenges with the exchange rate affect pricing of our raw materials and final products,” Anyanwu says.

He buys from importers of these items and bears the brunt of high exchange rates.

He is also operating with a generator as there is no sign of electricity from a public source in his factory. Whenever his two generators are fully on, he spends at least N8,000 on diesel to keep them running.

The implication of this is that his cost of producing a pair of shoes has nearly doubled since 2014 when Nigeria’s naira began to wane in the face of other stronger currencies.

He is not alone in this. Generator smokes and sounds are reverberating through the 14 administrative zones in the shoe cluster.

In 2019, Vice President Yemi Osinbajo commissioned the Ariaria Market Independent Power Plant, which was designed to power businesses at the Ariaria Market with clean, gas-powered electricity.

But Anyanwu says the power project only serves the traders in Ariaria Market, not shoemakers who are the real industrialists that create jobs for the country.

READ MORE HERE: https://www.icirnigeria.org/as-nigerian-government-fails-n144bn-aba-shoe-industry-crawls/

If you're in the South East and you wonder why your IGR is lower than that of Kano State, look no further. Subsequent governments in Abia State had failed to optimize the true potential of this industry thereby leaving it for local players to control the revenue.

Imagine a scenerio whereby the government makes it easy to export these shoes and the government taxes the revenue. These guys will be smiling to the bank and also pray that dollar sells for ₦1,000 cause that will guarantee more money and investors will troop in which will develop the sector.

Kano hides and skin market produce leather for most of the biggest brands in the world. That's business 101