Flower exporters lose Sh200m to protests as manufacturers hurt

Fuel price hike has affected the flower economy

Key sectors of the economy have recorded heavy losses, following the  two-day matatu strike that saw logistics ground to a halt as matatus, trucks and digital taxis stayed off the roads.

The matatu industry moves well over 70 per cent of Kenya’s workforce daily, and generates about Sh250 billion annually for the exchequer.

The Kenya Private Sector Alliance projections show the country loses billions of shillings whenever there are protests, with the transport slowdown disrupting the economy that is already reeling from high taxation.

Throughout the two days, people were unable to make it to their workplaces while deliveries of critical products such as fresh produce and raw materials never made it to markets, affecting manufacturing, retail and other key sectors.

The Kenya Flower Council said the strike significantly affected the movement of workers, cargo, and critical logistics supporting Kenya’s floriculture industry.

The floricultural industry reported losses of up to Sh200 million for Monday alone, due to delayed shipments and wastage risks.

The industry also estimated that between 100 and 200 tonnes of flowers scheduled for export on Monday were delayed or affected in varying degrees.

This disruption comes at a time when the industry is already hurting from elevated global freight costs, reduced cargo capacity, and ongoing geopolitical disruptions affecting international supply chains.

Recent industry data shows Kenya’s flower sector has already been losing up to Sh180 million ($1.4 million) every week due to cargo and logistics disruptions linked to global conflicts, rising freight costs, and broader supply chain instability.

The flower industry relies on highly time-sensitive logistics and uninterrupted cold-chain transportation to move fresh flowers from farms to Jomo Kenyatta International Airport for export to international markets.

Conomic consequences

Kenya Flower Council Chief Executive Clement Tulezi warned that prolonged disruption to transport and logistics carries immediate economic consequences not only for exporters, but also for workers, rural communities, supply chain partners, and Kenya’s reputation as a reliable global supplier of flowers.

“Without timely intervention, the combined effects of transport disruptions, rising fuel prices, and broader global logistics pressures could significantly impact exports, investment confidence, production continuity, and employment across the floriculture value chain,” Tulezi said.

He urged Kenya to strengthen the resilience of its transport, logistics, and energy systems to safeguard strategic export industries from recurring disruptions.

According to Tulezi, priority should be directed towards restoring normal transport operations, cushioning export-oriented industries against escalating fuel and logistics costs, and enhancing cargo movement and long-term operational resilience for strategic export sectors such as floriculture.

“Farm attendance in several growing regions dropped by between 10 per cent and three per cent due to transport challenges affecting workers,” Tulezi said, adding that Cargo trucks transporting flowers to JKIA experienced major delays because of blocked roads and reduced movement within Nairobi.

“Export timelines for perishable flowers have been disrupted, increasing the risk of product quality deterioration and rejection in destination markets.”

The Kenya Association of Manufacturers Chief Executive Tobias Alando noted that the cost of transport directly influences the cost of transportation, food production, agriculture, manufacturing, and the movement of goods and services nationwide, ultimately affecting the cost of living and the competitiveness of businesses. “Transportation of raw materials and finished products remains heavily dependent on diesel-powered vehicles, while some manufacturers use petroleum products directly as raw materials,” Alando said.

Alando said high fuel prices will significantly increase both production and distribution costs across multiple sectors.

“This implies that the price of consumer goods can be expected to rise,” he said, projecting that the fuel cost component in electricity tariffs is also projected to increase from the current Sh3.47 per kWh, compounding the cost burden on businesses and households.

For the manufacturing sector, fuel is a critical input throughout the value chain from the sourcing of raw materials to production and the distribution of finished goods. Manufacturers rely heavily on automotive gas oil, industrial diesel oil, and heavy fuel oil in their operations.

Currently, taxes and levies on fuel account for about 46 per cent of retail fuel prices, a burden that manufacturers say continues to exert considerable pressure on manufacturers and Kenyan households.

These concerns are compounded by the challenging economic environment marked by high taxation, rising operational costs, and increased cost-of-living pressures. “These disruptions result in interrupted operations, delayed production schedules, supply chain inefficiencies, and reduced productivity, ultimately affecting overall economic performance,” Tobias Alando said.

Manufacturers called on the State to review various fuel-related taxes and levies to ease pressure on the economy and protect the competitiveness and productivity of local manufacturers.