Tanzania: Leather Industry Faces Bleak Future

Tanzania leather industry faces bleak future as global commodity price slump lowered demand for value added leather products from major importers.

Leather Association of Tanzania (LAT), Executive Secretary, Mr Joram Wakari, said in Dar es Salaam yesterday that leather exports have dropped to less than 5 per cent forcing some players to close down their businesses.

"The situation is worse as very little is being exported due to fall of demand from the most importing countries including China and Pakistan thus leaving most godowns full of packed semi processed leather products," he said.

For example, one leather factory in Shinyanga has closed down operations due to falling demand for semi processed leather products. The situation has not impacted only Tanzania, but also Kenya, Ethiopia and Brazil. He said most business people in the leather industry were frustrated and had incurred heavy losses since when the situation started to surface on the last quarter last year. The governments will also lose substantial revenues from the leather industry.
The country spends substantial amount of its scarce foreign exchange to import around 60 million pairs of shoes annually," he said, adding that the concerted measures were needed to increase investment on the leather industry to absorb unexpected shock.

Tanzania currently uses only a fraction of the potential in leather industry while spending substantial amount of its scarce foreign exchange to import footwear and other leather materials from abroad. Other imports on leather products being bags and handbags, wallets and belts that can be made locally using the available raw hides and skin.

He said local entrepreneurs are given opportunity to make 30 millions pair of shoes annually out of 60 imports which could have made big difference to the economy and absorbed the shocks from the international markets.

Presently, the local manufacturers can make less than one million footwear annually. He said the sector offers huge potentials for local investors to develop the present smallscale leather factories as well as establishing the new ones.

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