HOLETA, Ethiopia (AFP) – The smell of flowers is displacing the aroma of coffee as a driving force in the Ethiopian economy.

Booming floriculture is set to upstage decades-old coffee production as the top foreign exchange earner, with projected revenue looking rosy.

Boosted by government incentives and favourable market conditions, horticulture producers are targeting earnings of 1.4 billion dollars (960 million euros) within five years, more than Ethiopia’s total exports in 2006.

The country expects to earn more than 125 million dollars from flower exports in 2007, a five-fold increase on the 2006 figure.

The coffee sector exported around 176,000 tonnes of produce, earning 421 million dollars last year, according to official estimates.

“By developing 70,000 hectares (173,000 acres) of land for vegetables and fruits, as well as another 4,500 for flowers, we can anticipate a major increase in production,” said Tsegaye Abebe, the head of the Ethiopia Horticultural Producers and Exporters Association.

In recent months, dozens of private flower farms have sprouted up across the country owing to tax exemptions and long-lease arrangements for farmland.

In Holeta, 50 kilometres (30 miles) west of the capital Addis Ababa, greenhouses for the culture of roses line the road on land which was barren five years ago.

More than a 100 foreign firms were cultivating flowers by the beginning of this month, and of these eight operate in Holeta, one of Ethiopia’s flower heartlands, according to the Ethiopian trade ministry.

“There is a thriving flower industry in this country … the climate, cheap labour and production costs have appealed to growers from many countries,” said Dhairyasheel Shinde, manager of Ethiopian-Indian flower firm, Holeta Rose plc.

“We grow nine types of flowers, the country’s climate offers opportunity to grow both high altitude and low altitude flowers depending on your flavour,” added Shinde, who employs 450 local people on 15 hectares of land.

Such incentives have enticed growers from flower-exporting countries such as Kenya, India and the Netherlands to flock to the impoverished Horn of Africa nation in recent years.

Exporters cite Ethiopia’s location: its proximity to the Middle East and availability of direct flight connections to Europe, Asia and North America.

The climate also enables production of highly marketable premium grade roses as well as summer flowers and carnations.

The new investment also provides employment to thousands of people in Ethiopia which has a population of 81 million and average per capita income of 160 dollars.

But the success story does not come without challenges. A lack of skilled manpower and dearth of cooling facilities are the shortcomings the government is trying to solve.

“Our experts mainly come from India and Kenya, but we are working to provide research programmes at university levels so that we can have more local experts and supervisors on the field,” said Fantaye Biftu, a trade ministry official.

“Seeing the trend, flowers will certainly overtake coffee in the number one spot,” says Tsegaye.

“But as much as we want the sector to develop, we also want the coffee industry to develop as this would extremely benefit the country.”