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    The Soft and Scented Uganda Economy

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    All our celebrations are adorned with a ‘special rose’, but do ever envisage the procedures it goes through in production in order to beautify our festivities and engulf our aura with a tantalizing soft and scented fragrance?

    As a senior presidential adviser on industry and one of the board members of Fresh Handling Limited; I have a keen compelled to originate this article in order to create awareness about the silent but powerful Ugandan floricultural industry.

    Uganda’s economy grew at 4.6% from 3.5% the GDP during FY 2021/22– faster than it had been anticipated after the reopening of the economy in January 2022.

    On the supply side, services and industry have been the main drivers of economic growth. There has also been a strong recovery in wholesale and retail trade and real estate construction and manufacturing due to availability of cement, iron and steel. On the demand side, private investment and private consumption headed toward towards pre-COVID-19 levels.

    This economic recovery culminated in soaring prices of the commodities as the financial institutions tightened their policies. For example, the central bank rate (CBR) increase from 7.5% in July to 10% by December 2022. It impacted on credit financing by the commercial banks resulting in reduced purchasing power, limited credit growth and job losses, respective household felt a negative impact from increased prices.

    In a bid to promote import substitution, the Government has now aggressively invested in tourism, export diversification, poverty alleviation projects e.g. Parish Development Model(PDM).The oil sector, agriculture and agri-business are now considered as a potential source of economic growth.

    In the same vein, allow me to focus on another pivotal industry in Uganda known as the floral sector, which creates jobs and generates revenues for our country.

    The floriculture industry, which largely produces roses and cuttings, took off in the early 1990’s, but still remains at the early stage of the development. Uganda’s flowers are grown almost exclusively for the export market, with 98% of production exported to the Netherlands.

    Of this, 90% of the flowers are sold through the direct marketing and 10% through auction sales, mainly to florists. The main types of flowers grown in the country are roses and cuttings. The industry employs 10,000 persons (2022) and 70% are women with 50,000 indirect beneficiaries.

    The total investment in the sector is $100-$150m .The area covered by the flower estate is 350 hectares.

    What hinders this industry from being more lucrative?

    Apparently, growth in the sector has stalled in recent years due to various challenges such as lack of local breeders and propagators which are a fundamental segment of the value chain. Uganda is compelled to import its inputs such as bred to withstand its own climatic conditions, which are markedly different from the condition in Uganda, making the seeds less suitable.

    A number of companies are now able to access seeds bred for the Ugandan climate, but at a significantly higher input cost. Furthermore, the European Union (EU) phytosanitary export requirements are too stringent as exporting companies must comply with the European Union’s maximum residue levels (MRL) requirements and other laws on quarantine pests such as FCM and pesticide usage.

    In order to ensure total compliance of the required standards, companies have to employ expatriates to oversee the adherence which ultimately has a cost implication to the company.

    A final, and perhaps most onerous challenge, is the need for hard currency to carry out foreign transactions, with the volatility of the exchange rate putting local farms at a disadvantage in external trade.

    Role of Government

    The Government of Uganda has made some innovations in supporting the sector’s development for several years.

    In 2026, VAT exemptions were introduced and importation tax on greenhouses removed to spur growth of the industry. It plans to offer tax holidays that allow growers to defer tax matter is yet to be approved in Parliament.

    The Government of Uganda through the office of the Prime Minister, Ministry of Agriculture, Uganda Civil Aviation Authority, European Union, Fresh Handling Limited and Horti-fresh have combined resources to construct a sanitary and phytosanitary (SPS) center and cold storage  facility at Entebbe International Airport at a cost of euro 4m.

    This facility will improve the storage and quality of the products and its proximity to the airport will ensure on-time delivery. This will be a major breakthrough because Ugandan fresh produce exports were on the verge of being stopped from entering the EU market due to lack of a professional and modern exit point which complies with the EU import regulations.

    Inspectors from the EU are expected to come and to do a final audit on Uganda’s export exit control systems and the facility is in place just in time so that Ugandan produce is not prevented from entering the EU.

    What is the status quo?

    Uganda Flower Exporters Association (UFEA) has a membership of 22 firms.

    The majority (80%) of them are involved in the growing and exporting stages of the value chain, two of these are also transporters while the rest outsource their transport to another company.

    One company is a broker and wholesaler while one categorizes itself as a grower and broker. These farms are located in Entebbe, Wakiso, Mpigi, Gayaza and Mukono

    The floriculture value chain in Uganda centers on growers. There are no local bleeders and just one freight-forwarding company that provides cold chain logistic foe 80% of the sector.

    The companies have fully integrated operations and manage their own transportation from their respective farms to Entebbe Airport.

    The top three leading companies in the flower sector earn between $10m-25m, while eight players earn between$5m and $10m. Reflecting on the undeveloped nature of the sector, half of the players earn less than $5mn, one of which earns less than $ 1m.


    Floricultural products are Uganda’s third-largest non-traditional export after gold and fish, earning the country approximately $30m in foreign exchange in 2018/19 and $82m in 2020/21.

    The main export destinations are the Netherlands, Germany, Italy, China and UK.

    Exporter values at two-digit level in billions of shillings

    (Live trees, bulbs, roots, cut flowers and ornamental foliage)

    (See the graphic above)

    The reduction in number of exports has been attributed to by the following bottlenecks:

    ~Stringent policies and regulations by EU e.g. the necessity to have phytosanitary facilities in every sub-county.

    ~Bureaucratic actions by different MDAs.

    ~Infrastructural development e.g. roads, cold storage infrastructure.

    ~High target i.e. current and projected quotas.

    ~Poor regulatory services: The number of inspectors, their infrastructure and their capacity causes unnecessary costs in the inspection process e.g. double-handling on farms in Europe;

    ~Closure of flight routes i.e. British Airways in 2015, Etihad Airways in 2018 and.

    ~ High turnover of skilled employment due to Labour export migration e.g. UAE. Saudi Arabia and Qatar.

    ~Fluctuation of foreign exchange that affects procurement of chemicals, pesticides, packing materials, UV radiation films for the greenhouses;

    ~Cost of transportation-trucks from farms to Airport and flights.

    ~High costs of electricity.

    ~ Erratic and poor quality energy;

    ~ Economic of scale:

    Uganda needs to reach 1,000 hectares to become competitive in the market. Kenya is growing at a rate of 300 hectare per year while Ethiopia reached 1,500 hectares in less than 10 years.

    Therefore, our competitors have an edge when it comes to production costs.

    If all above bottlenecks are addressed, Uganda can grow to 10,000 hectares in five years, which equates to an increase in foreign exchange by $300 to$400m

    Where next as Uganda?

    Uganda, indeed, has a lot of potential, if the Government, private sector and development partners aggressively intervene in the following areas:

    ~Upgrade infrastructure at exit points to include the inspection area, quarantine rooms, destruction equipment and laboratory testing at Entebbe International Airport.

    ~ Create regional cold rooms and pack houses for fruit and vegetables.

    ~Upgrade the zonal agricultural research and development to have inspections services, research and extension services in a one-stop center.

    ~Stimulate growth by reintroducing tax incentive (10-year tax holiday)

    ~ The Government to support the flower sector with a $10m boost in form of a revolving fund to associations.

    ~Establish a PPP between NARO and flower varieties that may withstand our climate.

    ~Uganda Airlines to consider air traffic rights to major export destinations i.e. the Netherlands, China, Germany etc.

    This is key as we face competition from Ethiopia due to the fact that their national Airline gives priority to their fresh produce in the global market at a minimum freight rate cheaper than all competitors with in the region

    ~MAAIF to continue supporting and guiding farmers into producing quality products.

    ~Interest the private sector to invest in the floriculture industry through the forming of co-operatives and consortiums.

    ~As CSR, the flower companies to skill its personnel up to medium level management of their enterprises;

    ~Financial Institutions like Uganda Development Bank (UDB) to provide more affordable and accessible credit to flower growers.

    Benefits to Uganda and EAC

    ~Creation of employment, especially youth and women.

    ~Generation of revenue for the region;

    ~Promotion of region trade;

    ~Enhancement of the livelihood of the workforce.


    Uganda’s culture of embracing flowers leaves a lot to be desired! A few of us use wreaths at funerals and the Red and Rose culture of Valentine’s Day.

    Let us go BUBU instead of importing them. How many florists’ entrepreneurs do we have? Why decorate our weddings with plastic flowers when we can afford the real ones (20 stalks of flowers at Shs. 1,500 only)?

    I applaud the Government of Uganda in partnership with the EU, FHL under the able chairmanship of Mr. Daniel Kiryango, Mr. Dimple Mehta among others and aBi Trust for constructing a modern SPS center and cold storage facility at the Entebbe International Airport whose completion will go a long way in promoting the exportation of quality products to the multilateral, continental and global market.

    A rose a day culminates in a soft and scented economy!

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