Due to poor industrialisation policies and weak value-addition strategies, African countries are losing billions of dollars in potential revenue from sale of leather products, according to a leather expert in Ethiopia.
Mekonnen Hailemariam, from Addis Ababa’s Leather Institute, made the statement at an African Union media awareness event, on the Accelerated Industrial Development for Africa (Aida) framework and related strategies and industrial policy literacy. He told the journalists present 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.
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.