Twenty seven years ago the COMESA Leather and Leather Products Institute (LLPI), was established headquartered in Addis Ababa to bolster the leather industry in the 10 nations which make up COMESA: Ethiopia, Burundi, Eretria, Kenya, Malawi, Rwanda, Sudan, Uganda, Zambia and Zimbabwe. They are estimated to have the potential of earning USD 500 billion from leather products annually. In the last 10 years profits have been increasing and their revenue has been closer to 200 billion. COMESA nations currently experience challenges like dependence on commodities, the perception that local products are inferior, lack of skilled workers, and the need for supportive policies. Kenya’s Dr. Mwinyikione Mwinyihija, Executive Director of COMESA/LLPI, who has a PhD in Environmental Science says, “we can bring in billions more dollars if we apply the right intervention with a full commitment.” Capitals’ Tesfaye Getnet sat down with him to find out more about COMESA/LLPI. Excerpts:
Capital: What makes the leather industry so important to Africa?
Dr. Mwinyikione Mwinyihij: Twenty one percent of the world’s livestock is in Africa. This means that Africa has a continuous and immense source of raw materials for the leather industry. The global leather trade is a USD 200 billion business but Africa only has three percent of that pie right now so if Africa’s leather industry reaches its potential it could create a huge amount of jobs, wealth, growth and development.
Capital: What can be done to make shoes made by COMSEA countries more competitive on the international market?
Dr. Mwinyikione Mwinyihij: Even though the LLPI establishment charter was signed in 1990; it took time for the Institute to organize itself and become fully operational. For the last four years the Institute has been working with all member countries to develop medium and long term strategies for the leather sector and is starting to unpack them. Footwear is now showing visible progress in each country in terms of production, productivity, quality, competitiveness and market access in local, regional and even, in some instances, international markets. We fully agree that much more has to be done to unlock the full potential of the sector and make the region self-sufficient and eventually become a major exporter of leather and leather products.
Capital: You held a big meeting with the leather sector core team and other stakeholders in Hawassa recently what did you accomplish?
Dr. Mwinyikione Mwinyihij: We analyzed the way LLPI performed in 2016 and planned activities for this year. Then we came up with some ideas to improve our performance. We also made some suggestions to help our stakeholders. Some of the ideas we came up with included helping the private sector to create a marketing strategy, developing stronger business clusters; making communication between stakeholders more efficient and getting member states to enforce standards and make them more unified. Easing the process to obtain resources and finance for leather and working with academia to carry out more research were some of the other goals we came up with.
Capital: What are the major challenges Africa faces as it attempts to develop its leather market?
Dr. Mwinyikione Mwinyihij: We have been working to change the mind set of entrepreneurs here and have seen some success. For example now there are some good tanneries in countries whereas before this was an area people did not want to venture into. Finishing leather was another sector that it took time for us to convince people to invest in, but now people are doing it successfully. In Burundi people have been converting leather into furniture. This is a big mile stone.
Our cry is for Africa to move away from commodity dependency to product development and value addition. Ethiopia has been taking this call seriously and racing towards developing finished leather products. We are telling our development partners that the days are past when you invest at the lower end of the value chain and they are happy to work with us.
Capital: How does Ethiopia compare with Kenya?
Dr. Mwinyikione Mwinyihij: Ethiopia has made tremendous strides in developing its leather industry. From a regional and global perspective, however, the country’s recorded transactions in the industry are very low. We think that some of the reasons for this are illegal transactions around the border regions, and a lack of data collection. Information about the production and marketing of hides and skins, leather, footwear and leather goods is not as accessible as it should be. Ethiopia has been mobilizing small businesses in the leather and leather products industry, yet record keeping in these small and medium sized enterprises is almost non-existent.
Capital: Ethiopia’s demand for shoes is going up but people still seem to prefer imports, why do you think this is happening?
Dr. Mwinyikione Mwinyihij: As the population grows so does the demand for shoes and since the country has been making remarkable economic development coupled with population growth, demand for footwear will also continue to increase. We think that enhancing the competitiveness of locally manufactured leather footwear in terms of quality and cost and changing the mindset of the population by trying to convince them to buy locally manufactured products could improve the situation.
Capital: Some reports argue that most Ethiopia leather is produced and sold as a commodity with little quality or design differentiation. What should be done to overcome this challenge?
Dr. Mwinyikione Mwinyihij: At the early stage of development quality and productivity are usually major challenges. Such challenges will be addressed by building the capacity. COMESA/LLPI, as a regional organization, is also working to establish a Regional Design Studio to address design and quality weaknesses not only in Ethiopia but also in the COMESA region.
Capital: In Ethiopia, the linkage between abattoirs and the leather industry is weak, and many animal skins are pierced during the slaughtering process, how can the industry get more quality hides?
Dr. Mwinyikione Mwinyihij: Hides and skins collectors and abattoirs in Ethiopia are the sources of inputs for tanners and major actors in the value chain. A weak linkage between these actors creates a disruption in the value chain that is reflected by the poor quality of hides and skins. We recommend the following interventions: strengthening the existing platform/ association and establishing new ones that are inclusive of the different segments of the value chain. Instituting a quality based payment system for raw hides and skins and skill enhancement training for abattoir and slaughterhouse workers and use of appropriate knives for flaying.
Capital: How will the new industrial parks help the leather industry?
Dr. Mwinyikione Mwinyihij: It means enterprises need less money for infrastructure to enter into business. Furthermore, since similar enterprises in a given sector are coming together, there will be an easy flow of information and experience sharing between enterprises. It will also help enterprises (SMEs) reduce their cost of production through joint procurement of inputs and sale of their products. It will also help the government provide technical and other supports to enterprises
Capital: Even though some universities are graduating leather professionals, small shops that sell leather jackets and other items are owned by people who have learned through experience, what can be done to get them to acquire skills from technical schools and universities?
Dr. Mwinyikione Mwinyihij: Having technical training is necessary but not a requirement for setting up an enterprise. Trainees need to have basic entrepreneurship skills and startup capital to establish a business. Existence of incubation centers and access to finance will help get new entrepreneurs who acquired knowledge and skill from technical schools and universities.