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Ethiopia: Government incentives and low labor costs are bringing in foreign investment

 The Ethiopian flower industry is flourishing, with the help of government incentives and low labor costs, experts told Anadolu Agency on Friday.
ethiopia-flower-investment
The country is now the second-largest flower exporter in Africa, with over 100 flower growers on 1,700 hectares (17 000 000 square meters or 182,986,477 square feet).

“We are now second in Africa only to Kenya, and we expect to overtake them soon,”Berhanu Ludamo,  Promotion and Information Service Head of Ethiopian Horticulture Producers Exporters Association told Anadolu Agency.

“Ethiopia earned $250 million from horticulture export in 2014. The amount is expected to increase this year due to the expansion of horticulture farms.” Berhanu said. The area will grow to 3,000 hectares in the coming five years and the revenue is projected to increase to $550 million, according to Berhanu.

Climate is a major competitive advantage. Parts of the country south of Addis Ababa are 2,000 meters (6,561 feet) above sea level, and this makes it an ideal environment for floriculture, according to Shiferaw Mitiku, a researcher and agricultural marketing consultant in Addis Ababa.

“The export-oriented agricultural policy, attractive incentives, macro-economic stability and cheap labor constitute the competitive edge for the Ethiopian flower industry,” he said.

According to Ethiopian Investment code 2001, flower growers are offered “a five-year tax holiday, duty free imports , access to bank loans and farm lands as well as an 100 percent exemption from payment of export customs duties.”

Berhanu said the competitive advantages are attracting foreign flower growers.

“They are coming from Kenya, Tanzania and Uganda and from Ecuador,” Mitiku said.  The Netherlands, which is the world center of the flower trade, is also investing in local flower farms.

Gizachew Wondimu, manager of one of the biggest farms, Gallica Flowers, which moved in 2008 from Ecuador to Ethiopia, told Anadolu Agency that  “availability of adequate water and human labor encouraged the farm  to move to Ethiopia.”

“The   farm is located at 2,600 meters above sea level, which is suitable for growing best quality flowers,” Gizachew said. “We grow 82 premium quality flower stems per hectare annually on average and export to Italy, France, Germany, Middle East, Korea, Japan, Russia, Cameroon, Nigeria and South Africa.”

“The farm exported 6 million best quality flower stems last year,” he said. Private investment will help the farm grow to one of the largest in Africa, Gizachew said.

But the “Ethiopian brand” is not yet established in the world flower industry, according to Shiferaw. “Some countries re-export Ethiopian cut flowers and the brand disappears.”

“We have very few experts,” he said. “And incorporation of the rural community is also a serious issue,” he added.

Source: aa.com.tr

 

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