Uganda shunned by flower investors

By EPRC

For the last eight years Uganda has not attracted any investors in the flowers industry, a sign that the sector is not doing well and in dire need of government intervention.

Worse still seven flower farms closed down due to the global economic downturn leaving the country with only 15 farms with 250 hectares production area.

Yet export of flowers brings into the country’s economy $20m through taxes, wages and infrastructure development.

Compared to Ethiopia, a recent entrant in the industry, over 1000 hectares have been farmed for flowers while Uganda still farms 250 hectares for the last two decades inspite of subsidies provided by government like a 10-year tax holiday, land lease at nominal rates with green house infrastructure, 70 per cent investment loans at six per cent interest rate and subsidized air freight.

Juliet Musoke, the Chairman, Uganda Flower Exporters’ Association, attributed Uganda’s poor performance to absence of an industry’s specific investment incentive package to attract local and foreign, affordable and long-term finance, high air freight rates at the lowest $2.15 per kilo and at the highest $2.40 per kilo and cold storage facilities at Entebbe International Airport.

The others are insufficient freight volumes, affordable and unencumbered land for new investment and high royalty fees on planting material and product when selling.

Uganda’s flower industry is further hindered by lack of breeding companies that may be instrumental in lowering the cost of planting material. Planting materials are secured from breeders in Kenya for roses as well as Europe and the United States.

In 2012, Ms Juliet Musoke said the country earned $32.13 million from its flower exports compared with $30.6 million earned in 2011.

The country’s flower exports volume also reportedly increased from the 5,765 tonnes in 2011 to 6,500 tonnes this year.

Yet Kenya, with 500 hectares of lowers, exported 109,950 tonnes of flowers in 2011, down 9.3 per cent from a year earlier. Flowers earned the country Ksh30.6 billion ($349.5 million) in 2010.

kazcharlie@yahoo.com

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