More than half of the population of South Africa, live in poverty and more than half of them do not have access to any kind of social security. Though there are a lot of schemes being implemented by the government there is a need to offer alternative livelihood options to the poor, so that they may come out of poverty and lead a normal and healthy life. The proposed project is built on the premise that establishment of a Leather Enterprise on cooperative model will be able to stabilize the communities in Limpopo Province of South Africa.
More than half of the population (i.e around 22 million) of South Africa, live in poverty and more than half of them do not have access to any kind of social security. Though there are a lot of schemes being implemented by the government there is a need to offer alternative livelihood options to the poor, so that they may come out of poverty and lead a normal and healthy life.
AAA foundation understands that successful development of the leather industry can be strategic for the economic and industrial development of the country. Establishment of a leather enterprise with proper forward and backward linkages in Limpopo Province can help reduce poverty in the area. The proposed project is built on the premise that establishment of a Leather Enterprise on cooperative model will be able to stabilize the communities in Limpopo Province of South Africa.
The project aims at developing sustainable livelihood models by establishing two fully functional enterprises of leather products in the Capricorn District, Limpopo Province of South Africa. Through this initiative the AAA foundation will be building capacities of Women led SHGS and youth members in the identified project site and facilitate in the establishment of two fully functional leather craft units.
South Africa still struggles to cope with the entrenched inequality and poverty prevalent in the country. Despite the end of apartheid in 1994 and the support of several international funding agencies, the country still faces widespread poverty and unemployment. More than half of the population i.e around 22 million in South Africa, live in poverty and more than half of them do not have access to any kind of social security.
The primary reason for the widespread poverty in the country lies in the deep rooted economic disparity that exists in the country. Reports suggest that between 60 and 65 percent of the wealth in South Africa is concentrated in the hands of the wealthiest 10 percent of the nation (The Borgen Project). Another reason for the occurrence of poverty in the country is unemployment, with 25-30% of the workforce being unemployed.
Statistics South Africa has categorized poverty into three categories, namely- the food poverty line, the lower bound poverty and the upper bound poverty. Data from 2019 suggest that about 20% of the population lives below the food poverty line and cannot even afford a minimum calorie intake (The Borgen Project). The graph below shows the National Poverty Line in South Africa in 2019.
There has been a decline in the poverty rate in South Africa since the mid 2000s, as a result of several government reforms and aid from International Grant agencies. Also, the United Nations Development Program is working with the South African agencies on land restitution to decrease South Africa’s wealth gap.
Though there are a lot of schemes being implemented by the government there is a need to offer alternative livelihood options to the poor, so that they may come out of poverty and lead a normal and healthy life. Past experience and case studies from across the world suggest that Cooperatives have helped several communities to come out of poverty and therefore it is one of the most common approaches used to improve livelihoods across the globe. The cooperative model can provide an alternative approach to dealing with socio-economic challenges affecting the country.
The proposed project is built on the premise that establishment of a Leather Enterprise on cooperative model will be able to stabilize the communities in Limpopo Province of South Africa.
Leather Craft as a suitable option for enterprise development
Leather is one of the world’s most widely traded commodities. The global leather goods market size was valued at USD 414.0 billion in 2017 and is anticipated to progress at a CAGR of 5.4% in the coming years. The increase in the market growth is driven by growing disposable income, improved living standards, changing fashion trends, and growing domestic and international tourism. Rising demand for comfortable and trendy footwear, growing brand awareness and access to genuine leather products have further improved the demand for leather across the world. Developing countries hold 45% share of world leather trade and several developing countries are engaged in trading hides and skins, semi-processed and tanned leather goods. African countries have 15% of the world’s cattle and 25% of its sheep and goats, but produce only 14.9% of global output of hides and skins – 8% of bovine hides and 14% of sheep and goat skins. Exports of hides and skins have fallen in recent years to below 4%, yet leather is ranked very high as an export commodity in several African countries. The countries’ tanning capacity has fallen from 9.2% to 6.8%. At the same time, the livestock population has jumped about 25% over the last decade, faster than the world trend.
The gap between the resource (Livestock) and the production (leather) needs to be reduced to fully utilize the full potential of the leather industry. AAA foundation understands that successful development of the leather industry can be strategic for the economic and industrial development of the country. Establishment of a leather enterprise with proper forward and backward linkages in Limpopo Province can help reduce poverty in the area.
Limpopo Province: Limpopo is the northernmost province of South Africa. It is named after the Limpopo River, which forms the province’s western and northern borders.The capital and largest city in the province is Polokwane. Limpopo Province is divided into five district municipalities.
The district municipalities are in turn divided into 25 local municipalities.
Recent surveys conducted in the region suggest that Limpopo is one of South Africa’s poorest provinces. The poverty headcount in Limpopo has increased from 10.1% in 2011 to 11.5% in 2016. Increases in the poverty headcount were observed in all district municipalities between 2011 and 2016, except in Vhembe – decreasing from 13% in 2011 to 12.8% in 2016.
Capricorn District Municipality: Capricorn District Municipality consists of four (4) local municipalities, namely; Blouberg LM, Molemole LM, Polokwane LM and Lepelle-Nkumpi LM.
The District covers an area of 185222.27 Hectares which constitutes 12% of the total surface area of the province and is made up of 113 wards and has 28 traditional authorities. The Capricorn District Municipality has a total population of 1372355 million people representing about 23% of the total population in the province and 2.3% of the population in South Africa. The main drivers of the economy in Capricorn are agriculture, manufacturing, mining and community services.
Considering that there is a need to pull the poor households from extreme poverty and to offer employment to the unemployed people in the District, AAA foundation would like to implement a project on Livelihood Diversification. The proposed project on diversification of livelihood will help strengthen the rural households in the study area by training the people in setting up and running a successful leather enterprise.
Aim: The project aims at developing sustainable livelihood models by establishing two fully functional enterprises of leather products in Capricorn District Municipality, Limpopo Province of South Africa. Through this initiative the AAA foundation will be building capacities of women led SHGS and youth members in the identified project site and facilitate in the establishment of two fully functional leather craft units.
The project will be training the identified beneficiaries in manufacturing genuine handmade leather handbags, belts, boots and sandals etc.
- To enhance the awareness of communities of Capricorn District Municipality, Limpopo Province on aspects of sustainable leather craft and social business.
- To build capacities of 200 youth women/youth cooperative members as entrepreneurs through a series of training, workshops and exposure visits on leather craft..
- To establish two sustainable units of leather products to improve the livelihood and local economy of the area.
The proposed project will be implemented over a period of two years and will be implemented in three phases. The preparatory phase will be used for making initial preparations for the project so that it can be implemented in a smooth manner. The second phase will be project implementation where the project will be implemented to deliver the required outputs. The third phase will be the project exit phase, where our project team will prepare the identified beneficiaries to carry out the business successfully even after the project tenure ends.
Phase 1. Preparatory Phase
This phase will be completed over a period of Six months.
- Hiring of Project staff: Once appropriate funding is received, we shall be hiring a project team to manage and implement the project successfully.
- Inception Meeting: Once the project team has been hired, we shall be organising an inception meeting so as to update the local authorities and other stakeholders about the project.
- Identification of two project sites: We shall identify two project sites in the district to implement the project. The identification will be done after consultation with government authorities and also after a proper assessment of the sites. The sites will be assessed for the following:
- Ease of setting up the enterprise
- Close proximity to tourist places
- Availability of raw material
- Access to market
- Existing SHGS/Cooperative members
- Selection of beneficiaries for the project: We shall be selecting a total of 200 SHG members/cooperative members to be trained under the project. The identification of the these members/institutions will be done based criteria:
- BPL Family
- Past performance of the group
- Trainings received in the past
- Active in the area
- Undertake market research: Our team shall undertake a market research to understand which leather product has a high demand both in the local market and also in the international market. Also during the research we shall collect information related to the gaps in the existing processing and manufacturing of leather products. This study will help us in finalising the products that shall be manufactured in the two enterprises. The market research will help in finalizing the types, designs etc. of the products that have a higher demand in the market.
- Stakeholder consultations: AAA foundation will conduct a series of consultations with our primary stakeholders. This will help us in developing a suitable protocol for promoting the local leather craft. We will conduct meetings and discussions with tourists, local vendors, and other local authorities. This will help in making the entire process participatory and integrative.
Phase 2: Project Implementation
The project will be implemented for a period of 15 months.
- Establish the Shed: Our project team will select suitable land for construction of workshed in the two identified project sites. The workshed will be constructed through complete support from the SHG/co operative members.
- Purchase of tools and equipment: Leather craft requires some essential tools. Both the worksheds will be equipped with the following:
- Leather Groover
- Leather Spacer Set
- Leather Edge Beveler
- Needles and Threads
- Cutting boards
- Hand Press
- Leather deglazer
- Leather Dies
- Thickness gauge
- Rotary Cutters/Scissors
- Sewing Machine
- Stone Slabs
- Strap Cutters
- Measuring tapes
- Training of the identified beneficiaries: Training sessions will be conducted by experts and resource persons. Technical resource persons will provide hands-on training on Leather Crafting. Leather crafting is the practice of making leather into craft objects or works of art, using shaping techniques, coloring techniques or both. The training will be conducted for a period of two months, where the beneficiaries will learn the basics of leather crafting skills. The workshop will provide training on all the necessary steps of the process, designing, choice of leather, tools, cutting, stitching etc. The module will have the following sections:
- Procuring raw material
- Prepping the Hide
- Tanning The Leather
- Dyeing the leather
- Softening the leather
- Leather crafting – Painting, engraving, stamping
This will be a basic training, which will be followed by another specialized training on making bags, belts and boots/sandals. By the end of the training workshop the beneficiaries will be able to design and make leather hand bags, belts and boots/sandals.
Once the training on processing and production of leather products is complete, we shall be imparting training on business development. This will include sessions on
- Managing the enterprise
Exposure Visit: The trained beneficiaries will be taken to leather factories and private enterprises to help them understand how to successfully run their enterprise.
Developing marketing strategy: All the products will be marketed with proper branding and packaging. Along with quality checks we will ensure that proper care is taken while packaging the products. Attractive packages will be done so as to capture attention of tourists towards our products.
- Analysis of marketing channels to fix reasonable price the product
- Networking for building market linkages
- Advocacy to promote the purchase of products
- Formalizing purchase agreements with Local vendors
- Selling the product Online
- Agreement with international vendors
Phase 3. Exit Strategy: The last 3 months of the project will be dedicated towards a smooth exit.
- Preparation of exit strategy: This project has planned the exit of the project team right from the beginning by bringing in the community members/SHG leaders from the inception and implementation phase. The project team will make conscious efforts to involve and build capacities of the women/youth leaders in all the aspects of business. The project team will only provide handholding support as and when required. During the last 3 months of the project, all the business related activities right from the purchase of raw leather to the selling of the final product will be done by the community members themselves. The project team will just oversee the functioning of the two enterprises.
- Linkages with government institutions and authorities: To ensure that the enterprises are able to sustain themselves, we shall develop linkages with government institutions and authorities. We shall also apply for various government grants and schemes so that we are able to upgrade the enterprises and enhance the skill of the beneficiaries in the future.
- 200 marginalized women and men are organized into two leather enterprises with requisite skills in business and cooperative management.
- Selected members are engaged in viable micro enterprises through improved vocational skills and livelihood support.
- Two sustainable enterprises established by 200 members will help in easy access to markets and will considerably enhance the family incomes.
- Dependence of 200 young men and women will reduce considerably on pensions, government subsidies and grants.
- Increased income and confidence will have multi – generational impact as it will help in securing a better future for the entire family of the beneficiaries.
- Increased production of leather goods in the area.
- Promotion of handmade leather products.
- Strong forward and backward linkages for leather production and marketing established in Limpopo Province.