Recently, the WHO published a Target Product Profile for a diagnostic test for cutaneous leishmaniasis (CL) and a Roadmap to 2030 for Neglected Tropical Diseases. The documents highlight that existing diagnostic tools for CL are insufficient, whilst setting clear goals for improved sensitivity and reduced cost. The need for species typing in diagnostics is also becoming more pressing with the emergence of drug-resistance, especially of Leishmania tropica. Serological tests are unable to do this, while techniques that can, like PCR, require complex and expensive machinery. Isothermal assays like LAMP offer a promising solution, but more work also remains, as few species-specific LAMP assays have been developed thus far and CL in Ethiopia is particularly neglected. Additionally, since the COVID-19 pandemic, many cheap isothermal diagnostic devices have been produced, which have yet to be tested in the diagnosis of CL. Finally, artificial intelligence presents another avenue for rapid diagnosis by image analysis. In this comprehensive review, we examine the opportunities and challenges inherent to diagnostic development for CL, a priority undertaking that still faces many developmental hurdles.