KEPSA, led by the CEO Carole Kariuki, participated in the Leather Sector Roundtable that was held on 3^rd March 2025 at Equity Centre in Nairobi. Hosted by Equity Group Holdings in collaboration with the Kenya Investment Authority (KenInvest), the forum converged key stakeholders in the leather and leather products ecosystem to discuss end-to-end leather value chain investment approach in Kenya and how to position Kenya as a leader in the leather sector for sustainable, high-quality leather production and investments. The Roundtable was graced by principal secretaries; Dr. Juma Mukhwana (State Department of Industry) and Jonathan Mueke (State Department for Livestock Development).

In his remarks, Dr Mukhwana mentioned the government's prioritization of the sector and the efforts towards enhancing it while emphasizing the need for private sector involvement to drive the sector to a significant level. He noted the government’s commitment to encourage the market aspect by implementing the policy framework that supports the purchase of Kenyan-made products by the disciplined forces and other government agencies. He concluded with a call for investment to support the sector's growth and market development, including enforcement of regulations and quality standards.

PS Mueke outlined the government's strategies to strengthen Kenya’s leather, dairy, and red meat sectors. These include enhancing traceability, improving animal health and breeds, and commercializing livestock to increase the sector's economic contribution from KES 15 billion to KES 20 billion. He also highlighted efforts to improve raw material quality and establish a Kenyan Industrial Park. He, however, indicated market failures, high input costs and stringent environmental regulations remain a challenge for the industry.

Kenya’s leather industry has faced an 80% drop in export value over the past decade due to global market shifts, including the US-China trade war and COVID-19. This decline reduced the number of tanneries from 20 to 13 and pushed exports toward West Africa’s food market, while domestic demand doubled. Challenges such as poor-quality hides from inefficient slaughterhouses and a lack of incentives persist. Although Kenya exports 70% of its leather as wet blue, it has the potential to produce crust and finished leather. With a goal to scale from $80 million to $800 million in 15 years, the industry is focusing on footwear and bags, but significant private sector investment is needed to drive growth.

Dr James Mwangi, CEO of Equity Group Holdings, highlighted the significance of green industrialization and livestock, noting that the livestock industry is larger than agriculture. He noted that despite the economic growth, the population growth rate has outpaced GDP per capita, undermining the overall economic progress. He also said that the government should continue to play its role in facilitating private sector growth, emphasizing the importance of the right policies.

Dr Mwangi outlined some of Equity Group’s initiatives to support the leather industry including; working with the government to open up the European market for livestock products; Collaborating with the American market to expand export opportunities; Establishing a one-stop shop at the Equity Bank branch to facilitate credit access and market linkages; Overseeing the disbursement of the $1.5 billion credit fund to support the sector.

“Although Africa is home to about one-third of the world's livestock population, it contributes only 4% to global leather production, primarily due to limited value addition and inadequate infrastructure,” said Ms Kariuki who further noted that the Equity Group’s initiative serves as a wake-up call for Africa’s private sector to adopt new funding models, moving away from the aid-dependent approach that is rapidly declining amid shifting foreign policies from countries like the U.S.

John Mwendwa, CEO of KenInvest elaborated the objectives of the collaboration, including syndicating sector pitch decks by sharing and aligning pitch materials for investment targeting and promotion; aligning on a sector and geography-based annual investment targeting and promotion calendar; identifying bankable investment opportunities; and matchmaking investors with investment opportunities by identifying suitable investors and connecting them with specific projects.

The Roundtable emphasized the need for strategic investments, policy support, and private sector collaboration to revitalize Kenya’s leather industry. While government initiatives and Equity Group’s financial commitment set the stage for growth, overcoming challenges will require joint efforts to enhance training and investment in leather goods.