Kenya’s floriculture industry is one of the country’s biggest foreign exchange earners and employers — is facing mounting pressure from rising taxes, delayed VAT refunds and escalating freight costs, putting over 200,000 jobs and KES 108 billion in annual export earnings at risk.
Despite remaining globally competitive and contributing 1.6 per cent to Kenya’s GDP, industry players warn that without urgent policy and regulatory reforms, the sector’s growth trajectory could stall — undermining the Bottom-Up Economic Transformation Agenda (BETA) and rural livelihoods across key producing counties.
Why Kenya’s Floriculture Industry Matters
The floriculture sector is one of Kenya’s most resilient export industries, supplying premium flowers to Europe, the Middle East, Asia and the United States.
By the numbers (2024):
- KES 108 billion (USD 835 million) in export earnings
- 1.6% contribution to national GDP
- 18% of total national exports
- 200,000 direct jobs, supporting over 2 million livelihoods
- One of the largest formal employers of women in rural Kenya
The sector anchors rural economies, supports county development goals and remains a critical source of foreign exchange.
Growth Potential: What Kenya Stands to Gain
With a predictable and supportive business environment, Kenya’s floriculture industry could deliver significant economic gains by 2030: Export earnings growing to over USD 1.4 billion, expansion of production by 5,000 hectares and creation of 20,000 additional jobs through value addition.
These outcomes directly support BETA priorities on export-led growth, job creation, climate-smart agriculture and MSME empowerment.
Small and Medium Growers Driving Inclusive Growth
Smallholder and medium-scale flower growers are increasingly supplying export markets through consolidation models, especially in: Nakuru, Laikipia, Kiambu, Meru, Uasin Gishu and Nyandarua. This expansion is critical for: increasing rural household incomes, strengthening county-level export earnings, diversifying Kenya’s export supply base and building long-term sector resilience. However, many first-time exporters require affordable compliance systems and predictable regulations to remain competitive.
Sustainability Gives Kenya a Global Edge
Kenya remains a global leader in sustainable floriculture through the Kenya Flower Council (KFC) Flowers and Ornamentals Sustainability Standard (FOSS). Over 80% of flower exports are FOSS-certified which ensures compliance with global pesticide residue limits, protects worker welfare, fair wages and safe workplaces, promotes gender equality, childcare and women’s leadership and strengthens environmental protection and climate resilience.
This certification underpins buyer confidence and protects Kenya’s access to premium markets.
Air Freight and Trade Fairs: Market Access Under Pressure
Global trade fairs remain essential for:
- Securing export orders
- Retaining market share
- Expanding into Asia and the Middle East
However, high air freight costs at JKIA and limited cargo capacity continue to erode competitiveness, especially during peak seasons. Without targeted logistics reforms, Kenya risks losing ground to emerging flower producers.
Despite its strong fundamentals, Kenya’s flower sector is facing serious constraints that threaten growth, jobs, and export earnings.
High and Unpredictable Taxes
Growers grapple with over 50 levies, fees, and charges imposed by both national and county governments. The resulting compliance burden raises operational costs and discourages investment.
Delayed VAT Refunds
A VAT refund backlog exceeding KES 12 billion is creating severe cash-flow challenges. Many growers are forced into expensive borrowing, with some even halting expansion plans due to financial strain.
Rising Input and Logistics Costs
The cost of packaging, certification, and freight continues to climb. Tax policies, including KEBS levies, UCR fees, and excise duty on kraft paper, further discourage value addition and hinder competitiveness.
Policy Recommendations by the Kenya Flower Council
To safeguard jobs and export earnings, the Council proposes actionable reforms:
- Restore Liquidity: Fast-track verified VAT refunds, remove caps for large exporters, and allow VAT offsets against tax obligations.
- Rationalise Levies: Consolidate multiple charges into a single predictable levy, exempt agricultural exports from KEBS Standards Levy, cap the UCR levy, and abolish excise duty on kraft paper.
- Improve Trade Facilitation: Digitise approvals under an “apply once, pay once” system, conduct regulatory impact assessments before introducing new taxes, and invest in cold-chain and air freight cost-reduction mechanisms.
Why Immediate Action Matters
Creating a predictable business environment will: Protect over 200,000 jobs, unlock USD 1.4 billion in exports by 2030, strengthen Kenya’s global competitiveness and accelerate rural development and SME growth
About the Kenya Flower Council
The Kenya Flower Council (KFC) is the leading Business Membership Organisation representing flower producers, exporters and value-chain actors. Established in 1996, KFC promotes sustainable agriculture and trade compliance through the internationally recognised FOSS standard.