Kimathi Njoka And Reuters
26 March 2008
Nairobi — Earnings from the horticulture sector, which is the largest exporter of cut flowers to Europe, soared to 63 per cent last year to overtake tourism as the country's leading foreign exchange earner.
The Central Bank said the industry, which also produces fruit and vegetables, earned Sh70.3 billion ($1.12 billion) from exports lat year. This beat tourism, which earned an estimated Sh65.4 billion last year, according to the Kenya Tourist Board.
Horticulture employs two million Kenyans directly, 80 per cent of them small-scale farmers, according to the Fresh Produce Exporters' Association (FPEAK).
"Growth in this (horticultural) sub-sector was buoyed by good export prices of the key export commodities, as export values increased faster than increase in volume of exports," said Central Bank in its monthly economic review for February.
Horticultural officials said the industry was only slightly affected by post-election violence at the start of this year, which hit the tourism industry badly.
A large proportion of last year's earnings came from flowers, which accounted for Sh43.1 billion or 64 per cent.
The floriculture industry has in the past come under heavy criticism from human rights activists and politicians most of them based in Naivsha being accused of human rights violations.
For the better part of last year, the Kenya Flower Council was in the news complaining of reduced earnings, a situation it blamed on a strong shilling. In the past six years, the shilling strengthened against major currencies, the most notable being movement from Sh80 to Sh66.50 to the dollar.
The council also mounted a serious campaign to woo British consumers about the benefits associated with buying fresh produce from Kenya as food miles and carbon footprints debates continued.
Under the food miles and carbon footprints campaign, leading supermarkets in the UK discourage the buying of air freighted products to reduce emissions of carbon dioxide into the environment.
The sector also benefited from a Sh1.9 billion horticultural marketing programme by the International Fund for Agricultural Development to boost income and improve health and quality of life for poor rural farmers.
The initiative, the Smallholder Horticulture Marketing Programme was set to benefit between 12,000 and 85,000 households.
Central Bank also said sugarcane output increased by 9.3 per cent to 520,100 tonnes last year.
The bulletin added that the current account deficit increased to $1.16 billion in last year, up from $529 million in 2006, largely due to a $547 million rise in machinery and transport equipment imports.
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