Tanzania can make enough footwear for local market

SEBASTIAN MRINDOKO

TANZANIA can produce more than 50 million footwear annually from its abundant raw hides and skins if envisaged plans to revive the country’s leather industry succeed, according to an expert in leather industry.

Leather Association of Tanzania (LAT) Executive Secretary, Mr Joram Wakari, said that Tanzania currently use only a fraction of its potential in leather industry, which is wasted as the country uses it scarce resources to import footwear and other leather materials from abroad.

“Our export earnings from semi processed leather materials are disproportionate with the substantial amount of foreign exchange spent in importing shoes, mostly plastic made which are healthy and environmentally hazardous,” he told the ‘Daily News’ in an interview.

Tanzania is second in Africa after Ethiopia with highest livestock population of more 22 million cattle, 16 million goats and seven million sheep. Ethiopia is the leading producer and exporter of leather products in Africa.

Currently, Tanzania spends substantial amount of its scarce foreign exchange to import around 50 million shoes annually. Other imports on leather products include bags and handbags, wallets and belts that can be made locally using the available raw hides and skins.

Mr Wakari said the association supports President John Magufuli’s industrialisation drive and plan to revive leather industry as unveiled in his inaugural speech of the Parliament.

Dr Magufuli expressed preference on labour intensive industries that use locally available materials to produce products that are massively consumed in the country, with the target being to have industries contributing 40 per cent of jobs by 2020.

Mr Wakari said with present raw materials, Tanzania can make more than what is imported on footwear and surplus made available for exports. 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 small scale leather factories as well as establishing the new ones.

There should be special incentive package to make available loans and tax exemptions on some raw materials used in footwear manufacture. While more support is given to local leather manufacturers, some fiscal measures should be taken to increase tax on exports on semi- processed leather materials, hiking to 100 per cent import and excise duties on imported leather products as way of discouraging it.

The Confederation of Tanzania Industries (CTI) Director of Policy and Advocacy, Mr Hussein Kamote said Tanzania can discourage import of goods that can be made available locally by hiking import and excise duties without breaching the World Trade Organisation (WTO) agreements.

“Off course we can not stop everything linked with international trade but some fiscal measures like increasing import and excise duties aimed at protecting domestic industries may be imposed without breach of WTO agreements,” he said.

Mr Kamote said emphasis should be on small-scale leather factories that can grow gradually into big industries only if the government put conducive environment including special incentive packages.

Also efforts should be directed to stop smuggling of hides and skins for sufficient raw materials for such industries. Local manufacturers may be given quality standards to make boots and shoes for the army forces which is a huge tender and could boost their capacity and expand business.

Such measures could boost the sector’s contributions to the Gross Domestic Product (GDP) which is currently lying at around 4 per cent.