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Ethiopia’s shoes export to Europe, Middle East, and East Africa is not bringing in a fair price as producers are not able to sell their products directly to buyers. Currently, the majority of Ethiopian shoe exporters sell their shoes to brokers at a price between USD 5 to USD 7 a pair.
The poor price offered for Ethiopian leather shoes slashes the foreign currency income the country should get from the sector by a significant amount.
Export of leather shoes fetched USD 21 million in the past six months of this budget year, falling too short behind from the projected income of USD 70 million.
A number of factors are said to have reduced the earnings. Lack of raw material, smuggling out the products, illegitimately brokered sales, second rate quality of the products, and poor marketing strategy are some of the factors that add up together for the low performance. Yigzaw Assefa, President of Ethiopian Leather Industries Association (ELIA) told Capital that reaching the end users is the major factor hampering the sector.
“We are not getting the real buyers, our products pass through many brokers before they reach the consumer. Because of this, we don’t make good profit” he said.
Yet, Yigzaw is optimistic that the market prospect for the products is not overcast entirely. “The solution is in our hands, producing quality shoes that match global standards, using better technologies, and getting our way in to the end market are issues that we must focus on to solving our problems.”
He added that the government’s initiative of freeing the tax levied on imported raw materials is an important decision to revitalize the sector.
Berhanu Serjabbo, Public Relation Head of the Leather Industry Development Institute suggested that the government is about to set up a price floor for exported leather shoes to increase incomes. “We are not getting the proper income but now we are about to set a price floor, at least to cover the production cost. Before putting into work the minimum price, we have to raise awareness for the manufacturers to produce good quality shoes using modern technologies,’’ Berhanu said about the remedial supports.
With an approximate 35 million cattle, 39 million sheep and goats, 8.6 million equines and one million camels, Ethiopia is first in Africa and ninth in the world for its livestock population. However, the leather shoe factories are not giving the nation an acceptable volume of earning that could be reaped from this potential wealth.