Cut flower exporters decry high cost of doing business

Cut flower exporters in the country have raised concerns over increased water charges and payroll costs that have raised the cost of doing business, eroding their competitiveness.

The exporters say the increasing taxes and charges, logistical difficulties, and additional operational costs have drained gains they would accrue from high sales after exporting to outside markets owing to the strengthening of the dollar against the Kenyan shilling.
Their main complaint is a recent increase in water charges from Sh0.5 to between Sh2 and Sh6 for irrigation and commercial use and an increase in National Social Security Fund (NSSF) contributions from Sh200 up to Sh1,080 on the employers’ side.

“Water charges have risen from the previous 50 cents to between Sh2 and 6 for irrigation and commercial use. And, as you are aware, floriculture is a heavy user of water. This increase, therefore, compounds the existing situation in the sub-sector. And energy cost is expected to increase soon,” said Kenya Flower Council (KFC) Chief Executive Clement Tulezi.

The council laments that factors including high freight charges and many taxes on the sector last year saw Kenya’s flower exports drop by 15,000 tonnes, from the 210,000 tonnes exported in 2021.


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