Before the tannery: Where Nigeria’s leather industry loses its profit

Nigeria has the livestock, the tanneries and a long tradition of leather craftsmanship. But the value chain remains constrained by the quality, availability and handling of its raw materials. The opportunity is to fix the economics between the abattoir and the factory.

A hide can lose commercial value before it reaches a tannery. Damage during flaying, poor preservation, delayed collection and inconsistent grading can turn a potentially valuable industrial input into a lower-grade material. By the time it reaches a manufacturer, some of the value that could have supported a profitable leather business may already be gone.

This is one of the less visible problems confronting Nigeria’s leather industry. The country has a substantial livestock base, established tanning operations and skilled leatherworkers. Yet the ability to convert those advantages into competitive manufacturing depends on a supply chain that can deliver the right raw materials, in the right condition, at a price that makes production commercially viable.

The Federal Ministry of Livestock Development says Nigeria produces more than 50 million hides and skins annually, with Kano accounting for more than 80 per cent of the country’s leather processing. These are government-reported figures. They indicate the scale of the resource and the concentration of industrial activity, but they do not establish how much material is suitable for tanning or how efficiently it moves through the value chain.

The distinction matters. An abundance of raw materials does not automatically translate into an abundance of profitable manufacturing opportunities.

Where value begins to disappear

The leather value chain starts well before the tannery. Hides and skins must be recovered after slaughter, handled without unnecessary damage, preserved against deterioration, collected, graded and transported to processors. Each stage affects the next.

Nigeria’s official Leather Value Chain Roadmap identifies damage during flaying and inadequate salting among the reasons hides and skins are rejected. It also highlights underinvestment in trading and transportation, dependence on imported tanning chemicals, inadequate waste management and weak incentives for finished-leather manufacturing.

These are not merely technical shortcomings. They have commercial consequences. A damaged hide may yield less usable leather. Poor preservation can compromise quality. Unreliable collection makes supply harder to plan, while inconsistent grading can create disputes over price and quality. Tanners may then face uncertainty over the volume and condition of the material they purchase.

The result is a productivity problem before the production line begins. A factory can invest in machinery and skilled workers, but its performance still depends on the quality of the inputs arriving at its gate.

The Raw Materials Research and Development Council has documented similar challenges in Kano’s leather clusters, including poor preservation, inadequate quality control, limited access to technology and weak training structures. Its proposed responses include improved preservation centres, hygienic abattoirs, technical training and access to processing equipment.

The implication is that improving leather manufacturing may require investment not only inside factories, but across the network that supplies them.

The collection-centre question

In July 2026, Mustapha Nabegu, president of the National Leather and Leather Products Association of Nigeria, called on the Federal Government to establish strategically located hide and skin collection centres across livestock-producing areas.

According to the ministry’s account, the proposed centres would improve preservation, grading and aggregation, reduce post-slaughter losses and provide tanneries with a steadier supply of higher-quality raw materials.

The proposal identifies an important coordination problem. Individual butchers, traders and collectors may have little incentive or capacity to invest in improved handling if they cannot recover the cost through higher prices. Tanneries, meanwhile, need consistent raw materials but may not control the conditions under which those materials are recovered and stored.

A collection centre could bring volume, preservation and grading together. But infrastructure alone would not guarantee better outcomes. The centre would need clear quality standards, trained operators, reliable buyers, working capital and a pricing system that rewards suppliers for delivering better-preserved hides.

It would also need to demonstrate that the additional value generated exceeds the costs of operating the system. That is the commercial test. A collection centre is not successful simply because it collects more hides. It must reduce avoidable losses, improve the quality of material reaching processors and make the economics work for the people supplying, handling and buying it.

Read also: Scaling women-led shoemaking clusters in Nigeria’s leather industry

The businesses already processing the opportunity

Nigeria is not starting from zero. Kano has established industrial tanneries and smaller leatherworking clusters, although the scale and commercial performance of individual operators vary.

KANOTAN S.A. provides one example of industrial processing capacity. During a visit reported by the Federal Ministry of Information and National Orientation in July 2026, the company’s management said it processed up to 50,000 skins daily, sourced raw materials from across Nigeria and neighbouring countries, and employed about 1,000 permanent workers, alongside seasonal labour. These are management figures reported by the government, not independently audited production data.

The scale makes the company a useful illustration of why upstream supply matters. An industrial operation handling large volumes needs dependable procurement, consistent quality and effective inventory management. Disruptions or defects in incoming material can affect production planning and the utilisation of expensive equipment.

GB Tannery, a third-generation family business in Kano’s Challawa Industrial Estate, offers another example. The company says it processes raw goat and sheep skins into crust and finished leather for export, with stated capacity of approximately 1.5 million pieces annually and markets in Europe and Asia. Those figures are published by the company and should be verified directly before being used as measures of actual output.

These businesses show that Nigeria has operators capable of processing hides and skins for industrial and export markets. The unanswered question is how much additional productivity and profitability could be achieved if the quality, grading and delivery of their raw materials improved.

Smaller enterprises face a related challenge. The Raw Materials Research and Development Council has described artisan tanning clusters in Kano whose leather supplies local footwear makers, leather-goods producers and handicraft businesses. Such clusters are part of an existing industrial ecosystem, but their ability to grow depends on reliable inputs, appropriate equipment, skills and market access.

The opportunity is not simply to replace small operators with large factories. It is to build stronger commercial links between primary suppliers, industrial tanneries and manufacturers of finished products.

The profitability gap

Nigeria’s leather trade reveals a second challenge: much of the value chain remains concentrated in raw or semi-processed materials rather than finished products. A BusinessDay report published in June 2026, citing industry data from the EU-Nigeria Agribusiness Platform, put annual exports of semi-processed leather and hides at between US150million and US272 million.

It reported that exports to the European Union were worth approximately US 10.9million in 2023, while finished leather product exports were valued at US36,000 in the same period. The figures cover different product categories and should not be conflated with the broader World Bank trade classification for hides and skins. The figures point to a gap between having an exportable raw material and capturing more of the value created from it.

Finishing leather and manufacturing footwear, bags, belts and upholstery can create additional opportunities for local businesses and workers. But moving further along the value chain requires more than ambition. Manufacturers need consistent leather, dependable supplies, suitable machinery, working capital, product standards and access to customers willing to pay for the finished goods.

Improving hide collection and grading cannot solve all these problems. It can, however, address one of the constraints at the beginning of the chain: the quality and reliability of the material on which downstream production depends.

From raw material to productive system

The next step is to measure the economics more carefully. How many hides are damaged during recovery? What proportion is downgraded after collection? How much does preservation cost per hide? What price difference do buyers pay for higher grades? How do defects affect usable yield and processing costs at the tannery?

Publicly available evidence identifies the constraints, but it does not yet provide a reliable national estimate of the profit lost specifically through poor collection and grading. That figure should not be invented. It must be established through records from abattoirs, collectors and processors, supported by direct observation and independent technical assessment.

The Federal Government’s handover of a Leather Enterprise Centre to Audu Bako College of Agriculture in Dambatta, Kano, in July 2026 offers a potential route for building the skills and enterprise capacity the sector needs. The ministry said the centre would support practical training, research and entrepreneurship across the leather value chain. Its eventual impact will depend on the quality of its programmes and their adoption by businesses.

For Go Local, the lesson is larger than leather. Local resources become the foundation of competitive industry only when the systems around them work. Collection, preservation, grading, logistics, processing and market access are not peripheral activities. They help determine whether a factory can operate efficiently and whether a manufacturer can earn a sustainable return.

Nigeria already has leather businesses. The next challenge is to make the supply chain around them more reliable, productive and commercially rewarding.

The profit may not begin with a new factory. It may begin with a better-preserved hide, a credible grade and a price that rewards quality.