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Kenya to scrap import duty on raw leather to promote value additionWednesday, October 11, 2017 > 10:05:02
Kenya plans to remove duty on raw leather imports in order to promote value addition locally.
The move aims to increase the supply of raw materials to local footwear and other finished leather industries, Cabinet Secretary in the Ministry of Industry, Trade and Cooperatives Adan Mohamed told a media briefing in Nairobi on Tuesday.
"We are going to begin discussions with the National Treasury with a view to eliminate import duty on raw hides and skins by mid-2018," Mohammed said on the occasion of the launch of Kenya Leather Development Council Strategic Plan 2017-2022.
The plan highlights key interventions required to ensure that Kenya's leather industry becomes globally competitive.
Mohamed said the country's leather sector has enormous potential because it produces 10 million pairs of shoes annually against an annual demand of approximately 37 million pairs.
The deficit is met through imports of both finished and second-hand shoes, he said.
According to the Ministry of Industry, the vast majority of hides and skins produced in Kenya are exported in unprocessed or semi-processed form.
"This denies Kenya significant foreign exchange earnings due to missed opportunity to export finished leather and footwear goods," Mohammed said.
He added that the exports of unprocessed leather is prevalent because overseas buyers are willing to pay a premium price for Kenya's hides and skins.
The east African nation has imposed an 80 percent duty on exports of raw leather.
Mohammed said additional restrictions will be imposed on exports of unprocessed leather.