HomeBusinessLeather value-chain development can spur growth: ZimTrade

Leather value-chain development can spur growth: ZimTrade

BY MTHANDAZO NYONI

ZIMBABWE’S leather sector is one of the emerging sectors in the country that can spur economic growth when the value-chain is fully developed and capacitated, the national trade development and promotion organisation ZimTrade  has said.

According to its latest Trading Post, ZimTrade said the leather sector had the potential to contribute to the country’s economic growth, but for that to happen, the value-chain needed to be developed and capacitated.

An analysis of the leather sector’s exports for the period 2016 to 2020 reveals that raw hides contributed 96%.

“This essentially means that Zimbabwe is exporting mainly raw materials, which can be interpreted as exporting value and jobs.

“This is not sustainable.

“Consequently, should there be external shocks and any trade control measures instituted on raw hides and skins, this can have a domino effect on the sector,” ZimTrade said.

The organisation said lessons could be learnt from Kenya which has a Leather Development Council that provides leadership and policy direction in regulation, processing, production and marketing in the leather industry.

Hides and skins are a by-product of the meat and dairy supply chains.

“The demand is greatly influenced by activities in the footwear and associated leather products markets,” ZimTrade said.

“In essence, production of hides and skins is not a function of demand and price of hides and skins, because they are not produced primarily as raw materials of the leather industry, but a by-product of the meat and dairy supply chains.”

ZimTrade said the demand for hides and skins was derived demand, meaning they are not tanned for their own sake, but for the purpose of producing footwear, leather garments and other leather products.

The National Leather Sector strategy (2021-2030) was launched in April 2021 with the objectives to increase capacity utilisation of leather products from 30% to 75% by 2030, increase exports from 10% to 40% of production and enhance application of sustainable production technologies from 10% to 60% by 2030.

The strategy was launched on the backdrop of the National Development Strategy 1 (2021- 2025), which identified the leather sector as one of the quick wins under priority value chains to spur growth and create jobs.

In supporting this drive for development of value chains, a revolving fund of US$10 million to the sector for equipment replacement or retooling was allocated in the 2022 budget.

The contribution of hides and skins value chain towards achieving economic growth is potentially high and the only way to such success is through embracing value addition initiatives, according to ZimTrade.

According to TradeMap, South Africa accounts for 89% of the raw hides from Zimbabwe while Italy and Singapore have 4% apiece.

With a diversified leather sector portfolio, the contribution of valued added exports can help attain the nation`s economic objectives of 7:14, ZimTrade noted.

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