The Sunday Mail
Trade Focus
Allan Majuru
THE production and export of exotic leather and leather products is one area where Zimbabwe is slowly developing a competitive advantage with the sub-sector supplying markets such as China, United Arab Emirates, United States of America, and South Africa.
Currently, a number of projects and programmes are being implemented to capacitate the value chain on the bovine leather component so that the whole value chain can be competitive in export markets and ultimately becoming a major player in the global leather industry. These programmes are meant to unlock capacities in developing countries, which are touted as the next leaders in the global leather value chain.
The International Trade Centre (ITC) notes that, “developing and emerging economies can now manage the whole supply chain on their own and are fast becoming the most important suppliers of value-added finished products.”
This is because production and supply are moving from industrialised nations to developed countries through transfer of knowledge, skills, and machinery.
This movement in levels of influence is also based on the need to fully develop products at the source of raw materials, which in turn reduces the final cost of finished products and allows for manufacturers to earn money.
In light of this, Zimbabwe stands to benefit from the changes in the global leather sector, riding on the growing cattle head, and existing enabling infrastructure.
Undoubtedly, Zimbabwe has potential to become one of the leaders in the global leather network, leveraging on the growing cattle heads, competent skills, and improved infrastructure.
To unlock this potential and increase their share of the international trade in leather, estimated around US$80 billion annually by ITC, there is a need for closer collaboration, and linkages among players across the entire value chain.
Already, the Government through the National Development Strategy 1 (NDS1) launched last year by President Mnangagwa, identifies the leather value chain as a key agro-processing priority area.
The national development blueprint notes that the leather sector is a low-hanging fruit given the country’s competitive advantage in livestock and crop production, which are key sources of raw materials.
The Government has already launched the Zimbabwe Leather Sector Strategy (2021-2030), which is expected to transform the leather sector from a producer of primary products to value added goods for domestic and export markets. Building stronger capacities through collaborations The overall goal of the Zimbabwe Leather Sector Strategy (2021-2030), launched in April this year, is to improve the “competitiveness of leather value chain through building stakeholders’ production capacities’ and improving their access to regional and international markets.” The objectives of the new strategy are to increase capacity utilisation of value-added products from 30 to 75 percent by the end of 2030; and enhance the application of sustainable production technologies by manufacturing companies from the current 10 percent to 60 percent by 2030.
The new strategy also envisages increasing the export of leather products from the current 10 percent to 40 percent of production.
In building better capacities, there is a need for stronger collaboration among sector players and improved linkages among stakeholders across the entire value chain.
Although some activities related to this are happening, more needs to be done to ensure speedy recovery of the leather sector.
For example, ZimTrade-the national trade development and promotion organisation-has been working with the Zimbabwe Leather Collective, which is an inclusive marketing approach that brings together key producers in co-ordinated production and supply of leather products for domestic and international markets.
The Collective was mooted to allow for sector players at different points in the value chain to come together and speak with a collective voice on common problems indigenous to the sector. In finding common solutions, the Collective works in unison to promote the Zimbabwe leather products at home and abroad.
The Collective has a digital marketing strategy, utilising a website as well as social media avenues such as Instagram and Facebook to promote interaction with domestic and foreign markets.
Through these activities, the Zimbabwe Leather Collective reduces cost of market development, seeks solutions to common problems and finds sustainable production processes that consider the comparative advantage of Zimbabwe against competition.
The case of the Zimbabwe Leather Collective is just one example of how synergies among players across the entire leather sector will help grow exports.
Need to address current challenges
Apart from improving sector linkages, growing leather exports also requires speedy solutions to current challenges faced in the sector.
One of the challenges is the current head of bovine animals, which the Zimbabwe Leather Sector Strategy (2021-2030) identifies as weaker compared to competition such as Ethiopia, Kenya, Uganda, South Africa, and Egypt.
Although focus should be drawn on increasing the national head, there is also need to concentrate on improving the quality of hides, which opens more opportunities for earning more revenue. The sector strategy already notes that Zimbabwe has better quality hides and skins in Africa. There is further need for the country to fully utilise its competitive advantage as a supplier of exotic leather and leather products that feed into a global niche market rarely affected by global recessions.
A significant portion of Zimbabwe’s leather exports is crocodile skins.
Encouraging more players to venture into the business is one way of improving the contribution of the sector to national exports.
Investment constraints have also been affecting sector development, which is dominated by small to medium enterprises.
To address foreign direct investment challenges in the leather sector, there is a need to establish vibrant working groups which will look into the ease of doing export business, conduct a mapping exercise to ascertain the financial support in each of the nodes in the value chain, and propose how these can be financed. Other challenges deal with animal husbandry techniques that have been identified as a leading cause affecting the quality of hides.
Current focus should be drawn to the severity of branding and branding techniques that have dominated cattle production.
Communal farmers, who own the largest number of cattle, are more concerned about the security of their cattle and branding of the hide instead of recommended branding on the neck of the animal.
Thus, there is a need to give incentives to farmers so that they take good care of the hide as presently, the abattoirs where hides are separated from meat, are only focusing on the weight of the beast.
Further to this, solutions should also be channelled towards improving the manufacturing sector, which is affected by antiquated machinery. Capital financing and developing Special Economic Zones around the leather sector will also help boost the production capacity, which in turn will help grow exports.
Allan Majuru is ZimTrade chief executive
