Liquidity crunch hits flower exports

Rwanda has not registered any flower exports this year due to tightening liquidity in the banking system and uncertainties on the international market, according to Rwanda Horticulture Development Authority (RHODA). Last year, Rwanda introduced the ‘one flower park’ project seeking to pull together local and foreign investors to grow quality flowers, mainly for export. But RHODA says government is likely to miss its flower export target. “The low liquidity in the banks that makes it impossible for investors to access loan has been noted as a major impediment to the growth of the sector,” Peter Muvara, the Chairperson of RHODA said in an exclusive interview with The Business Times . The $17.5 million project introduced in 2008 would help cultivate 50-200 hectares of flowers to boost the crop’s export receipts to Rwf323 million in 2009 from Rwf14 million registered in 2008. Muvara said flower prices on the international market have declined by 15 percent “The flora business is such an expensive venture that Rwandese may not be able to develop alone and there are no foreign investors coming into the business,” explained Muvara. He said that to operate one hectare of land for a profitable business, it requires $400,000 (Rwf227 million) hence low local investment. Last year the flower industry attracted two foreign investors including the East African growers from Kenya and Myire estate. The investors have since pulled out of the Rwandan market citing the uncertainty on the international flower market due to the current global economic downturn. The decline in the flower business comes on the heel of government incentives extended to investors in this business. The incentives include free land, training of technicians, free taxes on inputs for production and a sound policy environment. “We will keep mobilizing the investors to join the industry as a way forward and we are thinking about public, private partnership,” Muvara added. Ends

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Liquidity crunch hits flower exports