Use new quality standards to boost leather exports
By Mbugua Ng’ang’a
Value addition in the leather sub-sector holds great promise of positioning Kenya as a producer and exporter of quality products comparable to those manufactured in Ethiopia, which has stolen the thunder from Kenya.
With the neighbouring country rocked by regrettable conflict, which we all hope will be resolved peacefully sooner rather than later, Kenya has an opportunity to step up its game and claim its position as the region’s leading exporter of quality leather goods.
Every year, according to some estimates, consumers across the world spend Sh1.5 trillion on leather products and accessories. Kenya accounts for about Sh14 billion of that trade but has potential to earn much more given that 95 per cent of our exports comprise raw hides.
That means other countries buy our hides, process and re-export them as premium finished products. A good quality imported leather boot, for instance, costs Sh16,000 in Nairobi.
What this means is that we are not only exporting specialised jobs in tanning and production, but also literally giving away money that we badly need to shore up our economy. As such, the question of processing leather goods locally is not one of if but when we can stop exporting raw hides and use them to drive manufacturing in that sub-sector.
In his State of the Nation address, President Uhuru Kenyatta pointed out that the Ewaso Nyiro South Development Authority’s tannery, which is still under construction, processes about 840,000 square feet of finished leather annually, thanks in part to its partnership with the Kenya Meat Commission, which supplies it with hides and skins.
According to him, once the tannery is completed, it will produce about 1.2 million square feet of finished leather annually. This is, without a doubt, is the way to go if we are to transform Kenya into a middle-income economy within the next eight years.
Instructively, the sub-sector received a major shot in the arm in November when the Kenya Bureau of Standards Managing Director Bernard Njiraini gazetted 13 new leather quality standards that ought to make Kenyan leather goods competitive regionally and internationally.
Some of the new quality standards, such as those affecting leather for apparel, determination of heat resistance for patent leather or determination for softness have far-reaching implications for companies that operate in Export Promotion Zones (EPZs) or those that supply leather goods to militaries in the region.
Given that KEBS has agreements with other standards bodies in the East African Community, this gives Kenyan exporters an advantage because their goods will not need to be retested if sold within EAC.
And with African countries looking at the possibility of creating a larger market through the African Continental Free Trade Area, this can only translate to increased competitiveness for Kenya exports, and the attendant improvement in the country’s balance of trade.
It is instructive that a large proportion of Kenyan exports are manufactured by Small and Medium Enterprises, placing them squarely in the country’s economic growth nexus.
To benefit from increased exports of processed leather goods, we need to get three things right. First is for SMEs to adhere to the gazetted quality standards so that they can jump the queue when they arrive in their export destinations since they will not require retesting.
Second is that policy makers should put in place incentives to spur local leather processing to discourage export of raw materials. The third is to improve farm gate prices of livestock so that herders and farmers are incentivised to sell their cattle and goats.
It is discouraging to see thousands of livestock dying during drought because herders lack motivation to sell off their animals. This is a situation that can be rectified if government agencies responsible for livestock development can sensitise herders about the benefits of selling their livestock regularly, not only when they are contending with adverse weather.
That way we can build a vibrant modern economy even in arid regions which have been traditionally marginalised.
We will also need to build more tanneries across the country. Proposed sites for these have been mapped and the national government only needs to partner with beneficiary counties to create both the horizontal and vertical infrastructure that will turn these plans into factories and shops.
This will necessitate partnerships with technical training institutions so that they can churn out more experts in leather value addition.
— Story The writer is a Partner and Head of Content at House of Romford —[email protected]
