Ethiopia possesses one of the world largest livestock populations of which: 57,829,953 cattle population that makes the country ranking 1st in Africa and 6th in the world; 28,892,380 sheep population which makes it 3rd in Africa and 10th in the world and 29,704,958 goats population which makes it 3rd in Africa and 8th in the world. Though the country is rich in the population of animals, it is not as benefited as its possession because of various reasons according to data from Leather Industry Development Institute (LIDI).
Animals and animals’ products export share during 2018/19 budget year is 11.13 percent out of the country’s total export. This indicates that the country is not benefited from the animals and value added products comparable to its expectation. And this in turn reveals that the sector has not been led in an effective way during the past years, the data indicated.
Global leather and leather products trade is USD 100 billion per annum at the moment. This performance amazingly exceeds the total trade of meat, coffee, sugar, rice, tire, cotton and tea. The sub sector contributes high share of a country’s economy especially for developing countries like Ethiopia. Moreover, it is the major source of foreign currency in line with creating vast job opportunity and it can be developed with small capital. Ethiopia’s share in the global leather trade, however, gives red light with only 0.12 percent.
Unlike the prominent economic importance of the sector, the nation’s global trade share indicates that it is given low emphasis by government and other stakeholders. Currently, only 22 leather factories are operational whereas others ceased production due to various reasons.
Numerical data indicate that even factories on production process are not working with their full capacity. Regardless of low performance of the leather factories, finished leather product takes the upper hand up to now as export trade performance indicates. In the view of job opportunity, nearly 10,000 citizens are working in the industry.
Shoe manufacturing is the emerging sector in export trade as 23 factories are engaged on export trade at the moment. Their annual product is 13 million pairs of shoes which is 54 percent of their production capacity. Had the shoe factories used their full capacity; they could have produced 24 million pairs of shoes. The amount provided to world market is only 4.1 million shoes out of the total product of which 91 percent is produced by foreign companies.
There are 5 leather glove factories in the country which become operational in recent times and it is the emerging industry which hired some 2,000 workers in its production sites. The industry earns up to USD 7 million from export trade.
Among the factories producing leather clothing and other products, 13 of them are engaged on export trade and the sector is also the growing one. Foreign investors’ participation in the sector is very limited as the major part is occupied by local investors. The sector secures up to USD 5.5 million per annum from export trade and about 3,000 workers are hired in the industry.
All in all, the leather industry sector has created job for nearly 25,000 citizens in addition to forex secured from the export trade.
Amid the fortunes of the leather industry sector are the great amount of animals’ population the country possesses and the need for their leather and hide by world market because of their special characteristics. In addition, the availability of relatively easily trainable human resource; an opportunity that enables to utilize tax free markets such as African Growth and Opportunity Act (AGOA), Common Market for Eastern and Southern Africa (COMESA) and others give green light to the sector.
Though the sector is fortunate in many ways it confronts threats too. Among the threats are global economic recession, market instability, the need for leather substitutive products such as synthetics, plastics and textile products by world market and lack to meet quality and social compliance in line with political instability.
Major bottlenecks of the sector are shortage of inputs and infrastructure to the needed amount and appropriate time; deficit of foreign currency; shortage of chemicals, accessary and component as well as problem of manufacturing space and power supply.
Leather Industry Development Institute (LIDI) public wing has conducted a conference recently. The objective of the conference according to Antigegn Kebede, marketing director at the institute is to aware concerned bodies towards emphasis to the sector.
As to him, because of low emphasis from the stakeholders to the sector, the country is losing the benefit it should have gained in a compatible amount of its potential. “For instance, our last year’s plan was to gain USD 280 million by exporting leather and leather products apart from local market. The actual achievement, however, was only USD 120.3 million with 42 percent performance which is very far from the plan.”
Regardless of the challenges, he said that the institute has planned to reach and mobilize the concerned bodies through creating awareness focusing on the disparity between potential of the country in the sector and its actual benefit. The plan for the already begun budget year that indicates the ways out from the problem is provided to government and the institute exerts its maximum effort for the fruitfulness of the plan.
Zeriabiruk Gebremichel, Sheba Leather Industry Marketing and Purchasing Department head, for his part said that the problems are somehow complicated. It begins with the quality of raw leather provided to factories as it is declining from time to time.
This can be happened before removal from the animals, during removal and post removal handling. Leather supplying process is also another headache that passes through long chain. The price of a hide from the original suppliers does not exceed Birr 15 but when it comes to manufacturers, it costs up to Birr 60.
Absence or high price of salt that is necessary to keep the quality of leather is also among the problems. The price is not affordable by most of the factories since it is accelerated from Birr 250 to 800 within relatively short period. With such amount of cost, factories cannot be competent in the world market.
Possible solutions as to Zeriabruk are working jointly among government and manufacturers and carrying out their responsibilities individually. Other stake holders like Ministries of Agriculture and Industry also have to go through their responsibilities help the supply of quality leather, he said.
Tizazu Woldetsadik, raw leather supplier for his part said that the sector has to be led under legal frame work. Some suppliers who directly collect from the people are not legal as of him. Therefore, those legally registered and pay tax cannot compete with them. This necessitates the need for government to lead the sector in a way all stakeholders benefit from it.
Kebede Amede, leather technologist and technical advisor at Kolba leather factory, for his part said the basic thing should be given emphasis is the quality of the leather. Poor quality is resulted from lack of integrated work among the concerned bodies from the husbandry to factory level.
Government has to take the lion share in leading the sector strategically starting from issuing the right policy. Experts’ comments should also be taken as constructive input in order to make the country competent in the world market, he noted.
The Ethiopian Herald September 10, 2019
BY BACHA ZEWDIE
