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Flower Growers Planting Seeds of Profit in Ethiopia


Flower Growers Planting Seeds of Profit in Ethiopia
Ethiopia’s flower industry is now Africa’s second largest

AFRICANGLOBE – Government incentives have given horticulture a growth spurt. But every rose has its thorns: now there’s greater scrutiny and more red tape.

At the fifth biennial HortiFlora Expo Ethiopia in March, nearly 90 exhibitors gathered in Addis Ababa’s Millennium Hall.

Representatives from all sectors of the industry were there: breeders, growers, auctioneers and investors, as well as producers of fertiliser, cold storage equipment, irrigation systems and greenhouses.

That the number of buyers and visitors was down this year, according to some of the exhibiting organisations, belies the strength of the country’s horticultural exports, which have grown year-on-year over the past decade.

A total of 120 companies – 73 of them foreign-owned, 36 local and 11 joint ventures – are producing flowers, potted plants, fruits, vegetables and herbs.

They are providing employment for 184,000 people, 70 percent of whom are women. According to figures from the Ethiopian Horticulture Development Agency, the sector generated about $266m in 2011/2012, which equates to roughly 10 percent of Ethiopia’s export earnings – up from just $28.5m in 2004/2005.

The fastest growth has been in floriculture, where Ethiopia, the second-largest flower exporter in Africa, is beginning to rival well-established Kenyan producers.

Eight years ago Ethiopia shipped 83m stems worth $12m abroad, principally to Europe. Production reached 2.1bn stems valued at $213m in the last financial year.

Foreign Presence

Companies like De Ruiter, a Dutch flower breeder, say it is essential that they have a presence in the country.

“In terms of the international market, flowers from Ethiopia are now becoming accepted by most of the buyers,” says Tigist Gizaw, sales manager for De Ruiter.

“Putting your varieties [here] will also give you the privilege of diversifying your market. So it’s important for us.”

Good weather, inexpensive labour and a plentiful supply of land attract foreign investors.

The Ethiopian Horticulture Sector Statistical Bulletin says that 12,552ha of land is under cultivation for flowers, vegetables and fruit, but the government claims a further 115,146ha could be made available for horticultural development.

When asked why Belgian-owned Desa Plants invested in Ethiopia, farm manager Ben Depraetere replies: “Two main reasons: climate and availability of labour. We try to supply the best quality, and that is labour intensive.”

Proximity to the European market and the stability of Ethiopia were also a draw, he says, adding: “And of course the government attracted us here with incentives!”

The Ethiopian government’s Growth and Transformation Plan prioritises horticultural exports.

To kickstart the industry, the government offered five-year tax holidays, waived import duties on capital goods and lowered duties on exports. It also initially offered rent-free land, but Desa Plants arrived too late for this particular perk.

Even so, the government helped facilitate the leasing process, says Depraetere.

These inducements also attracted opportunists and the inexperienced.

“There were a lot of cowboys in the beginning who didn’t know about the sector and took very big loans and ran off with a lot of money. It’s getting tougher to get your business started […]. The support is still there, but you have to prove that you are a valid investor,” Depraetere explains.

Bezuayehu Amlake, commercial manager at Tinaw Flowers, a private Ethiopian company, agrees that the government has become stricter.

“Now policies are coming, some of which are discouraging the industry,” she laments.

“When you want to expand, you can’t get land where you wish. Previously the government was so free to give it to you.”

Rights campaigners have pressured the government to limit the mass relocation of populations to free up land for investors.

Bezuayehu also says that bureaucracy has increased and that the cost of freight on Ethiopian Airlines is high and rising.

Even so, business is growing for Tinaw, which currently exports 20m stems per year and plans to add 11ha to its 15.6ha now under cultivation.


By: Elissa Jobson

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