Hides scam rocks Zimbabwe leather industry

TINASHE MAKICHI                                 

Zimbabwe is struggling to stem export and smuggling of raw hides and skins engineered by a cartel of minorities with the racket denying government millions of dollars in hard currency in potential tax revenue, Business Times has established.

The scam comes at a time when the government has identified the leather industry as one of the drivers of the country’s manufacturing sector. Government has since crafted the Zimbabwe Leather Sector Strategy (2021-2030) as part of efforts to make a leather mega industry.

The administration wants to come up with a vibrant and internationally competitive, reliable, and innovative leather industry contributing to sustainable development through value addition.  They are calls to increase capacity utilisation of value-added products from 30% to 75% by the end of 2030.

But, rampant smuggling of hides is threatening the attainment of that vision.

Well-placed sources told Business Times this week that the raw hides are being smuggled by a syndicate composed of white players working in cahoots with powerful politicians, and have been in operation for years, to Brazil, South Africa, Germany, Italy and the Middle East.

The monopoly is said to control the entrance of new players, especially of black players.

“The leather industry is a big boys game in Zimbabwe,” one source told Business Times.

He added: “Most white players have been smuggling purported rotten hides and the government has been turning a blind eye on this scam thinking the hides are of lesser value. But the issue is the hides coming from Zimbabwe are organic and well sought after across the world.

“Therefore, these hides in their purported rotten state have been fetching big money in Italy and Germany and that money never comes back to Zimbabwe. These hides are also bought in Zimbabwe at low prices, especially those bought from local abattoirs and national parks.”  

The World Trade Organisation ranks Zimbabwe on 48th position in the world and contributes about 0.35% of the world livestock herd. The southern African country, which boasts of organic hides with the potential to scale up production and processing raw hides, is ranked 14 in Africa.

But, the smuggling syndicates are taking advantage of Zimbabwe’s porous borders and airports.

It is understood that syndicate has been buying hides from various local abattoirs and some of the country’s national parks.

Government is said to be tricked into believing that the cartel would be buying rotten hides which are eventually smuggled   out of the country.

It is understood that most tanneries in the country are owned by white families and syndicates while Cold Storage Company’s Bulawayo-based tannery is the only one that is publicly owned.

It is said there was a deliberate minimum scrutiny and observation on containers used to transport the hides at the points of entry, resulting in the government losing millions of dollars in the process.

Other sources indicated that the continued control of the leather industry in Zimbabwe by a group of minorities has made the acquisition of permits to deal in hides and leather in the country difficult.

According to the Africa Leather and Leather Products Institute, the global estimated trade value of the leather sector is over US$130bn a year, which is six times the value of trade in meat, and this figure, continues to grow.

This trade value shows that with the right support, the Zimbabwe leather sector has potential to set the country on a positive path towards sustainable economic growth, employment generation and poverty reduction.