- East Africa
- Trade - Finance
Meles Zenawi optimistic about Ethiopian flower industry
Flower producers hold 2nd international exhibition
Ethiopian flower producers and exporters have used their exhibition, which opened Wednesday, to call on Ethiopian, Prime Minister Meles Zenawi, to urge state owned development bank to reschedule installments of their due balance as well as a cutback on freight tariffs.
This is the very first time exhibitors have met with the Prime Minister, who opened the second international exhibition organized by the growers and exporters association of Ethiopia. The massive involvement of some 130 exhibitors, including foreign buyers, companies involved in flower seed and chemical supplies have contributed to the opening success of the exhibition.
Tsegaye Abebe, Chairman of the Ethiopian Horticulture Producers Exporters Association (EHPEA), lauds the proposal for rescheduling of debts. “It is unfeasible to service our debts with the current economic downturn unless banks become willing to reschedule our obligation and freighters cutback their tariff” Tsegaye addressed attendants.
Though he did not categorically specify banks and freighters in his speech, he was seen busy deliberating with the Prime Minister who finally commended stockholders operating in the sub-sector to synchronize efforts toward ensuring the sustainable development of the flower sector since it is an important foreign currency earner for the country.
The state owned Development Bank of Ethiopia which has lent over 800 million birr since the flower sector boom have been met with heavy setbacks in a backdrop of growing economic strains on the flower industry that has hampered the honouring of debts from the borrowers. This situation led the bank to issue public foreclosures a few months ago, but again they are faced with another hurdle: finding buyers.
The global economic downturn coupled with a severe winter season in Europe, which has affected the transportation and preservation of exported flowers, has greatly affected the flower producing eastern African region, known to be among the oldest flower producing regions in the world.
Ethiopia announced last February that it had registered a 40 per cent slump in its set target from the last 18 months.
The slump is, however, largely blamed on the weakened currencies of export destinations, which have impacted prices. The United Kingdom Pound Sterling has weakened by nearly 30 per cent in the last year alone, while the Russian currency, the Rubble, has also, reportedly, lost about 35 per cent of its value. The Euro Zone, which is yet to experience a currency pitfall, is said to have resorted to auctions, an action that is open to unexpected results, due to oversupply.
Meanwhile, dismayed Ethiopian exporters and growers who addressed their complaints to top government officials have still not received any positive feedback to date. This, according to the association, is what pushed them to use the exhibition as a platform to address this growing concern. According to them, the Prime Minister’s intervention has sparked renewed optimism among some exporters.