Ethiopia threatens to grab Uganda’s flower investments

Mar 21, 2005

UGANDA risks losing flower investments to Ethiopia unless the Government offers similar incentives to attract investors, Uganda Flower Exporters Association officials have warned.

By Sylvia Juuko

UGANDA risks losing flower investments to Ethiopia unless the Government offers similar incentives to attract investors, Uganda Flower Exporters Association officials have warned.

A flower exporter, who recently visited Ethiopia with a group of 30 Dutch investors, said unless Uganda offered similar incentives, he would not recommend his company to expand here.

“Ethiopia invites flower investors to visit the country. Government officials help them identify land for use, a contract is signed and two weeks later, a road is cut and electricity connected,” he said.
The flower exporter said the one-stop investment centre ensures that all necessary paperwork is processed quickly and an investment permit issued within 10 days.

“In addition, the grower is given a tax holiday and access to long-term loans (over 10 years) at a 7% interest rate,” he said.

However, Dr. Maggie Kigozi, the executive director of Uganda Investment Authority (UIA), said they were addressing investors’ concerns.
“We have worked with the flower sector from 1997 and it has grown from exporting zero to more than $30m (sh51.6b) a year.

The law to establish Export Promotion Zones is with the finance ministry and will include incentives like provision of 100% tax holiday for 10 years, which is competitive with Ethiopia,” Kigozi said in an interview on Monday.

She said Value Added Tax on equipment had been removed, while issues on fertilisers and green houses have been addressed.

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