By Clifford Akumu
The launch of an industry network developed to boost trade in leather and its products among the East African Community (EAC) member states is a boon for farmers.
The new platform offers stakeholders and the public a reliable virtual space to connect, interact and transact business. Currently, the industry is growing at an annual average rate of 1.5 per cent, and this is expected to shoot up under the new platform.
Dubbed, The Leather Industry Network (LIN) East Africa, it is a one-stop shop for information on the East African leather sector, including facts and statistics, as well as other quantitative measures for assessing, comparing, and tracking performance and production.
The platform offers an easy-to-use interface that helps industry players to build and manage their businesses. It enables consumers to connect with other market players, manufacturers and governments in Kenya, Uganda, Tanzania, Burundi and Rwanda, eliminating unnecessary intermediaries.
“Digital trading reduces paperwork, eliminates business bottlenecks in exports, poor infrastructure, insecurity and increases market access,” Mr Charles Kahuthu, the regional coordinator and Chief Executive Officer of the East African Chamber of Commerce, Industry and Agriculture, said during the launch.
He said the platform was a game changer that was expected to increase trade in leather and leather products.
The chamber will work with other national leather associations and their members, to integrate them into other sectors of the economy.
“The Covid-19 pandemic has allowed businesses to think outside the box with limited travel opportunities,” said Mr Kahuthu.
The leather sector is faced with policy challenges that discourage investment in value-added leather products, and exports of critical raw materials. There is also weak enforcement of quality and standards in the value chain.
“The leather platform will serve as one of the pillars the African Continental Free Trade Area (AfCFTA) in the EAC. What should make us not increase trade in EAC, which stands at 20 per cent, to at least between 30 to 40 per cent?” Mr Kahutu posed.
The recently signed AfCFTA is the first continental free trade deal encouraging African states to trade more with one another by reducing barriers such as tariffs.
Trade among the East Africa Community member states remains low at about 20 per cent, compared to the South African Development Community (Sadc)’s more than 40 per cent.
Leather is the most traded agro-based commodity in the world, with an annual market value of about $200 billion. This is higher than the revenues generated from coffee, tea, rice, rubber, cotton and sugar combined.
Interestingly, the East African leather industry represents about 0.24 per cent of the $200 billion global market value, with annual revenues of $478 million, comprising $106.4 million in wet blue and $372 million in finished leather.
The industry’s share of the global market for leather contributes a modest 0.28 per cent of the region’s gross domestic product and is in decline, according to the EAC Leather and Leather Products Strategy and Implementation Roadmap for 2020-2030.