Exportation of raw hides is robbing the country of the much-needed foreign exchange revenue in excess of $95 million (K70 billion) annually, which could help spur economic growth, according to the Small and Medium Enterprises Development Institute (Smedi).
Traditional markets for Malawi hides are Kenya, Tanzania, Zambia, Mozambique, Zimbabwe and China.
Lack of tannery compels traders to export the hides in raw form.
Smedi public relations officer Mian Mpesi said a research they conducted last year, found that exporting unprocessed hides costs the country about K70 billion in export revenue annually.
“We have many small and medium enterprises [SMEs] in the country that deal in hides, but their efforts are being hampered due to the fact that we do not have a tannery that processes hides up to the last stage.
“According to our statistics, we have about 130 SMEs in the leather value chain and if they can be brought together, it will be easy to give them assistance.”
Mpesi was speaking in an interview ahead of the forthcoming launch of the Leather Industry Association of Malawi (Liama) in Lilongwe next week.
He said the coming in of Liama will compel SMEs to work in groups.
SMEs in the leather sector have for a long time been looking for a tannery and by bringing them together, government and other stakeholders want to help them as a group.
Figures show that the leather industry is one of the fastest growing sectors, which can contribute about 3.5 percent to the gross domestic product (GDP).
In an earlier interview acting president of Liama Chrispin Amasi said despite vibrant economic opportunities that Malawi stands to benefit from the industry, lack of a tannery continues to pose as a set back to its growth.
Industry players are failing to procure equipment which cost about $1.5 million (about K1 billion. n