Tanzania’s total value of imports for all types of leather and leather products is estimated at USD 13.3 million. This figure has grown at a CAGR of 8% between 2016-2020 (14).

The Tanzanian footwear industry has a production capacity of 300,000 pairs per annum, while the footwear demand is estimated at 46.8 million pairs per annum. The gap between production and demand is filled by imports, mostly from China, Kenya, the United Arab Emirates, South Africa and India (5).

Tanzania has around 28.8 million cattle, 5 million sheep and 16.7 million goats (26). Tanzania has the second largest livestock production in Africa. The leather processing potential could be harnessed through the development of footwear clusters and industrial parks (4, 7, 8).

10% – 15%

Medium Term (5–10 years)

Two Italian companies, Toscana Machine Calzature (TMC) and ItalProgett, which have invested USD 24.5 million in two leather factories in Moshi area, expect to break even in year four and realize incremental financial return thereafter (11).

USD 1 million - USD 10 million

Despite Tanzania’s significant capacity of raw material, the country is currently processing leather only up to the “wet blue stage”, which is considered a raw product in international trade. The domestic transformation to finished leather or crust is very minimal at 5-10% of total activity (13).

Despite its huge economic transformation potential, the leather sector in Tanzania, faces a number of supply side challenges including: lack of enough quality hides and skins for the tanning industry; absence of a proper grading system and price premium based on quality; slow modernization processes and lack of enough trained staff which hinder tanneries’ performance. Also, the slaughterhouse operations need to be professionalized and modernized (4)

Water consumption and water pollution are key environmental challenges for the leather Tanzanian industry. Overall, the industry actors have limited knowledge of environmental tanning techniques. The sector is also faced with difficulties in effectively implementing an environmental policy framework (4).

High value leather manufacturing creates significant numbers of jobs as the leather sector overall is labour-intensive, providing strong job-creation benefits. The activity has scope for innovation to cater for fast changing customer needs in the footwear and other leather products. The leather sector is therefore a basic “starter” sector for industrialization in Tanzania (13).

Through high value leather manufacturing, Tanzania moves towards utilising its potential of producing about 90 million square feet of leather with its available raw material. If two thirds of this amount was to be further processed, at least 20 million pairs of shoes and over 2.5 million pieces of assorted leather goods could be locally generated (13).

Investment in modern leather processing activities will lead to increased knowledge and adoption of environmentally sound animal husbandry practices, slaughter and tanning techniques and effluent treatment practices (2, 4, 7, 10).

People: The general population obtains access to affordable, durable and high quality footwear and other leather products. Skilled and unskilled labour force members get employment opportunities at various stages of the value chain.

Gender inequality and/or marginalization: Women and youth gain employment opportunities in the processing activities.

Planet: The planet will be free from toxic gases produced through the use of chrome in tanning. Chrome is cost-effective but is also one of the most toxic tanning methods

Corporates: Livestock holders receive strong domestic demand, leather processing companies obtain new markets for their products.

Public sector: The government benefits from greater domestic value addition and enhanced export activities towards industrialisation and regional integration.

Planet: Sustainable processing of leather products will impact knowledge to tanneries on new tanning tech-niques and technologies, including vegetable, wet-white and improved chrome tanning. This will minimize the use of toxic tanning method.

Corporates: SMEs and artisanal operators enjoy access to horizontally integrated footwear clusters producing high quality shoes and sharing common facilities and markets.

High value leather manufacturing may create large scale pollution if there are no deliberate efforts to develop shared effluent treatment infrastructures for the processing activities.

The limited availability of high quality skins and hides due to poor animal husbandry, flaying technique and abattoir management may limit the availability of sufficient levels of raw material, which would impact the scale and depth of the expected impact.

If no deliberate efforts are in place to enhance the skill base of casual labourers, women and youth, as required by the a specialized activity like leather manufacturing, the processing activities may provide opportunities to those already served and hence limit the expected impact.

Third National Five-Year Plan (FYDP 3): Classifies the leather sector as a “lead sector”, as is the case for the textiles sector, which qualifies tanneries and producers of footwear and leather goods for financial incentives (5, 10).

Leather Sector Development Strategy (2016-2020): Emphases on the conditions for developing a favourable expansion of the industry so as to contribute to overall socioeconomic development. It calls for synchronization of activities across the public sector, private sector, and non-governmental organization communities in order to create sustainable results. The Vision of the Strategy is that by the year 2025, the Tanzania will produce high-quality hides and skins processed to finished leather, footwear and leather goods for domestic and export markets while protecting the environment (4).

The National Export Strategy 2009: Highlights leather and leather products as a target sector for Tanzania. Specific focus is on: improving the marketing delivery infrastructure for livestock and all associated products; establishing a system that ensures consistent produc¬tion and quality for all livestock products ; expanding livestock plants’ processing capacities; and creating a larger range of livestock products produced in the United Republic of Tanzania (4,29).

The Integrated Industrial Development Strategy 2011: Leather and leather products are a targeted subsector of the Integrated Industrial Development Strategy. It sets the targets of eliminating exports of raw hides and skins from 2015 and eliminating the export of semi-processed leather by 2025 in order to boost production of finished leather, footwear and leather goods more than tenfold by 2025 (4,30)

Financial incentives: Tanzania is a beneficiary to the Trade Mark East Africa Industrialization project, which focuses on developing strategies for increasing investment in the leather value chain and enabling the region to retain more than 50% of the potential value of the industry by 2028 (27).

Fiscal incentives: Tanzania offers 0% import duty on project capital goods, raw materials and replacement parts for agriculture, animal husbandry and fishing, including for edible oil production. It also offers 100% capital expenditure in the agricultural sector (24, 25).

Tanzania has imposed a 80% export levy on the export of raw hides and skins. This is a government measure and commitment to protect and continue to create enabling environment for both local and foreign investors (4, 31)

The government has established dedicated schemes to facilitate sector operators’ access to financial instruments. These include: the Export Credit Guarantee Schemes. The government is also considering using the Livestock Development Fund (LDF) (4).

Hides, Skins And Leather Trade ACT, 2008: Develops and regulates the production and preservation of hides, skin and leather, promotes trade in hides, skins and leather, and provides for related matters (21).

Environmental Management Act, 2004: Requires all investment in new facilities for leather production to undertake an environmental impact assessment, since the leather sector is considered by the Act as likely to have significant adverse environmental impacts (23).

Investment promotion Act No. 6, 2004: Promotes and facilitates investment by assisting investors in obtaining the licenses necessary to invest and by providing other assistance and incentives and for related purposes. This also applies to the leather processing industry (22).

Private Sector

Himo Tanners and Planters Ltd

JAE Tanzania Ltd

Africa Tanneries Ltd (formerly Mwanza Tanneries Ltd)

Moshi Leather Industry.

Government

Ministry of Livestock and Fisheries

National Environmental Management Commission (NEMC)

Tanzania Bureau of Standards (TBS), Tanzania Investment Centre (TIC)

Export Processing Zones Authority (EPZA)

Small Industries Development Organization (SIDO)

Multilaterals

United Nations Industrial Development Organization (UNIDO)

World Bank Group (WBG).

Non-Profit

Leather Association of Tanzania (LAT).