Kenya's leather industry is losing out because we don't add value

In just a week’s time, Kenyans will be celebrating its golden jubilee as a free nation. This is the time they should reflect on how far they have come and how far they want to go in the next 50 years.

In the last five decades, Kenya has largely depended on food agriculture for its growth and development. Each year, farmers have looked forward to a greener harvest. However, there are times when these hopes have been thwarted by drought, leading to dependence on relief food.

However, there is one industry that can never suffer whether it rains or shines — the leather industry. Livestock will be slaughtered or die at one time or the other.

If it rains, they will be well-fed, awaiting the day of slaughter, and if it shines, they will die and their hides and skins will still be useful.

Isn’t it right then to say that we need to focus our energies on this industry that does not depend on the vagaries of weather for growth?

Climate change is real, and it is time we, as a country, looked into the future and developed industries that are not climate-dependent.

However, this is not to say that we abandon food agriculture altogether; it is still essential for our growth.

The leather industry has never earned what it should, because there is limited value addition on the raw products before export.

The government has, in the past, come up with measures like increasing export duty on raw hides and skins, as well as budget allocations for development of tanneries in rural areas.

These steps have helped to discourage export of raw hides and skins and boosted the sector because there is semi-processing of the products before export. Value addition on hides and skins could more than double the earnings.

Presently, the leather sector contributes about Sh10.6 billion to the country’s economy and employs at least 22,000 people.

This impact on the economy is achieved through contributions made by the leather value-chain players, who include traders in hides and skins, tanners, chemical manufacturers, as well manufacturers of leather goods and footwear.

If proper strategies and policies are put in place, we can increase this to Sh115 billion and employ another 8,000 people.

We are getting a raw deal in this industry because the sector’s value chain is currently dominated by export of raw and semi-processed material, partly due to the weak position of our manufacturing sector.

As a government, we are encouraging value addition before export to increase income, but it is time we stopped importing cheap footwear and instead produced our own.

We want to implement the 100 per cent ‘Buy Kenya Policy’ by supplying footwear to such institutions as the disciplined forces, security firms and health services.

We are also looking into policy intervention to encourage value addition by imposing levies on raw hides and skins progressively in a span of three years. Levies on raw hides, skins and Wet Blue will be reviewed, while imported synthetics and second-hand shoes will be discouraged.

Duty on imports of second-hand shoes will be charged per pair as opposed to the weight per consignment, and we will register all hides and skins traders at county level to facilitate good service delivery to players in the leather value-chain, as well as provide incentives to local investors.

Processing hides and skins to finished leather and leather products fetches value addition of up to 1,000 per cent. If we can nurture and grow this industry, Kenya has the potential to join the global supply chain for high-quality leather products instead of just being an exporter of raw hides and skins.

Contrary to popular belief that our hides and skins only come from cattle, goats and sheep, we also have camels, farm ostriches, farm crocodiles and fish, contributing to the raw material resource base.

Annually, we produce, 2.5 million tons of cattle hide, 5.4 million tonnes of goatskin, 2.7 million tonnes of sheepskin, 500,000 tonnes of camel hides, 1000 tonnes of crocodile skins, 500 tonnes of ostrich skins and 400 tonnes of fish skin.

Let us, together, revive our leather industry.

Mr Mohammed is the Cabinet Secretary for Industrialisation and Enterprise Development