How Kenya’s New Jobs Plan Could Fire Up Shoe Manufacturing

Kenya has its sights set on becoming a top global manufacturing hub and the nation is turning to its leather sector as a driver for its economic growth.

Speaking at a Kenya Leather Development Programme meeting in Nairobi last week, Ministry of Industrialization principal secretary Betty Maina said the Kenya government is counting on the nation’s leather sector to add 70,000 jobs.

“The government considers the leather sector as a critical component of the economy by creating 70,000 jobs in Kenya by 2022 and a boost to the economy from the current 14 billion shillings ($138 million) to 55 billion shillings ($544 million),” local publication The Star reported Maina as saying at the meeting. “The training gained through the Kenya Leather Development Programme should set us towards the path of fulfilling these objectives.”

At the meeting supported by the USAID West Africa Trade and Investment Hub, which helps the region’s farmers boost trade and Kenya’s Ministry of Industrialization, Trade and Cooperatives, participants developed a diagnostic study focused on the Kenyan leather industry’s skills gap and addressed what it’s going to take to ramp up the nation’s position as a major leather manufacturing hub.

According to World Bank’s Kenya Leather Industry Report, the sector hires 14,000 people during peak season. Data from the Kenya National Bureau of Statistics also said Kenya’s leather sector accounted for only 2 percent of manufacturing employment in 2013.

Despite employment hurdles, leather, along with apparel and textiles, is expected to elevate Kenya’s economy over the next few years. According to World Bank’s Kenya Leather Industry report, Kenya’s leather sector competitiveness is based on the country’s comparative cost advantages derived from its cattle, goat and sheep livestock and its relatively low labor costs. The report said Kenya’s tanners provide a comparative cost advantage in the manufacturing and export of semi-finished wet blue leather, which accounted for 89 percent of Kenyan leather exports in 2013.

The World Bank report also suggested a focus for Kenya on three key products — low value added leather footwear, high value added specialty products and finished leather, to ramp up Kenya’s leather industry. By increasing exports to East African Countries (EACs) of low cost men’s shoes, increasing exports of specialty leather accessories to the U.S. market and increasing exports of finished leather to China’s market, Kenya could elevate its stance as a global hub for leather manufacturing.

Kenya’s leather manufacturing moves come on the heels of the nation’s textile sector growth. Dubai-based United Aryan, which manufactures apparel for export in Kenya, recently announced plans to construct a $113.8 million factory at the Olkaria geothermal fields in Naivasha, Kenya, which could hire up to 10,000 locals directly and 40,000 other people indirectly. The factory, which has the capability to manufacture and wash more than 100,000 units a day, will produce garments that will be sold in Kenya and other international markets, including Europe and the U.S. The aim of the factory is to build up Kenya’s economy and its stance as a leading apparel supply chain center.

Editor’s Note: This story was reported by FN’s sister magazine Sourcing Journal. For more, visit Sourcingjournal.com.

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