East African flower growers can expect a boost in business thanks to a new tax break from the UK. Announced by the UK High Commission in Nairobi, the initiative offers duty-free access for cut flower exports from the region until 2026.

This means East African flower businesses can now export unlimited quantities of their blooms to the UK at a 0% tariff, even if the flowers are routed through a third country or auction house before reaching their final destination. This eliminates the additional costs associated with these intermediary stops, which are common for many East African flower shipments.

The tax break applies to all East African nations known for their flower production, including Ethiopia, Kenya, Rwanda, Tanzania, and Uganda. Kenya, a major player in the global flower market ranking fourth in exports for 2022, and Ethiopia, the second-largest producer in Sub-Saharan Africa, are expected to see significant benefits. Estimates from the UK High Commission suggest Kenyan flower exporters alone could save over 1.5 billion shillings (approximately $11.55 million USD) annually.

In the first five months of the current fiscal year, Ethiopia earned USD 184.7 million from flower production. Despite earning revenue, there was a 30% decrease compared to the same period last year, with challenges cited as inadequate infrastructure, lack of coordination, and related issues..

In December last year, Ethiopian cut flower producers initiated partial trial shipments of flowers to Europe by sea, marking a significant development in the sector. The objective of the trial shipment was to deliver the flowers in excellent condition to the Netherlands within a maximum of four weeks. While air transport is the prevalent method, some producers and foreign importers are exploring sea shipment due to its potential cost advantages and lower carbon footprint.

Source: Xinhua

Additional source: 2Merkato Archives