THE country's efforts to attract investments into the leather sector are under serious threat due rampant smuggling of raw hides and skins, leaving the prospective investors with insufficient raw materials.
Should conducive business environment be created, Tanzania has huge potentials to become a giant exporter of leather products and ultimately boost the sector's contributions to the national economy.
During the fifth Tokyo International Conference on African Development (TICAD V) in Japan lat June, a Japanese firm, Nitori Holdings Company Limited, expressed interest to invest in the country's leather industry.
Nitori Holdings Company management met President Jakaya Kikwete whom they asked at least 40,000 pieces of cattle hides annually for the manufacture of leather sofas for the export markets.
Reliable sources told the 'Daily News' in an interview that the investors were disappointed after they surveyed different parts of the country and found that there was insufficient raw materials for the envisaged factory.
"They have suspended the project until the government assures them of the reliable raw materials before embarking on the project," said the source.
It is estimated that over 50,000 pieces of hides are smuggled out through the country's porous borders, denying the government about 427m/- in export levy.
The Leather Association of Tanzania (LAT) Executive Secretary Mr Joram Wakari told the 'Daily News' in an interview in Dar es Salam yesterday that few business people acting as middlemen were sabotaging the government efforts to attract investments that could transform the leather sector.
"Despite the increment of levies by almost 90 per cent to discourage exports of raw hides and skins, the malpractice remains rampant, denying the present and prospective investors sufficient raw materials," he said.
He said LAT accompanied the Nitori delegation to survey different parts of the country believed to be rich in hides and skins and found that there were insufficient raw materials for the fully fledged leather factory.
Official records show that skin and hides exports earnings increased by 24 per cent last year to 8.4bn/-, indicating that the industry was operating below capacity.
Records further show that only 62 million square feet of hides and skins were collected against the country's capacity to produce 2.8 million pieces of cattle hides, 3.8 million goat skins and one million sheep skin a year, an equivalent of 94 million square feet.