June 7, 2013

Investors shun Uganda’s Flower industry

Speaking at the Economic Policy Research Centre Forum today, Musoke provides a comparison of Ethiopia, a recent entrant in the flower sector that now has over 1000 hectares of flower gardens compared to 250 hectares in Uganda
Uganda has not had new investors in the Flower Industry for the last eight years.Juliet Musoke, the chairperson Uganda Flower Exporters Association, attributes the problem to lack of government recognition and specific development support to the sector.

Speaking at the Economic Policy Research Centre Forum today, Musoke provides a comparison of Ethiopia, a recent entrant in the flower sector that now has over 1000 hectares of flower gardens compared to 250 hectares in Uganda. This is because the Ethiopian government intervened with incentives to attract investors. These include ten year tax holiday, subsidized air freight, land leased at nominal rates with green house infrastructure and 70 percent investment loans at low interest rates.

The Flower industry in Uganda started in 1993 and it is currently Uganda’s third biggest nontraditional export. Statistics also indicate that the total investment in the flower industry is 80 million dollars and over 20 million dollars is directed back into the economy through taxes, wages and infrastructure development.

The Flower association chairperson revealed today that currently there are only 15 flower farms in Uganda, and during the economic down-turn five years back, five farms were forced to shut down. She notes that production for export at present has suffered due to constraints such as high air freight which costs 2.15 and 2.40 dollars per kilo. There is also inadequate infrastructure, lack of storage facilities at Entebbe International Airport, fertilisers and high royalty fees on planting material and product when selling.

The cost of energy is also prohibitive for the farmers, according to Musoke. She says most florists still use generators for more than 40 percent of the time at a cost of 10-30 million shillings a month. This is worsened by the cost of diesel which has increased by over 55 percent in the last 8 years from 1,680 in 2004 to 3500 shillings now. Electricity bills on average amount to between 10 and 20 million shillings which makes the industry uncompetitive.

In order to improve the situation, Musoke calls for research support that should be directed to open field crops and summer flower cultivation focusing on local crop with a market niche. Other areas for promotion are on use of tissue culture, local substrate materials, organic fertilisers and integrated pest management requirements.

Tress Buchanayandi, the Minister for Agriculture, responded that production per unit area is not good enough because of the loss of fertility in the soils whose fertility and minerals are taken out through harvests.

Buchanayandi recognizes the need to have sufficient water and points out the need to invest in irrigation even in non-arid areas.

Enable Notifications    Ok No thanks