The Kenya Flower Council (KFC) Tuesday announced the state of Kenya’s floriculture industry and the need for the government to create a sustainable environment to boost growth in the sector.
Speaking during the event at a Nairobi hotel KFC Chief Executive Officer (CEO) Clement Tulezi said that agriculture remains the main source of employment and a major driver of economic growth as the sector contributed 35 percent to the Kenya’s GDP in 2020.
He noted that despite the overall economic impact caused by the Covid-19 pandemic, the agricultural sector grew 5.4 percent in comparison to 2019.
“Horticulture is among the fastest growing sub-sectors in Kenya. In 2021, the sector earned Kenya a total of Sh154 billion. The value of floriculture specifically was Sh110 billion, equivalent to 71 per cent of all earnings from horticulture,” said Tulezi.
He further stated that despite the relative growth, the sector requires a predictable and stable business environment.
“Today, the industry is struggling. The margins are shrinking by the day. Growers are struggling to supply the market and maintain Kenya’s position as a key producer of cut-flowers and ornamental,” said Tulezi.
The CEO stated that among various reasons that are attributed to the struggle of the floriculture sector is global recession and inflation, uncertainty in the market, fluctuating prices of products, extremely high cost of air freight, drought in most parts of the country, high taxation of the sector, unsustainable energy costs, increased cost of accessing inputs, non-access to VAT refund.
Tulezi further outlined that taxation coupled with high freight rates have seen a decline in the volume of export of flowers.
According to 2022 data charts export dropped by approximately 15,000 tonnes compared to 210,000 tonnes in the previous year. He added that the current levies have a huge negative impact on the sector threatening jobs and livelihoods.
Tulezi said that current growth of the sector is curtailed as there are no incentives for new investors. He reiterated that even as Valentine’s Day is celebrated KFC does not expect new investment under the current environment.
He noted that there is immense opportunity to secure investment based on the energy challenges in the west.
The CEO indicated that many growers in the west are currently searching for more sustainable regions to grow pointing out Kenya’s potential as everything needed (conducive climate, altitude on the equator, skilled workforce and good connectivity to the rest of the world) is available.
Tulezi emphasized that more investment means expansion of the sector, more jobs, more foreign income and Kenya solidifying its position in the global flower trade.
By Elizabeth Mugo
