EA’s flowering exports nipped in the bud

The state-owned Development Bank of Ethiopia, which has lent over 800 million birr to the flower sector, is struggling with rising bad debts as the limping flower industry fails to honour debts.

Ethiopia announced last February that it had registered a 40 per cent shortfall on its set target from the past 18 months and that has climbed to 50 per cent at the moment.

Meanwhile, dismayed Ethiopian exporters and growers who addressed their complaints to top government officials have still not received any positive feedback.

“The decline is very dramatic. We are trying to cope with the problem in every way we can but we don’t know what will come out of it in the future,” said Mr Abebe.

In the global flower market, Ethiopian exports have increased five-fold between 2006 and 2008.

The problems in Ethiopia are increasing by the day. Workers are striking frequently for non-payment while the taxman is threatening to take them to court for failure to pay taxes.

In Uganda, where the flower industry is not well established, some European buyers are going bankrupt.

Juliet Mosoke, executive director of the Ugandan Flower Exporters Association, says: “Some of our buyers have closed down due to insolvency while others have not expressed interest in signing up new contracts”.

The prices have also dropped considerably, so much so that they at times do not cover freight charges.”

Growers are asking the government to provide them with a guarantee fund to help them weather the global financial crisis.

Ms Musoke said banks fear to lend money because they are not sure they will be able to recover it.

Several flower companies have halted exports because of low prices.

Some firms which had embarked on expanding their yields have put these programmes on hold.

Last year, the sector saw export volume rise by 200 tonnes.

The country earned $34 million out of 6,799 exported tonnes, up from $32 million from 6,559 tonnes exported the previous year.