Ethiopia has a cattle population of more than 53 million, and sheep and goat population of 25.5 and 24.1 million, respectively. This makes the country the 1st from Africa and the 9th from the world in its cattle population which enable the country to have a strong raw material base for the leather industry.
However, even if the country has great potential in the sector only 50 percent of hides and skins potential is being utilized due to different challenges. To return this government is undertaking different measures.
Teka Gebreyes State Minister of Agro-Processing and Pharmaceutical sector with the Ministry of Trade and Industry said that to address the challenges that encountered leather industry sector government has been undertaking different measures.
As to him, the tax imposed on the exportation of semi processed leather and leather products along with other factors like inability of leather industry to get enough salt that is crucial for the industry had been adversely affecting the sector.
Due to these factors, the productivity of leather industries that have been operating in the country was below the par compared with the potential of the country.
To improve the performance of the sector, currently government has revised and created conducive legal framework through setting 61/2012 new policy aiming to increase the number and profitability of leather industries through lifting the heavy tax imposed on the exporting of semi processed leather products.
He stressed that the new policy totally remove tax from the exporting of the semi processed leather products and it is helpful to enhance foreign currency income through boosting the exporting capacity of the industries.
Equally, to enhance the value adding capacity of the leather industries, the Ministry has been working to create different favorable incentive approaches.
Furthermore, the government to tap the potential of the sector, it has been working to establish Leather City Industry Park in Modjo town, in the Oromia State, he added.
Dagnachew Shiferaw, General Director of Leather Industry Development Institute on his part said that the amount of foreign currency that the country has been obtaining has been declining due to internal and external challenging factors. To cut off the challenges, the Institute has been supporting industries engaged in the sector through enhancing their capacity, mechanizing the sector and organizing small firms in cooperative.
As to him the numbers of cooperatives which had been engaging in the sector is too low as compared to other sectors and organizing mass firms in cooperative – starting from the activity of animal husbandry to produce the finished leather products -assists to enhance value addition in the sector.
The Ethiopian Herald January 29/2020
BY TAMERU REGASA
