Nigeria Can Boost FX Earnings by 70% from Leather—Osinbajo

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By Aduragbemi Omiyale

The decline in crude oil prices caused by the COVID-19 pandemic in 2020 put the Nigerian economy under pressure as foreign exchange earnings slumped significantly.

At a point last year, the price of the Brent crude, under which Nigeria’s crude oil is graded, was selling at $20 per barrel and this caused a plunge in revenue as most of the country’s earnings are from the sale of the commodity.

As a result, the nation slipped into another recession in the third quarter of 2021 after the gross domestic product (GDP) contracted by 3.62 per cent after a 6.10 per cent decline in the second quarter of the year.

It was the second time the economy was sliding into a recession in four years after it had one in 2016. However, unlike the previous one, last year’s recession was short-lived as the nation exited in the fourth quarter of the year after a 0.11 per cent GDP growth.

Despite the country out of recession, there is still an FX liquidity crisis in Nigeria and the Vice President, Mr Yemi Osinbajo, is of the view that the leather products value chain can be of great assistance if well harnessed.

Speaking on Tuesday in Abuja at the formal launch and sensitisation workshop on the National Leather and Leather Products Policy Implementation Plan, he said the nation can boost its FX earnings from the sector by 70 per cent.

He noted that by 2025, the leather products industry will generate over $1 billion and create employment for over 700,000 people.

The Vice President, who described the implementation of the leather products policy as holistic, added that it will also provide a more sustainable infrastructure development plan and guaranteed access to credit facilities for business people.

According to him, countries like Spain, Italy, China and the West African sub-region are prime destinations for Nigerian leather products.

In his keynote address, Mr Ogbonnaya Onu the Minister of Science and Technology, hailed the leather products policy as the first strategic implementation plan for the leather and leather products policy in Nigeria.

“The Federal Ministry of Science and Technology is supporting this important initiative through offering leadership in the transformation of our economy from a resource-based to a knowledge and innovation-driven one,” he said.

The Minister further said the policy will help the effective and efficient exploitation of Nigeria’s natural resources, earn and conserve foreign exchange, create jobs and help promote the country’s drive for self-reliance.

He called on all relevant stakeholders to facilitate both foreign and domestic investments, saying, “We need to transform our plan into action, we need all stakeholders to work together, we need to involve the Organised Private Sector, we need to bring in more investment, both domestic and foreign into the leather industry.”

The Minister of State for Science and Technology, Mr Mohammed Abdullahi, said the implementation plan was delicate and vital to reposition Nigeria for socio-economic growth and development, saying that the implementation plan covers eight thematic areas which are; Research and Development, Governance, Intellectual property Rights, E-Leather, Compliance, Environment and social best practices, standards, marketing and patronage, Funding as well as fiscal measures and critical infrastructure.

He also noted that if the leather policy is fully implemented, it will create an enabling environment that will sustain all-inclusive growth for local and small enterprises as well attract and protect investments, improve production output and promote innovation in the country.

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