Leather is one of the world’s most widely traded commodities. The trade in leather and leather products — worth more than US$ 60 billion per year — is predicted to grow. The African leather sector is bursting with potential, but there is a wide gap between resources and production. ITC’s development programme has galvanized the sector. Trade in hides and skins, and semi-processed, tanned leather goods is lucrative business. This is particularly the case for some developing countries where the dynamism of the sector has led to a move up the value-added chain and strong market positions. As a result, developing countries hold a 45% share of world trade in leather manufactures. Many have substantially increased their share of world footwear production in relation to developed countries. To address the issues behind these statistics, ITC, with financial support from the Netherlands, launched its Integrated Leather Sector Export Development Programme for Africa in 1997. Seizing global market opportunities is a key challenge for the African sector. Important steps have been taken over the past seven years — a foundation has been laid, the cornerstone of which is African partnership. Successful development of the sector could help reduce poverty in rural areas. As a labour-intensive industry, it is an important source of employment across the patchwork of its pan-continental supply chain. Because of the backward and forward linkages in the chain, Africa can be both a source of raw materials and an exporter of finished goods. A Blueprint for the African Leather Industry is a report commissioned by the UN Industrial Development Organization and jointly prepared by ITC, the Food and Agriculture Organization and the Common Fund for Commodities. It identifies Africa’s potential and makes recommendations to players in the supply chain — governments, the private sector and international organizations. The report is the outcome of the “Meet in Africa 2002” meeting that brought together 25 African experts in Tunis.
Yet Africa shows only a modest increase. Import penetration of the domestic leather footwear markets by other developing countries is an estimated 73%. Leather and leather products generally account for less than 4% of total exports. The numbers tell the story: African countries have 15% of the world’s cattle and 25% of its sheep and goats, but produce only 14.9% of global output of hides and skins — 8% of bovine hides and 14% of sheep and goat skins. Exports of hides and skins have fallen in recent years to below 4%, yet leather is ranked very high as an export commodity in several African countries. The countries’ tanning capacity has fallen from 9.2% to 6.8%. At the same time, the livestock population has jumped about 25% over the last decade, faster than the world trend.Mind the gap!
Leather is a leading export for many African countries. The gap between resources and production is wide, but exposes the potential of the industry. Reducing the gap is critical in this important sector, which is strategic for economic and industrial development. By boosting exports, the entire continent stands to benefit. Because leather is a by-product of the meat industry, the supply chain begins with animal husbandry, the lifeblood of many rural communities.
