KENYA / ETHIOPIA: Ethiopia now Africa's second largest exporter of flowers while Kenya leads the regional sector

Ethiopia is on course to becoming one of Africa's leading flower exporters, generating over 600 million US dollars annually within the next five years, says the country's Horticulture Producers and Exporters Association. The Horn of Africa country currently gets about 120 million US dollars annually from flower exports. "In general the foreign currency earned in the last two years is growing by a hundred percent or more. For example in 2005, there was about 22 million dollars but in 2006, at the end of 2006, it is doubled," the association's chairman Tsegaye Abebe said. Tsegaye said 68 investors had developed 750 hectares under greenhouses and another 150 hectares of tunnel or open field production. The government is processing land purchase applications by 100 international investors who would like to grow flowers, Tsegaye said during a horticulture exhibition in the capital Addis Ababa. Ethiopia's investment policy provides a five year tax holiday which has been a good attraction for investors. Land and labour are also cheap and banks are ready to lend up to 70 percent of the initial investment without collateral. Tsegaye said 70 percent of flowers produced in the country are exported to Holland. Some of Ethiopia's investors are actually Kenyans and Ugandans who cite fewer government incentives back home. Sher Agencies, a leading Kenyan flower firm, has set up one of Ethiopia's largest farms. Another notable group of investors were white farmers from Zimbabwe whose farms were seized under President Mugabe's infamous land redistribution policy. However, at a two-day "Aid for Trade" meeting held in Tanzania this week, it was Kenya that was cited as an example of how targeted investments by lenders could boost market access and earnings. Kenyan flower exporters had been barred from EU and U.S. markets due to pesticide residues on their blooms. World Trade Organisation (WTO) officials say that EU aid of about 5 million euros helped phase out the pesticides some five years ago, allowing farmers to get back into the lucrative market. Kenya currently leads the region with about 700 million US dollars in annual exports. The sector employs some two million Kenyans like Paul Maina, who works at Oserian Farm in Naivasha. "I have four children and I have been able to bring them up because of this job. My salary is not that bad, I get about six thousand Kenya shillings every month," said Maina. Carol Andrews, the Environment and Audit Manager at Oserian Flowers says the flower market is large enough for both Ethiopia and Kenya to succeed. "We have a permanent workforce of six thousand employees that we are responsible for them and their families. So we ourselves are not going to go anywhere and Ethiopia may develop and there is room in the market. The floricultural market is big and I'm glad that it is because it's offering opportunity to countries like Kenya and Ethiopia," said Andrews. Other local growers share Andrew's sentiments over Ethiopia's progress. Jane Ngige, Chief Executive Officer of the Kenya Flower Council, said she doesn't view Ethiopia as a threat. "From a country's perspective, we really don't consider that Ethiopia is a threat we look at the fact that Africa provides about 75 percent of the European union of cut flower imports. Kenya is providing about 38 percent of that requirement," she said. Industry analysts say Kenya is the biggest cut flower supplier to the international market, exporting mainly to Europe. Ethiopian flowers are currently being exported to European markets but efforts are underway to open up new markets in Russia and Japan.

ITN Source | October 5, 2007

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