Ethiopia's leather industry is 64% behind schedule
The Ethiopian Leather Industry Development Institute announced last week that the country’s leather exports in the 2012/13 fiscal year earned 123 million U.S. dollars, which is 64.3% below the target income of 192 million U.S. dollars. The export revenue of finished leather reached 101 million U.S. dollars, showing an increase of 98% over the previous year. In addition, exporting leather shoes and leather gloves brought 19.2 million US dollars and 3.2 million US dollars in revenue to the country, respectively. Although compared with the previous year, the entire leather exports showed an increase of 11.4%, the country has failed again to achieve the planned goals in the government's growth transformation plan. Ethiopia has highlighted eight areas in its five-year plan, and the leather industry is one of them. The government plans to reach US$500 million in leather export revenue by the 2014/15 fiscal year. However, the performance of the leather industry is far below initial expectations. The growth transformation plan started in 2010/11, and only US$220 million was received in the first three fiscal years, according to the annual report published by the Ethiopian Leather Industry Development Institute. The country’s shoe export revenue this fiscal year reached US$192 billion. The report stated that the country's leather industry has huge potential, which needs to be tapped, and the workload is still huge. The Ethiopian leather industry lost approximately US$20 million due to illegal trade in border cities. The smuggling problem is getting more and more serious, and it has brought obstacles to the development of emerging industries, said WonduDeresse, deputy dean of the research institute. A team of representatives from the Institute found that shoe samples produced in Ethiopia appeared in the markets of neighboring countries such as Sudan and Kenya. Through smuggling, the shoes produced in Ethiopia were shipped to other countries and then imported back at a higher cost. The dean said that the lack of success in the leather industry was attributed to smuggling. We cannot stop such behavior alone. He added that the responsibility of the institute is to provide technical support to companies engaged in the leather industry. The Ethiopian Leather Industry Development Research Institute also cooperates with Addis Abeba University to train university students on leather knowledge. The first batch of students graduated last year. Training usually starts at the graduate level. The Ethiopian government has taken a variety of measures to promote leather exports, one of which is to restrict the export of low value-added raw leather. According to the report, the export of raw leather which has no significant contribution to the export composition of the leather industry is taxed as much as 150%.