Uganda’s own-goal in the leather trade. In Jinja, a populous town on the shores of Lake Victoria, four tanneries closed in a very short period of time and hundreds of people lost their jobs. The problem the companies encountered was caused by the central government in Kampala. How? By limiting exports of raw hides. The result has been disastrous.
Four tanneries close in Uganda
Within a very short time, four tanneries in Jinja, Uganda, closed their doors. In order: SWT Leather Industries, Mehaka Leather Exim, Uganda Leather and Tannery Industries, and Loyal Small Scale Industries. The city administration has pointed out that the closure of these businesses has resulted in increased unemployment and reduced revenue to the municipal coffers. The town is now left with only Skyfat, a Chinese-owned company that is the only customer of the local leather traders.
They blame the government
In the Ugandan edition of the monitor.co portal (from which the screenshot is taken), Jinja slaughterhouse chairman Chrizestom Kagolo is clear about who is to blame. In other words, he attributes the crisis to the government’s obstacles to exporting raw hides. A decision that was aimed at encouraging the sale of wet blue abroad. What happened? The market decided for everyone. Exports of wet blue never took off, while prices of raw hides plummeted, making the business no longer profitable. Companies that previously remained open by exporting raw hides, went bust.
Disastrous result
“When the government intervened in the leather sector and started taxing it, we lost the export market. Also because if one country signs a trade agreement with another and then violates it, it loses the local market”, notes Samson Ojune, president of the Katakwi District Livestock Traders Association.
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