Recovery of flower sector under threat

The flower sector continues to be under threat due to the resurgence of Covid-19 cases in key export markets. PHOTO/FILE

Summary

•  According to Bank of Uganda, earnings from flowers dropped to $57m (Shs213b) for the period between August 2019 and August 2020 from $61.3m (Shs229.8b) 

By Dorothy Nakaweesi

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Cumulative flower earnings dropped for the year ended August, according to data from Bank of Uganda. 
The flower industry, which is one of Uganda’s largest foreign exchange earners, suffered under the global Covid-19 related lockdown, with earnings for the year between August 2019 and August 2020, falling to $57m (Shs213b) from $61.3m (Shs229.8b). 

However, the industry has been showing signs of recovery but the recovery is being threatened by a possible second lockdown in parts of Europe, which players say will make the already weak sector, worse. 

Europe is Uganda’s largest flower market but countries such as German, France, UK and Italy have shown concern over an increase in Covid-19 infections and some have been forced to institute partial or full lockdowns in some parts of their countries. 

Speaking in an interview at the weekend, Ms Esther Nekemba, the Uganda Flowers Exporters Association executive director, told Daily Monitor that most of the industry players had resorted to ensuring that their businesses survive through the storm, noting that they are now trying to tap into online trading channels to expand as well as consolidate their market. 

The flower sector, according to data from Bank of Uganda has lost close to Shs16b, representing a decline of 7 per cent in just one year. 

The decline, according to industry experts, has not only affected revenues but threatens thousands of jobs in the sector. 

In the period during March, April and May, the flower industry suffered the worst monthly declines, with export receipts recording just $3.2m, $3.8m and $4.2m, respectively from a monthly average of $6m.

However, earnings started to recover in July and August with the industry registering $5.84m and $5.2m, respectively. 

But the recovery is being threatened by the resurgence of Covid-19 infections, especially in Europe. 
Mr Ramathan Ggoobi, a lecturer at Makerere University Business School, said at the weekend the threat of rising numbers of Covid-19 cases in Europe could be devastating on Uganda with exports such as horticulture facing the worst scare.   

At least 90 per cent of Uganda’s flowers are exported. 
“Germany, UK, France and Netherlands are big markets for Uganda not only for flowers but for other agricultural exports such as coffee,” he said, noting that in the event of a second lockdown, exporters will  heavily be impacted. 

Regional and local markets                               
Although the flower export market is likely to suffer in the event of a second lockdown in Europe, Mr Ggoobi thinks that Ugandan exporters should exploit the gap created by a slowdown in imports to the East African region. 

As a whole, he says, exporters of, especially processed food and horticulture should take advantage of both the local and regional markets to boost their volumes. 

dnakaweesi@ug.nationmedia.com