With the implementation of the African Continental Free Trade Area (AfCFTA) agreement expected to commence in July this year, some trade experts are projecting the leather industry – being one of the world’s most widely traded commodities – to propel a major boost in trade and investment among countries.
Primarily, Ghana is endowed with abundance of animals -basically cows – for the leather industry to see major boost. However, the technologies to turn these animals skin into leather to supply both the local and international markets are scarce in Ghana.
When fully utilized to harness its potentials, imports of leather products such as footwear, automobile seats, clothing, bags, fashion accessories and furniture among others would witness significant reductions.
Currently, the global market value for leather is worth US$251.77 billion. The industry is expected to grow at a significant rate from 2019 onwards as the market value for leather is projected to reach US264.36 billion in 2020 and US$271.21 billion in 2021 at Compounded Annual Growth Rate, according to forecasts by Statistics Portal. With regards to the African market’s share, the International Trade Forum Magazine also estimates the leather and leather goods industry to be over US$60 billion per annum.
It is estimated that Africa has more than 15 percent of the world’s cattle population as well as about 25 percent of the world’s sheep and goat population. These statistics put the continent potentially at the centre of the booming leather industry as a key supplier of hides and raw materials.
Despite this, Africa accounts for just eight percent of world production of cattle hides and about 14 percent of goat and sheepskins. Thus, some trade experts have described Africa’s leather industry as unorganized and a yet to be harnessed sector as the potentials have not been tapped.
With regards to the coming into effect the AfCFTA, which seeks to promote the volume of trading activities among nations, a number of countries in the Eastern hemisphere such as India, are looking for new and emerging markets outside their domain to satisfy the volume of demand for leather and hides from African countries.
To deal with the issues affecting the sector, the Textiles, Garment and Leather Employees Union (TGLEU) was one of the stakeholders to partake in the nationwide consultation exercise in 2018 aimed at developing a comprehensive and integrated reform programme to provide sustainable solutions in the manufacturing sector.
As measures and policy direction to raise standards in the sector, government has committed to provide support and incentives to local manufacturers to improve on their competitiveness as well as attracting foreign companies to locate in Ghana and invest in the sector.
However, a chunk of Ghana’s meat and hide that would have gone into the leather industry rather go into “wele”- a local meat delicacy, leaving a number of the manufacturers resorting to importing leather from either Ethiopia or Kenya.
By Dundas Whigham
