Britain Cuts Off Tariffs to Ethiopian Flowers

Britain has announced a significant policy change regarding the importation of Ethiopian flowers, allowing them to enter the country duty-free.

The British Trade Commission issued a statement lifting the 8 percent tax previously imposed on traders importing flower products into the UK, effective from April 11, 2024.

This decision marks a pivotal moment for both British and East African economies. John Humphrey, the British Trade Commissioner, highlighted the positive implications of this move, emphasizing that tax-free imports will not only benefit flower producers and traders in East African countries but also stimulate flower production in Britain.

Humphrey emphasized the mutual benefits derived from trade relations between the UK and East Africa, affirming the commitment to fostering further growth in trade.

The significance of this policy change is underscored by the economic importance of the flower industry in East Africa.

Kenya, ranked as the fourth largest exporter of cut-flowers globally in 2022, commands 6% of the global market share.

Ethiopia, the second-largest cut flower producer in Africa, contributes substantially to Sub-Saharan African exports, constituting 23% of the market.

In 2023 alone, the value of trade in cut flowers between the UK and East African countries was substantial, with Ethiopia leading at £12.6m, followed by Rwanda, Tanzania, and Uganda.

This tax relief extends beyond East Africa, impacting major flower-growing regions worldwide.

The suspension of the 8% duty for cut flowers will remain in place for two years, from April 11, 2024, to June 30, 2026.

It’s worth noting that these East African countries enjoy exemption from tax tariffs on flower exports to Britain, whether directly or through intermediary countries.

Britain’s decision to grant tax relief for imported flower products for two years underscores its commitment to strengthening relations with Africa.

The anticipated trade volume, exemplified by Ethiopia’s projected £12.6 million worth of flower exports to Britain in 2023 alone, signals a promising future for bilateral trade.

The Ethiopian Flower Producers and Exporters Association welcomed the British government’s tax relief, foreseeing increased productivity and economic growth.

With Ethiopia exporting 30% of its products, including flowers, to European countries, and utilizing the Netherlands as a hub for exports to other nations, this policy change holds significant implications for the broader European market as well.

Looking ahead, Ethiopia aims to generate $1.7 billion from coffee exports in the current fiscal year, yet the earnings for the first half of the year amounted to only $570 million.Top of Form

The Ministry of Trade and Regional Integration has reported that Ethiopia earned $285.53 million from the export of oilseeds and pulses over the past six months.

Ethiopia’s export destinations for oilseeds include Israel, the United Arab Emirates, Singapore, Vietnam, and the United States, while grains find markets in India, Pakistan, Singapore, Vietnam, and Kenya.

Despite these successes, the export sector faces several challenges, including security issues, rising logistics costs, smuggling activities, limited understanding and implementation of marketing laws, and capacity constraints.

In contrast to the positive performance in oilseeds and grain exports, Ethiopia experienced a loss of $200 million from its leather products and mineral trade.

By ethionegari@gmail.com

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