The country’s leather industry is facing a shortage of raw materials and rising input costs, forcing tanneries to import production inputs from countries including Chile, India and Bangladesh despite the country’s large livestock population.
The challenges were raised during a discussion organised by the Addis Ababa Chamber of Commerce and Sectoral Associations, where traders and government officials discussed constraints facing the manufacturing sector. Paulos Kusa, Head of the Manufacturing Sector at the Addis Ababa Industry Bureau, was among the government representatives attending the forum.
Paulos said Ethiopia’s large livestock population has not translated into sufficient raw-material supplies for the domestic leather industry.
“While Ethiopia is the leading producer of livestock in Africa, neighbouring countries have become known for illegally transporting our animals and exporting livestock and leather products. Meanwhile, our leather factories are importing inputs from countries such as Chile because of shortages in domestic supply,” he said.
He said the government has given attention to addressing challenges in the leather sector and expressed hope that the leather industrial cluster under construction in Mojo would help resolve some of the industry’s problems.
The Ethiopian Leather Industries Association said the sector is facing serious difficulties due to rising input costs and the growing export of raw hides and skins.
Dagnachew Abebe, Secretary General of the association, told Capital that although Ethiopia has no shortage of raw hides, domestic tanneries are struggling to secure sufficient supplies.
He said the previous restriction on exporting unprocessed hides and skins had helped protect domestic value addition, but changes to the policy have created new challenges for local manufacturers.
“Previously, it was good to ban the export of leather that had not undergone value addition. Now the law has been amended, allowing raw leather to be exported after paying a 150 per cent tax. This has created a major problem for the industry,” Dagnachew said.
He said Ethiopian raw hides are being purchased for export to West African markets, including Ghana, Senegal and Nigeria. According to him, some exporters are also sourcing hides from government slaughterhouses.
Dagnachew said the quality of hides had previously been one of the industry’s major concerns, but the availability of raw materials has now become an equally serious problem.
He also alleged that hides from slaughterhouses are not always properly separated or handled, resulting in some being damaged and discarded. At the same time, he said, government slaughterhouses have started selling hides to exporters at higher prices, making it more difficult for domestic tanneries to compete for supplies.
Facing shortages and rising prices, Ethiopian tanneries are importing inputs from India and Bangladesh to keep their factories operational and avoid leaving expensive machinery and workers idle.
Dagnachew said the rising cost of production has also pushed up the prices of finished leather products. Products that previously sold for around 1,000 birr, he said, can now cost as much as 7,000 birr.
He called on the government to introduce stronger measures to prevent the export of raw hides and skins, particularly those originating from government slaughterhouses.
According to Dagnachew, a cowhide can be purchased from households or local collectors for up to 100 birr, while tanneries may pay up to 400 birr. However, he said exporters can purchase hides from slaughterhouses for as much as 1,500 birr per kilogram at auction and sell them abroad for up to 3,000 birr.
Capital sought a response from the Ministry of Industry regarding the concerns raised by the leather industry, but had not received a response at the time of publication.
Ethiopia has one of Africa’s largest livestock populations, with an estimated 66–70 million cattle, yet the leather industry continues to face difficulties in converting the country’s livestock resources into locally processed, higher-value products.
