President John Pombe Magufuli requested the Ethiopian President Sahle-Work Zewde to enable Tanzanian investors in the livestock sector to invest in Ethiopia in order to facilitate learning from their counterparts….
By Patrick Kisembo for TZ Business News, (Article Written January 27, 2021, a Few Days Before the Author Died of a Breathing Complication)
The Ethiopian President Sahle-Work Zewde and Tanzania’s President Dr. John Pombe Magufuli held talks at Chato in Geita Region, where one of the topics in focus became livestock and the leather industry.
The two Presidents of Africa’s leading livestock keeping countries held talks on trade and investment and it would have been a strange surprise if President Magufuli had not brought up the subject of cows; the President tended cows as a young person and was born and raised among the Sukuma, a tribe extremely passionate about cows.
The Tanzania government has been encouraging investments in the industrial sector. It has opened doors for investors in various sectors, among them the livestock/leather sector–which is seen as producing below capacity despite Tanzania being Africa’s number two largest cattle keeping country. Ethiopia leads the continent.
While Ethiopia has a well-developed leather industry, led by Small and Medium-scale Entrepreneurs (SMEs), making it one of the most vibrant manufacturing sectors which exports finished leather products, Tanzania does not benefit as much from the sector. Ethiopia is currently Africa’s leading economy with an annual growth rate of 9%.
Tanzania accounts for about 1.4 per cent of the global cattle population and 11 per cent of Africa’s cattle population (FAO 2014).
It has about 30.5 million cattle, 18.8 million goats and 5.3 million sheep. Other livestock include; 1.9 million pigs, 38.2 million local chickens and 36.6 million improved chickens, according to Luhaga Joelson Mpina , former Minister for Livestock and Fisheries.
Tanzania’s Livestock Master Plan 2017/2018 – 2021/2022 indicates the livestock sector contributes around 6.9 per cent of GDP but this contribution is way below capacity.
The sector in Tanzania faces many challenges including low genetic potential, feed and water resources, diseases, land conflicts, lack of value addition of livestock priority commodities, increased postharvest losses, lack of quality processed products for local and international markets and illegal trade of livestock and livestock products.
Ethiopia’s vast experience in developing its leather industry could be tapped through co-operation according to analysts. With their co-operation history tracing their roots back in the 1960s, Tanzania and Ethiopia have continued to strengthen their relations in different areas. The leather industry could just be another area of co-operation.
Statistics from the National Bureau of Statistics indicates that Ethiopia has over 60.39 million cattle, while Tanzania holds second position at 33.9 million cattle.
Tanzania’s Small and Medium Scale Entrepreneurs could benefit if they took a leaf from their Ethiopian counterparts, particularly their vast experience in the establishment of a strong export oriented leather industry in this north East African nation.
Finished leather products would benefit Tanzania most. In order to achieve this , the country needs to invest heavily in the leather and leather products up to the finishing and manufacturing stage where small, medium and large scale entrepreneurs can put into the market finished products like bags, luggage handbags, saddlers etc.
Tanzania has not created internal markets for semi-processed leather and very little for finished leather products because of competition from imported used and synthetic products.
The Acting Director of Production and Marketing at the Ministry of Livestock and Fisheries, Steven Michael, was quoted saying at least 50 million pairs of shoes are being imported into the country annually.
Further he noted that locally produced shoes by both large industries and small and medium entrepreneurs (SMEs) is only 1.2 million pairs annually.
“We don’t produce much because our leather is of low quality and we also face a scarcity of trained personnel. However, we have developed a strategy to improve our hides and skin with a view to producing quality leather of grade I-IV to be able to invite both local and foreign investors to invest in the sector,” he was quoted as saying.
During their talks, President Magufuli requested President Zewde of Ethiopia to enable Tanzanian investors in the livestock sector to invest in Ethiopia in order to facilitate learning from their counterparts.
Previously, Tanzania had started initiatives to invest and revive the leather industry by inviting investors from Egypt to help breathe life into the country’s tanning industry.
That initiative came as a result of a meeting between presidents Magufuli of Tanzania and Egypt’s Abdel Fattah El-Sisi in Addis Ababa, Ethiopia. This website has not yet been informed about the status of this Egypt-Tanzania initiative but a follow up will be made.
Tanzania’s leather and leather products industry is very underdeveloped, where much of her locally produced skins and raw hides are exported. President Magufuli has urged Tanzanians to start consuming locally produced leather products more, apparently in the hope to encourage development of the industry.
Tanzania’s leather industry offers immense untapped opportunities for which SMEs can utilize to establish small industries which could contribute to job creation and economic growth.
Tanzania Livestock Master Plan 2017/2018 – 2021/2022 says the country’s tanning industry has the total installed capacity equivalent to 104 million square feet per year, which can utilise 86 per cent hides and 61 per cent skins.
The Masterplan explains, however, that the leather sector remains weak and most of the exports are in the form of traditional products such as raw and wet-blue hides.
“Owing to the inadequate quantities and quality of raw hides and skins, tanneries are operating well below installed capacity.
“However, the expanding domestic and international markets point to immense investment potential for this sector,” the Livestock Master Plan 2017/2018 – 2021/2022 aludes.
“Efforts need to be made to increase the domestic supply of raw materials by among others, increasing the capability and scale up of the small-scale industry to provide secondary markets for large firms and by supporting local entrepreneurs,” the master plan explains.
“We are looking to revive the defunct leather industries and establish new ones to process and utilize the millions of skins produced in Tanzania every year,” said Mwijage, Tanzania’s former minister for trade and industry.
But analysts suggest that Tanzania must improve its investment climate in the sector to attract not only investors from African leading leather producing country Ethiopia, but also from other world leather producing nations.
The entire livestock value chain from skin and hides to leather and leather products is a potential investment area for domestic and exports markets–which could benefits anyone who puts their money in the sector– be they local or foreign investors.
Hopefully this was the message carried home by the Ethiopian leader as she returned to her country.