A new online platform that is billed to boost leather trade within the East African Community block has been launched.
Dubbed leather industry network platform, the virtual centre will offer stakeholders and the public a reliable space to connect, interact and transact business to spur growth in the sector that is growing at an annual average rate of 1.5 per cent.
Billed as the ultimate gateway to the East African leather sector, it will also open opportunities to enable growth in the vast leather sector.
The Leather Industry Network (LIN) East Africa will serve as a one-stop shop for information on the sector, including facts and statistics, as well as other quantitative measures for assessing, comparing and tracking performance and production.
The platform offers an easy-to-use interface that helps industry players to build and manage their business portfolios, allowing consumers to connect conveniently with other market players in the regional leather sector, including manufacturers, agents and the government, thus eliminating middlemen.
Mr Charles Kahuthu, the regional coordinator and CEO of the East African Chamber of Commerce, Industry and Agriculture said the platform “was a game-changer in leather industry”
“Digital trading reduces paperwork, eliminate business bottleneck in exports, poor infrastructure, insecurity, increase market access,” said Mr Kahuthu during a recent webinar when the platform was launched.
“We expect that soon the trade of leather and leather products will multiply.”
Mr Kahuthu noted the chambers will work with national leather associations and their members to integrate them in other sectors in the economy. He added that the Covid-19 pandemic has allowed businesses to think outside the box with limited travel opportunities.
The leather sector is facing challenges due to several factors including a weak policy environment that discourages investment in value-added products, continued exports of critical raw materials and weak institutional arrangement in enforcing quality and standards in the value chain.
Trade among East Africa Community member states remains very low at about 20 per cent behind neighboring bloc, SADC, which is at over 40 per cent.
The African Continental Free Trade Area (ACFTA) – the first continent-wide free trade deal signed by African Heads of States – means all countries agree to try and trade more with each other reducing barriers like tariffs.
In Europe, for example, 70 per cent of trade happens within the continent. But, in Africa countries don’t trade with each other that much with only 16 per cent of trade is between African countries.
A free trade area is designed to boost that number, creating jobs and opportunities.
“The leather platform will serve as one of the pillars that ACFTA in EAC will be anchored upon. What should make us not increase the regional trade in EAC which stands at 20 per cent to at least between 30 and 40 per cent?” noted Mr Kahuthu.
Leather is the most traded agro-based commodity in the world, with an annual market value of about $200 billion, higher than the revenues generated from coffee, tea, rice, rubber, cotton and sugar combined.
Interestingly, the East African leather industry represents about 0.24 per cent of the $200 billion global market value, with annual revenues of $478 million, comprising $106.4 million in wet blue and $372 million in finished leather.
The industry’s share of the global market for leather contributes a modest 0.28 per cent of the East African Community’s GDP and is in decline, according to the EAC Leather and Leather Products Strategy and Implementation Roadmap for 2020-2030.
“This negative trend does not reflect the true potential in the sector, as resources such as the region’s large population of cows, sheep and goats – estimated by the East African Community Secretariat at 150 million animals in 2013 – are abundant, renewable and readily available,” said Beatrice Mwasi, the director of the Centre for Business Innovation and Training (CBiT).
Mr Elikana Epiche, CEO at Nairobi Leather and Textile Business Association noted that there is need for EAC to become a fashion icon offering ‘fashion tourism’ and supporting the community’s GDP.
“We want to see EAC become leather fashion and production centres and cities that can also offer ‘fashion tourism’,” said Mr Epiche.