Zimbabwe suffers from drought and mismanagement

Members attending the annual conference of the Leather and Allied Industries Federation of Zimbabwe (LAIFEZ) decided to ask the government to restrict hide export permits to recognised industry players in an attempt to keep some of the country's scarce raw materials for their own tanning industry. Power cuts, foreign exchange shortages, soaring inflation, labour unrest and stalled negotiations, price controls, are every day events that take precedence over more normal business concerns. Commodity prices, even for locally produced goods, are increasingly pegged to US dollar black market rates. These bear little resemblance to the rates set by government, but more accurately reflect market forces. Annual inflation is running at 228%. Unemployment has reached 80% and 75% of industrial capacity is lying idle. Planted farming acreage fell this year by 50% and harvests of maize, a staple food for the country, are down 65%. It was reported on May 18 that 40 people in Bulawayo had died of starvation in the first two months of this year. Reduced bovine slaughter is on the cards, a reduction likely to move basic raw material from the short supply bracket to the scarce. Such conditions result in acrimonious competition for raw material and rising prices. It also leads to illegal hide exports, smuggling and overall worsening of the economy. Ample supply of raw material was for long a 'taken for granted asset' by the Zimbabwe leather sector. But this is now in jeopardy. The national herd has been decimated, the commercial herd on political grounds and the subsistence farming sector by the ravages of drought and the incompetence of governmental departments in providing aid. Apart from scarcity of hides, drought compounds the problem of sourcing good quality hides for export quality leather production. At present, by agreement, hide merchants cannot export in the raw officially and have to offer a nominal 50% of hide production to local tanneries before exporting either as raw or as third party processed wet-blue. But this is open to abuse. A few merchants ask impossibly high prices for raw stock, which have to be refused, and then arrange wet-blue processing by third party tanneries on a commission basis. Tanners have been asked not to third party tan without authorisation from LAIFEZ. But will all comply? First and second grade hides, vital to quality production, are in especially short supply. Tannery managements suspect the bulk of better grade hides are exported by merchants, either raw or as wet-blue, to the detriment of local industry. It was suggested hide suppliers should be 'persuaded, cajoled or threatened' into supplying locally. This approach reflects near desperation and is not a practical proposition.