Nigeria loses jobs, billions to 90% raw, semi-processed leather exports

Nigeria continues to lose millions of dollars in potential export earnings and thousands of manufacturing jobs as nearly 90% of its leather output is exported in raw or semi-processed form rather than being converted to finished leather products, BusinessDay’s investigations and series of interviews with the industry stakeholders have revealed.

Despite being one of Africa’s largest producers of high-quality goat and sheep skins and accounting for about 46% of the continent’s goat skin production, Nigeria remains largely absent from the lucrative global market for finished leather and leather goods.

Industry data obtained by BusinessDay from the EU-Nigeria Agribusiness Platform, released last year (2025), indicate that exports of Nigerian semi-processed leather and hides fluctuate between $150 million and $272 million annually, while exports to the European Union alone were valued at approximately $10.9 million in 2023. In sharp contrast, exports of finished leather products stood at a negligible $36,000 during the same period.

Adamu Gambo, a Kano-based business analysts say the figures represent a significant loss of economic value. If Nigeria processed most of its hides and skins into finished leather, footwear, bags, belts and other accessories before export, annual earnings could exceed $1 billion, according to estimates by the Nigerian Economic Summit Group (NESG).

The continued export of semi-processed leather means that value addition, manufacturing profits and employment opportunities are being transferred abroad, particularly to European countries such as Italy and Spain, which account for more than 71% of Nigeria’s leather exports and undertake the final stages of processing.

Industry experts estimate that the leather value chain currently supports more than 750,000 jobs across livestock production, hides and skins collection, tanning, manufacturing and marketing in Nigeria.

However, they warn that the country’s dependence on exporting semi-finished leather is denying the economy the opportunity to create hundreds of thousands of additional jobs in footwear manufacturing, fashion accessories production, leather finishing, packaging, logistics and export services.

According to trade data, the European Union imports more than $470 million worth of finished leather annually, yet Nigeria has virtually no presence in that market segment despite possessing the raw materials and expertise needed to compete.

The country’s comparative advantage lies in its globally acclaimed “Sokoto Red” goatskins, long regarded as among the finest leather raw materials in the world. These skins are widely used in the production of premium footwear uppers, luxury handbags and other leather goods.

The leather processing industry is heavily concentrated in Kano, which has emerged as Nigeria’s undisputed leather hub. All five leading leather export and processing companies identified in the sector are located in the state, underscoring Kano’s strategic importance to the industry.

The companies include Z-Tannery Limited, GB Tannery Limited, Fata Tanning Company Limited, Mamuda Industries Nigeria Limited and Kanotan S.A. Limited. Their presence has strengthened Kano’s reputation as the centre of leather tanning and export activities in Nigeria.

Beyond Kano, tanning operations are also found in Kaduna and Sokoto, while the major clusters for footwear and leather goods manufacturing are located in Aba and Lagos.

Industry operators, however, say several challenges continue to hinder Nigeria’s transition into higher-value leather production.

Among the most significant is the widespread consumption of animal hide, popularly known as “ponmo”, which diverts substantial quantities of raw materials away from tanneries. The Raw Materials Research and Development Council (RMRDC) has repeatedly warned that the practice reduces the volume of hides available for industrial processing and export.

Other constraints include inadequate power supply, ageing processing equipment, poor transportation infrastructure, insecurity in livestock-producing regions, limited access to modern finishing technology and difficulties in meeting stringent international quality and environmental standards.

Environmental compliance remains a major issue, particularly as global buyers increasingly demand sustainable leather production processes and strict adherence to waste management regulations.

Stakeholders argue that Nigeria must invest heavily in modern finishing facilities if it hopes to move up the global leather value chain. They note that while demand for goat and sheep crust leather in Europe has remained relatively stable at about $100 million annually over the past five years, the much larger market opportunity lies in finished leather products.

Several European research and technology institutes have been identified as potential partners for Nigeria’s leather sector transformation. These include France’s CTC Groupe, Italy’s Stazione Sperimentale per l’Industria delle Pelli (SSIP), Spain’s INESCOP, Germany’s FILK Freiberg Institute and Hohenstein, as well as Portugal’s CTIC.

These institutions provide expertise in leather testing, environmental compliance, tanning innovation, automation and sustainable production technologies that could help Nigerian manufacturers meet international standards and improve competitiveness.

Industry associations, including the Leather and Allied Products Manufacturers Association of Nigeria (LAPAN), the Hides and Skin Dealers Association of Nigeria, and the Manufacturers Association of Nigeria’s Leather and Footwear Group, have also called for stronger government support to unlock the sector’s potential.

With the domestic leather goods market currently valued at about $2.79 billion and projected to approach $5 billion by 2033, stakeholders believe the sector could become one of Nigeria’s leading non-oil foreign exchange earners if policies are implemented to encourage local processing and manufacturing.

For now, however, Nigeria remains largely a supplier of semi-processed leather to international manufacturers, leaving much of the industry’s value, profits and employment opportunities to be captured outside its borders.