Flower growers halt expansion projects over tax refund delay

Kenya Flower Council CEO Clement Tulezi and COO Catherine Mukoko during 2025 Update in Nairobi.  [Jonah Onyango, Standard]

The majority of Kenya’s floriculture industry has put on hold development projects due to government delays in releasing VAT refunds, compounded by numerous levies, fees and charges that have created unpredictability and increased operational costs.

Clement Tulezi, Chief Executive Officer of Kenya Flower Council (KFC), says delayed VAT refunds currently held by the government exceeds Sh12 billion, putting pressure on growers and forcing them into costly borrowing.

He reveals that the industry is burdened by more than 50 levies, fees and charges, which continue to undermine predictability and increase operating expenses.

Despite these barriers, flower industry remains one of the country’s most resilient and globally competitive export sectors.

Tulezi explains that the sector contributes approximately 1.6 per cent of national GDP and 18 per cent of Kenya’s total export earnings, sustaining over two million livelihoods across production regions.

In 2024, export volumes and farm-gate values recorded modest growth despite global inflation and high freight costs, demonstrating sustained market confidence in Kenya’s flowers.

In 2024, the flower industry generated Sh108 billion in export earnings.

The sector directly employs about 200,000 workers and supports over two million livelihoods, particularly among women and youth.

The industry has also recorded a notable increase in participation by smallholder growers supplying export markets through consolidation.

The expansion of smallholder and medium-scale farms in counties such as Nakuru, Laikipia, Kiambu, Meru, Uasin Gishu, and Nyandarua Counties has been perceived to be healthy for the sector.

“This expansion is critical for inclusive growth, rural income diversification and accelerating Kenya Kwanza’s vision to empower small growers as engines of job creation and regional economic development,” Tulezi explains.

He spoke during a floriculture industry forum while accompanied by KFC, Chief Operating Officer Catherine Mukoko.

Tulezi noted that many of these farms are entering export markets for the first time and therefore require predictable regulatory policies and affordable compliance pathways.

“Supporting growth among smaller farms is critical as it expands household incomes in rural areas, increase county-level export earnings, deepens Kenya’s competitiveness through diversified supply and strengthens resilience by broadening the producer base,” he says.

He explains, with supportive policies, the sector, which anchors the rural economies and earns Kenya a critical foreign exchange, can grow revenues from $835 million in 2024 to over $1.4 billion by 2030.

It could also expand production by an additional 5,000 hectares over the next decade and increase value addition at source, with the potential to create an extra 20,000 jobs.

“These ambitions align directly with Kenya’s economic pillars of export-led growth, job creation, climate-smart development and Micro, Small and Medium Enterprises (MSME) empowerment,” Tulezi said.

Addressing concerns over pesticide use, Tulezi stressed that Kenya remains a sustainability leader through the Flowers and Ornamentals Sustainability Standard (FOSS) administered by KFC, which enforces rigorous pesticide controls, environmental protection measures, responsible chemical handling, gender safeguards and supply-chain transparency.

He reveals, over 80 per cent of Kenya’s flower exports are certified under the FOSS, positioning Kenya as a global model for ethical and environmentally sustainable floriculture.

The FOSS framework ensures responsible pesticide use, compliance with global residue standards, safe working environments, fair wages and strong labour protections.

“The standard is internationally benchmarked, giving Kenyan flowers global market acceptance and assuring buyers of ethical sourcing,” he says.

Tulezi notes that the industry’s continued participation in global trade fairs has helped Kenya retain its market share, secure reliable logistics channels, attract new buyers and expand into emerging markets such as Asia and the Middle East.

He adds, government facilitation of trade missions, export promotion financing and bilateral trade agreements have been vital in unlocking these opportunities.

“These platforms enhance buyer confidence, drive market expansion and generate direct export orders. Continued government support also strengthens national branding and promotion, showcasing Kenya’s sustainability leadership and enabling deeper penetration into the Middle East, Asia, and U.S. markets,” he says.

While acknowledging government support for the flower industry, Tulezi says urgent reforms are still required to align the sector with transformative objectives of improving the investment climate, protecting jobs and expanding exports.