Rwanda is missing out on over $170 million per year from exports of finished leather products for not having factories that process hides and skins into fine leather.
However, the larger East African community suffers the same fate. According to participants at the recent meeting of Comesa Leather and Leather Products Institute, the East African Community has continued to under-exploit its leather industry despite increasing local demand for leather products.
With a population of over 169 million people, says the institute, the region has a demand for leather footwear standing at 126 million pairs per year. However, local production of footwear remains negligible and of poor quality, but even combined with imported footwear, a deficit of over 70 million pairs remains.
“Across the region, there is unavailability of adequate skills and knowledge, unsupportive operational environment and law standards in branding locally produced leather products,” Prof Mwinyikione Mwinyihija, executive director of Comesa LLPI said.
Experts also say that Rwanda should pick lessons from its neighbours, particularly Kenya, which currently boasts a more advanced leather sector with 15 tanneries and over 100 SME’s dealing with footwear and leather goods manufacturing.
“The learning point from Kenya could include understanding the market stratification, product development, SMEs operationalization, value and supply chain management and existing support service such as research and development including their extension service designed for the leather sector,” Prof Mwinyihija said.
Stiff regional competition led to the closure of Rwanda Leather Industry Ltd in 2009, which had produced wet blue skins since 1989 as the country’s sole leather refiner. Before the firm was closed, Rwanda earned about $5 million in exported leather goods in 2005, and had projected to reach $12.6 million by 2012.
Last year, the country commissioned a new firm, Kigali Leather Ltd, which is still in its early stages and without raw materials.
Minister of Trade and Industry François Kanimba said that though the country has not kept pace with substantial growth of leather products in other developing regions, the potential of its leather sector remains unexploited.“But there has been encouraging signs previously in terms of investments in refining leather,” he said.
“Kigali Leather Ltd is working and we are engaging other investors in processing finished leather products. The challenge now is to find professional investors to invest in vertically integrated tanneries and leather products,” he added.
Exporting raw hides and skins is “wastage of resources” especially considering that Rwanda and the region have enough to produce finished leather and become internationally competitive, according to Comesa.
Rwanda’s Exports Promotion Strategy stipulates that locally made leather products would be a powerful branding tool for its “made in Rwanda” campaign.