‘Weak value-addition policies bleeding Africa’

BY VENERANDA LANGA in Addis Ababa, Ethiopia

ZIMBABWE and other African countries are losing billions of dollars in potential revenue from sale of leather products due to poor industrialisation policies and weak value-addition strategies, a leather expert in Ethiopia has said.

Mekonnen Hailemariam from the Leather Institute in Addis Ababa, on Thursday told African journalists attending an African Union media awareness on the Accelerated Industrial Development for Africa (Aida) framework and related strategies and industrial policy literacy, that 16% of global hides and skins were from the continent, but the source countries were earning very little from the leather industry.

“There is need for strong industrialisation policies because Africa holds nearly a quarter of the global resource of livestock (25%), but while 16% of hides and skins are from Africa, when we look at the value chain to see what Africa earns, it is very little,” Hailemariam said.

“As a result, a lot of opportunities are missed in massive production of leather products such as shoes, resulting in Africa actually importing shoes from European and Asian countries like China which import raw leather materials from Africa.”

Hailemariam said in the leather industry, more than 60% of the business goes to footwear, 26% to other leather products and 6% are raw materials.

“When we check what Africa earns from leather we find that it is very little to the extent that 3% of the revenue is derived from raw materials and less than 1% from footwear because there is no value addition. It is necessary for Africa to industrialise and do value addition, because when a leather product is finished the value appreciates twelvefold,” he said.

Comesa research shows that until the year 2000, Zimbabwe produced 17 million pairs of leather shoes annually and had a vibrant leather industry comprised of highly skilled small and medium enterprises (SMEs), and the value chain included livestock farmers, hides collectors, tanners and manufacturers.

However, the regional body says by 2011, Zimbabwe’s leather industry had plummeted to a mere one million shoes annually due to ongoing economic crises, competition from lower quality imports and exports of hides and skins.

Hailemariam said if the leather industry was handled well, it had a longer value chain integrated to millions of households in Africa and can contribute to diversification of industries and creation of wealth.

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