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Current production
Currently in production within Ethiopia are a number of flowers, including roses, gypsophilia, hypericum, limonium, carnations and chrysanthemum. The Ethiopian Highlands provide near ideal growing conditions for roses. Ethiopia’s rose industry grew from 40 hectares productive to 250 hectares productive between 2004 and 2006, and is positioned to grow even more.
Prospect of floriculture investment in Ethiopia
Flora Culture International—a leading investor in Ethiopia—has described “parts of the country south of Addis Ababa [as being] not unlike the Naivasha area in Kenya, where well over 50% of Kenya's flowers are grown, and could be exploited in much the same way.” Many of Ethiopia's farms promote ethically grown produce. Those that do not have the capacity to do so have expressed interest in becoming involved in such initiatives. Dutch Ambasssador to Ethiopia Alphons Hennekens has said:“The fact that a lot of Dutch companies decided to invest in Ethiopia has meant that the investment climate in the country is favorable…We have seen more spectacular growth in the floriculture sector
here than anywhere else in the world.”
Last year, the Ethiopian Government introduced a newenvironmental law on the basis of its work with Ethiopia's Environmental Protection Agency. The procedure involves assessing the environmental impact before a job starts, conducting regular environmental auditing to make sure the environment is not being polluted, and closing down the company if pollution occurs. Investors committed to ethical initiatives and promoting
environmentally sustainable flower production can do so in Ethiopia.
Exporting cut flowers
The volume of exports of cut flowers is growing and this is showing great promise as a developing industry sector. A substantial number of investors have started operating in Ethiopia due to the Government’s focus on this sector and the unparalleled advantages that Ethiopia has in floricultural production compared to other producers. Flower exports as a share of total exports grew from 0.15% in 2001 to 1.59% in 2005. The value of Ethiopian flower exports rose from $660,000 in 2001 to $12,645,000 in 2005.
Agro-climatic conditions
Diverse agro-climatic conditions in the highlands and lowlands of Ethiopia make it a suitable place for the production of a wide range of flowering plants, making cut flower production a fast-growing export business. Ethiopia has 12 river basins, 18 natural lakes (including the Rift Valley lakes) and a potential of 3.7 million hectares of irrigable land. About 80-90% of these resources are located in the west and south-west of the country, which is home to 40% of the population.
Temperatures are conducive tofloriculture and there are long hours of sunshine - usually more than 11 hours a day. Water for irrigation is available in ample quantity and the well-drained soil in Ethiopia is suitable for growing
horticultural products.
Vast amounts of Land.
Ethiopia’s vast land, favorable climate, and water and land resources combine to make it an incredible hub for investment. Located in the Horn of Africa, Ethiopia is at the crossroads between Africa, the Middle East and Europe. Within easy reach of the Horn’s major ports, Ethiopia is close to its traditional markets for export products—the Middle East and Europe. This geographical proximity provides the
major exporters in the world unparalleled access to the Ethiopian floricultural market.
Improved investment code
New incentives have been offered to investors since Ethiopia’s investment code was revised in May 2002. The floricultural sector in particular has strong backing from the Government. Incentives such as a five-year tax holiday, duty-free imports of machinery and easy access to bank loans and land have attracted investors. As a result of these and other incentives, Ethiopia's flower business is booming
and could potentially overtake coffee as the country’s main export commodity. Below are some major
incentives granted to investors:
Economic environment
Labor and unemployment
Ethiopia also has globally competitive advantages for quality produce, cost of freight, cost of production and proximity to markets. Labor costs are cheaper than many African countries already involved in floriculture export. Investments by floricultural companies have created employment opportunities for 16,626 workers (directly) and 66,504 others (indirectly).The labor intensive process required for seeding, cultivating, packing and exporting makes the floriculture sector unique in absorbing a huge labor force.
Trade association
The Ethiopian Horticulture Producer Exporters Association (EHPEA) was created to provide a forum for exporters of cut flowers. The trade association currently has 66 member companies, is growing rapidly, and is available to provide advice and membership that could be of benefit to foreign investors looking to import flowers from Ethiopia.
The country’s floriculture potential is high thanks to diverse agro-ecological conditions for all-year-round production, an abundant, low-cost and easily trained labor force, the proximity to E.U. and Middle East markets and strong government support. “I don’t think there is anywhere else in the world where flowers are produced at a cost of less than 20 dollars per hectare of land per year,” according to Ethiopian Minister of Trade and Industry Girman Birru. “I don’t think there is any country around that has a labor force as disciplined as ours, nor a government so totally in support of promoting and developing the sector on a day-to-day basis".
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