Uganda currently produces 1.1 million bovine hides and skins annually and more than 95% in the raw, gaining the country $11 million but losing it an extra $139 million if the hides were to be processed and value added.
According to Hirani Niraz, a leather industry specialist: ‘We only earn $11 million, yet if we were to add value through the exportation of finished products the country would earn $150 million.’
‘Uganda imports 15 million pairs of shoes on an annual basis and on average a pair costs Shs50,000, so Shs7.5 billion is spent on importation’, said Dr Sam Kiruthu from the East Southern Africa Leather Industries Association.
Because of this huge loss, stakeholders from the leather sector have called on the government to intervene and implement a leather sector policy, which will attract more investment.
This is one of the recommendations to be presented by the leather sector to President Yoweri Museveni on March 31 when he meets the Presidential Investors’ Round Table. They were formulated during a meeting organised by the Uganda Investment Authority for all the stakeholders in the sector titled: Value addition and growth of the leather sector in Uganda which was held at the Grand Imperial Hotel on March 21.
In his presentation, the former minister of finance, Gerald Ssendaula, a director at Tannery and Leather Improvement Uganda Limited in Masaka, said among other issues to be raised for the development of the sector is the creation of a body that will constitute competent people who will be responsible for grading leather.
‘It is unfortunate that even the 15% export tariff government levies on each kilogramme of raw hides and skins imposed three years ago to encourage local dealers to add value is not being implemented. This has led to the classification of Uganda’s leather as reject because at the international market it fetches 25 cents of a dollar meant for rejects instead of the 83 cents of a dollar per kilogramme’, Ssendaula said.
Uganda only has two tanneries for bovine and one for fish skins with an installed capacity to process up to 7.8 million square feet. The Uganda Revenue Authority was assigned to strike a balance in which all stakeholders would be allowed to export wet-blue.
