Ethiopia’s cluster approach helps small leather goods enterprise to grow: UNIDO

Addis Ababa, June 27, 2023 (FBC) – The United Nations Industrial Development Organization (UNIDO) says that Ethiopia’s cluster approach has helped small leather goods enterprises to grow.

UNIDO stated that across the world, micro, small and medium-sized enterprises (MSMEs) play a crucial role in business and employment, accounting for 90% of all businesses and providing 60-70% of all jobs.

Start-ups and newly-established firms, which are generally micro or small enterprises, are the driving force of innovation and sustainability in the private sector, it adds.

In Ethiopia UNIDO has supported LOMI Leather, an association of women entrepreneurs producing leather goods and garments, formed with the support of the United Nations Industrial Development Organization (UNIDO) with skills training, market access and new technology.

LOMI members have benefitted from training in design and cutting skills, as well as from the provision of six machines for leather cutting, trimming, splitting and softening.

The support is part of the UNIDO project, upgrading of the Ethiopian Leather and Leather Products Industry, funded by the Italian Development Cooperation and implemented in collaboration with the Leather Industry Development Institute (LIDI).

The project increases the competitiveness and income of SMEs engaged in manufacturing leather footwear and products.

It targets selected SME networks in Addis Ababa involving women and youth who lack access to opportunities and financial resources.

The local authorities provided capacity building and coordination services, and incentives such as manufacturing workshops for reduced rent for a period of five years.

In all, 12 networks have received support, totalling 377 enterprises and involving around 3800 workers.

Another UNIDO project, “Leather initiative for sustainable employment creation”, funded by the European Union, is supporting the establishment of a leather manufacturing cooperative with 125 women and youth in Modjo City, 64 kilometres from Addis Ababa.

The project is supplying the cooperative with machine, tools and skills training, while the government has provided a manufacturing workshop.

The COVID-19 pandemic meant that LOMI Lather and many other small leather clusters to lost income as a result of reduced demand for products and increased operating costs.

In addition, they faced difficulties in access to credit, high inflation, and shortage of raw material supplies as well as tools and accessories for their machineries.

To help tackle the pandemic’s impact and to aid recovery, four UN agencies – UNIDO, UNDP, ILO and UN Women – implemented a joint programme, “Sustaining businesses and protecting jobs in the informal economy of Ethiopia”.

Nearly 1,600 SMEs, with over 2,200 employees, have benefitted from the programme.