Nigeria's leading finance and market intelligence news report.

Nexportrade as tool to standardize Aba-made shoes, others for export

Aba, the commercial hub of Abia State hosts one of the biggest finished leather clusters in Africa that produces shoes, belts bags, and trunk boxes.

The Aba leather cluster said to be the biggest in West Africa, with about 100,000 people directly engaged in the manufacture of shoes, belts, and bags, and a production capacity of about one million pairs of shoes per week produces for local and international markets.

However, the sector is faced with a myriad of challenges that include, lack of modern equipment, raw materials, and access to cheap funds.

Unofficial export that goes on in the sector, has also made it difficult for policymakers to get accurate data to develop the sector and earn foreign exchange.

Consequently, the establishment of Nexportrade Houses Limited (NHL), as a strategy for Nigerian firms, especially the small and medium enterprises (SMEs), to access the international market, provides an opportunity for Government and other stakeholders to standardize Aba-Made shoes and other finished leather products for export.

Nexportrade Houses Limited was established in 2006, through the joint effort of the Nigerian Export Promotion Council (NEPC), Manufacturers Association of Nigeria Export Group (MANEG), and some other stakeholders from the public and organised private sectors, to increase Nigeria’s international market share, whilst stimulating economic growth.

It will be impossible for the Aba finished leather cluster to export formally, without standardizing its production processes, Ken Anyanwu, secretary-general, Association of Leather and Allied Industrialists of Nigeria, an association of shoe, belt, and bag makers, argued.

He explained that the cluster needs modern equipment and raw materials to enable it to produce quality products that can compete favourably in the international market.

“Right now, we don’t have the capacity to compete in the international market, because we don’t have the right equipment, raw materials, and funds, to produce seamlessly and meet customers’ demands.

“If you have the capacity to meet demand and supply, then you’ll start looking for market outside, but when your quality is substandard and you cannot meet customers’ demand, you shouldn’t be talking about export. Where will you be exporting to? Except you want to export to lesser African countries.

“But if you want to make real money like the promoters of Nexportrade are suggesting, then you should be exporting to the international market, where your product will compete with products from Italy, Brazil, Spain, among others.

“For me what we really need is to standardize our products and then export to Europe and America. Our products are already in Togo and Cameroun that demand low-quality products, but we are not making all the money because they are buying low-quality cheap products”, Anyanwu stated.

Olusegun Awolowo, executive director/chief executive officer, NEPC, stressed that Nigeria needs an aggressive marketing approach to increase productivity, enhance expansion, and facilitate growth.

He observed that one of the major challenges faced by exporters in the country is the cost of logistics, especially exporting to West African countries, where Made-in-Nigeria products have a high competitive advantage, noting that NHL was set up to drastically reduce this cost of logistics for Nigerian exporters, especially the MSMEs.

He however regretted that NHL is yet to commence full operations more than a decade after its establishment, due to some operational challenges.

He affirmed that the NHL platform can and would indeed provide impetus to Nigerian exporters to dominate the West African and African markets at large, if well implemented, which is the reason it is collaborating with the organised private sector and other stakeholders to reactivate and reposition the Nexportrade Houses Limited project with a view to achieving its set objective.

Similarly, the Council is also working closely with MANEG to upgrade the Nexportrade website with the aim of making it more interactive in order to attract potential customers and promote the patronage for export quality Made-in-Nigeria products and services, Awolowo stated.

According to him, “If we must as a nation forge ahead in the non-oil export drive, then we must be ready and willing to change our marketing strategies or ways of accessing foreign markets.

“It is in this context that we need to ensure the smooth take-off of NHL in order to reap the benefits accruable from the implementation of the Africa Continental Free Trade Agreement”.

“The Council is therefore facilitating this programme with a view to bringing the NHL initiative to fruition.

“This is more so that the dwindling crude oil prices, coupled with the negative impact of the ravaging COVID-19 pandemic, is having a devastating effect on the nation’s economy.

He emphasised that the programme is not only aimed at sensitizing the various stakeholders on the NHL project, but also to ensure the buy-in of various participants.

He implored all stakeholders to put all hands on deck and ensure that the laudable initiative does not become one of the numerous abandoned projects in Nigeria.

Benedict Obhiosa, executive secretary, Manufacturers Association of Nigeria (MAN), explained that Nexportrade Houses Limited, in 2008, opened a showroom in Liberia, where they did their first shipment for some companies, like PZ-CUSSONS, CAP plc, Golden Noodles Limited, and Golden Pasta Company Limited.

He stated that Nexportrade exported to Cameroun, Ghana, Chad, Burkina Faso, and Mali, the same year it exported to Liberia, but could not continue, due to some logistics challenges.

To assuage the challenges faced by the scheme in Liberia, Obhiosa noted that the leadership of Nexportrade Houses Limited in collaboration with the NEPC, decided to restrategise on looking at different markets within West Africa and they decided on Togo.

This led to the registration of Nexportrade Houses Limited in Lome, Togo, in December 2018, as a legal entity, to begin this journey in a proper way.

He also explained that despite the border closure in 2019 that Nexportrade Houses Limited participated in the 16thTogo International Trade Fair with 22 companies, who were there to exhibit their products and make important contacts.

According to him, “all the companies that participated in the Togo International Trade Fair in 2019, got import requests to ship their products to Lome”.

Roslyn Ekanem, an assistant director and trade promotions advisor, Aba office of NEPC, urged Aba entrepreneurs to leverage on Nexportrade to grow their businesses and increase the state and country’s gross domestic product (GDP).

Kola Awe, chairman, Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), export group and board member of Nexportrade, emphasized the importance of the various regulatory agencies of government, like the Customs Department and Nigerian Export-Import Bank (NEXIM) in the eventual success of NHL.

He observed that the success and failure of the scheme are highly dependent on the participation of the various government regulatory agencies’ co-operation, participation, and adequate understanding of the scheme and its potential impact on the nation’s economy.

Being a two-way trade house the engagement of the major trade facilitation agencies of government is paramount in the import and export activities of the trade house, Awe stated.

He explained that their roles and responsibilities will include and not limited to giving special economic recognition and status to the trade house, a recognition that is derived from the doctrine of necessity in the government quest to promote non-oil export and enhance SME participation in export.

They will also help to promote and encourage the trade house concept in their various programmes and policies, develop specialized trade initiatives and laws that will impact the trade house activities and operations.

Their full participation in the scheme, will ensure review laws and policies that are counterproductive to the operation and administration of the trade house, implement the government ease of doing business in their operations with the trade house and give special consideration to the trade house- to fast track operations and service delivery.

They would also collaborate with the trade house in the area of advocacy and awareness of the trade house concept and operations, develop and create inter agencies team to promote and assist the trade house by simplifying and harmonizing their operations as well as recognize the NHL as part of the organized private sector trade facilitation establishment.

Get real time updates directly on you device, subscribe now.