Ban raw hides exportation, government urged

THE National Competitiveness Commission (NCC) has urged Zimbabwean authorities to ban the exportation of raw hides to support value addition in the leather industry, which has been billed as a key prospect for the country’s export diversification.
In a recent report, the NCC said value addition in the leather value chain will enhance the industry’s competitiveness both regionally and globally.
“Hides should be exported at the wet blue stage or by setting a local quota that must be satisfied before exporting,” read the report.

“Currently, good quality hides are being exported, thereby depriving the local market and negatively affecting the competitiveness of locally made finished leather products in regional and international markets.”
A number of countries in the region and beyond have instituted export bans on raw hides, including Egypt, Nigeria, Rwanda, and Belarus.
“In these jurisdictions, this measure has tremendously assisted in ensuring that the local industry is not starved of quality hides, thereby enhancing the competitiveness of the sector,” NCC said.
According to the United Nations Development Organisation, leather is one of the most widely traded commodities, with growing world trade, currently estimated at more than US$100 billion a year.
In 2020, Zimbabwe was ranked 167 and 73 out of 195 countries in terms of exports and imports of raw hides and skins, valued at about US$2,7 million and US$31 million, respectively, indicating that the country is a net importer of hides and skins, hence, the need to eliminate this trade deficit.
Recently, ZimTrade revealed that the country is importing about 12,8 million pairs of shoes annually, effectively losing thousands of jobs to foreign nations despite having the potential to satisfy the local market.
The latest trade statistics show that Zimbabwe requires approximately 14,3 million pairs of footwear per year, made of leather, canvas, synthetics and plastic.
With current annual production estimated at one million to 1,5 million pairs per year, 12,8 million of the country’s footwear requirements are being imported.
The NCC report noted that limited access to foreign currency for retooling, importation of spares, chemicals and other critical inputs in the production process, has also negatively impacted the competitiveness of the leather sector.
This is worsened by the 25 percent foreign currency retention, as industry players opt not to export, as there is very little, or no incentive to do so.
“Furthermore, the 25 percent liquidation requirement on all export receipts results in loss of value for exporters due to exchange rate variations, thereby further affecting the competitiveness of the value chain,” NCC said.
Zimbabwe is among the top ten leather products exporters in Sadc and Comesa, according to the NCC, despite facing a myriad challenges, such as weak coordination within the sector, high cost of production, and antiquated machinery, among