Kenya’s flower industry is turning out to be the hardest hit sector by the COVID-19 pandemic, seeing that most farms are beginning to send home their employees as a result of reduced business.
According to Standard Digital, more than 1,000 seasonal workers from various flower farms in Naivasha have already been sent home, with a likelihood of their contracts being terminated altogether.
According to Kenya Flower Council CEO, Clement Tulezi, several flower farms have already suspended shipping of their flowers to several EU countries, even as the Dutch auction, which is the main market for Kenya’s flower exports has recorded a 50% drop in exports.
“There is no demand in Europe. Almost the entire market has collapsed. Technically, our industry is on lockdown,” adds Tulezi.
Additionally, Bloomberg reports that farms are exporting only 20% of the 60 tons of cut flowers they would normally send daily to markets including the UK, Netherlands and Germany, with the rest being destroyed.
Most countries have issued travel bans to Europe following the COVID-19 virus outbreak, a move which is meant to curb the spread but has adversely affected the supply chains for trading partners.
The ripple effect for the Kenya Flower Industry includes:
- Downsizing and closure of business
- Limited cargo space
- Labour related conflicts
- Disruptions in operating capital for businesses
Therefore, the Flower Council is now asking the government to undertake the following as measures to ensure the industry’s survival:
- Quickly process VAT refunds that amount to about KSh9 billion
- Provide tax relief
- Allow freight handlers to continue operations undisturbed
- Suspend VAT on inputs and spare parts
The flower industry is among Kenya’s largest foreign exchange earners, and is the world’s 4th largest flower exporter. It has created jobs for close to 150,000 people. In 2018 alone, cut flowers earned the country KSh113 billion.