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February 14, 2008

Booming floriculture industry fuels Ethiopian economic growth

Emebet Tesfaye is looking forward to Saint Valentine's Day - but her reasons are more businesslike than romantic.

As manager of Ethiopia Highland Flora's 20-hectare flower farm in Sebeta, in Oromia regional state, Emebet anticipates a 50% boost in export demand as European thoughts turn to love. That translates into sales of more than 150,000 rose stems a day - and more welcome work for her 420-strong, mostly female labour force.

Ethiopia Highland Flora, a three-year-old, $6.6m (£3.4m) Ethiopian-Dutch joint venture, is literally at the cutting edge of the Ethiopian government's drive to break the cycle of poverty, drought and famine that made the country a byword for misery in the 1970s and 1980s.

"Our aim is to make poverty history, stop begging for food and get back our pride. We are concentrating on development and foreign investment, especially in agriculture," said Teferi Melesse, a senior official.

Vying with established coffee, tea, textile and livestock products, floriculture is the new star turn of an economy that is 80% agricultural. Land under cultivation for flowers is projected to treble by 2009. Exports were worth $12.6m in 2005, compared with $660,000 in 2001.

More than 80,000 jobs have been created in or around 77 flower farm companies. Government tax and investment incentives, and low labour costs even by African standards, mean Ethiopia is beginning to edge out traditional suppliers such as Kenya.

Emebet is plainly proud of what has been achieved at Sebeta. Visitors to the farm are conducted through giant, temperature-controlled and irrigated greenhouses scented by tens of thousands of pristine rosebuds. Demand is growing in Europe and the Middle East, and more environment-friendly greenhouses are planned. The government had been supportive, Emebet said, effectively underwriting start-up capital and land-leasing while encouraging a profit-driven, free enterprise approach.

This hybrid collectivist-capitalist mix has become the signature policy of the prime minister, Meles Zenawi, a former leftwing guerrilla who, since winning power in 1991, has gradually embraced free market solutions and western alliances.

As in other commodity markets, first-world middlemen who set the price of cut flowers, plus escalating air transport costs, posed obstacles to long-term success, Emebet said. "I don't think we get a fair price. It's hard to say, but I think the price we receive should be 50% higher."

An average flower farm worker earned about 10 Ethiopian Birr a day, or just over $1. "For them it's a good wage," she said with a wry shrug.

Government officials say Ethiopia has now established a sound model for macroeconomic success, based on Meles' so-called Agricultural Development-led Industrialisation strategy (Adli). Growth in 2007 was over 10%, and foreign investment, notably from China and India, is rising.

Infrastructure developments, including road building, fibre-optic networks, and hydroelectric projects that will eventually sell energy to Kenya and Sudan, are other points of pride and hope.

Ethiopia remains dependent on foreign assistance and aid. But optimism about the future is growing.

The Guardian

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