Industry Minister Mike Bimha

A FIVE-YEAR Zimbabwe National Leather Development Strategy (ZNLDS), launched in 2013, has not turned around fortunes in the leather sector as current indications are that the situation has further deteriorated.
Since the turn of the millennium, the leather sector has suffered great losses prompted by the country’s operating environment, making it difficult for companies to remain operational and competitive.
Hence in a move to resuscitate the sector, the Ministry of Industry and Commerce launched the five-year revival plan outlined in the ZNLDS.
The 85-page document sought to position the leather industry and allied sectors of the economy towards exports and international competitiveness, while ensuring that Zimbabwean firms and households enjoyed continued access to a wide range of high quality goods.
The strategy was aimed at improving market intelligence and access to finance by adding value to the raw materials.
Premised on five objectives, the ZNLDS sought to create an apex council at national level which would deliberate and articulate issues affecting leather sector players; facilitate the provision of capital; access to information and markets; avail raw materials and create clusters across the nation.
However, a few months before the end of the strategy’s lifespan, the viability of the leather sector has been further undermined and is worse than before the launch of the strategy five years ago.
Accidelio Nyamayaro, the Harare Leather Cluster assistant chairperson, said they were still being impeded by financial challenges and that there had been no growth since 2013.
“Despite the measures taken, we are still unable to boost productivity since unlocking of capital from financial institutions is impossible due to the fact that we are required to provide immovable property as collateral. Getting equipment in the form of raw materials and machinery is still a mammoth task due to lack of finance,” he said.
In 2014, government introduced a US$0,75 levy on raw hide exports in a move that was expected to boost value addition in the leather industry and curtail the exportation of raw hides by local abattoirs.
But Finance and Economic Development Minister, Patrick Chinamasa, recently granted a tax waiver to raw hide exporters.
He listed seven merchants with a total export quota of just over 1,5 million kilograms worth about US$10 million as the beneficiaries.
When the tax was introduced in 2014, the Livestock and Meat Advisory Council pointed out that it had a negative impact on the viability of abattoirs.
The council alleged that tanners were unable to buy raw hides from abattoirs due to lack of finance hence the tax had not helped to lift the local leather sector but instead, it impacted negatively as raw hides stocks which continued to pile up, prompting huge losses for operators.
The Zimbabwe Leather Development Council chairperson, Clemence Shoko, said challenges beyond government’s control were to blame for the strategy’s non-performance.
“The perpetual economic challenges which have bedeviled the country since the turn of the millennium are to blame for the partial failure of the strategy.
“However, there have been sound success stories as we managed to create clusters for leather processors in the country. As outlined in the strategy, we managed to create the Zimbabwe Leather Development Council which shall be the precursor to the leather processors apex council,” he said.
Shoko noted that they had managed to access information and markets on the leather industry by participating in a number of conferences and hinted that through the cluster formations, accessing loans would be easier in future because processors would be approaching financial institutions as registered associations.
However, a trader in the leather sector, Owen Taruvinga, dismissed the claims, saying while government appeared to be in support of the sector, there was clear lack of commitment evidenced by not setting aside a specific budget for the sector.
“We have never heard the Finance Minister setting aside a substantial amount of money to be invested in the leather sector. The little assistance we have received so far is in the form of donations from well-wishers such as the European Union and the Common Market for Eastern and Southern Africa,” Taruvinga said.
He noted that the failure of the strategy was prompted by failure to avail training in modern technology trends to enable the leather producers to manufacture high quality products that are competitive on the world market.
But Industry and Commerce Minister, Mike Bimha, expressed optimism over the strategy’s potential in turning around the fortunes of the country’s leather sector.
“It is common that in all the strategies, we can never achieve everything but since it is still in progress I believe that if we collectively put pressure, at the end of the day the set objectives will be realised,” he said.

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