Ethiopia globally is placed number ten in terms of livestock endowment, hence position her as a potential global leader in the production of leather and leather products. The winds of industrialization are blowing towards Africa, as China moves notches up to the technology based economy. Ethiopia is well endowed with livestock, which is a foundation of developing the Leather Sector, once the necessary technical, economic, human and infrastructure resources are put in place. Ethiopia had 53.4 million cattle, 25.5 million sheep and 22.7 million goats (CSA, 2011). The livestock population increased to 56.7 million, 29.3 million and 29.1 million for cattle, sheep and goods respectively. (CSA, 2014/15).
In the period 2010-15, the product mix of the industry changed from focusing in the production of crust to finished leather, footwear and gloves production. The total output target of GTP I was US$1.7 billion, however the industry only earned US$472.2 million that translates to 73% negative variance. The underperformance was attributed to: a shortage of sufficient and quality hides and skins; inadequate managerial capacity across all the functional areas; limited technology utilization and resource optimization; limited access to finance; long lead times in the importation of chemicals and accessories; limited preparedness to meet the minimum export requirements of finished leather; low factor productivity and low margins from the export of footwear among others.
The Government of Ethiopia has been proactive in supporting the development of the leather sector through the use of policies, institutions and incentives. Towards the end of 2015, the Ministry of Industry officially requested COMESA/LLPI to facilitate the formulation of a five year strategy, whose main objective is to transform the sector into a dynamic and globally competitive sector. In order to come up with a strategy that responds to the key fundamentals, that will unlock value through boosting competitiveness and productivity of the sector, COMESA/LLPI has employed a blended methodology, which included face to face interviews, participatory workshops and experts review with stakeholders and actors in the value chain. The key milestone activities included the following:
- Face to face interview with value chain actors, this was done jointly with Leather Industry Development Institute;
- National Stakeholders Workshop, which was held in Addis Ababa; which reviewed the various issues that impacting negatively on the performance of the industry;
- Experts Group retreat, which was held in Debre Zeit : the team of experts was drawn from Government, Private Sector and COMESA/LLPI.
The above activities have greatly assisted in ensuring the crafting of a strategy, which seeks to identify the key issues, opportunities, threats and design practical intervention which will catapult the leather sector to the top league globally.
It is imperative to note that the new strategy, which is currently being finalized, is flexible and dynamic and has an inbuilt review mechanism. The dynamism and flexibility of the strategy is based on its strategic objective, which are “process objectives” and are supported by SMART sub objectives, which are reviewed yearly during the design of the annual work plan. The dynamism and flexibility is a recipe for ensuring that the strategy responds to the face moving global economy, whereby things are changing at a speed never experienced in the history of mankind. In addition, this the strategy has a strong strategic fit with the Growth Transformation Plan (GTP).
The future of the Ethiopia Leather Industry looks bright given the interest, which has been shown by the Government to support the industry, growth in both domestic and FDI investments and also the rapidly expansion in the consumption of leather and footwear leather products. The time for the revolution of the leather industry in Africa, is now and Ethiopia is ready to lead.
