In 2022, Herman Uwizeyimana exported his first dried chilli container to China as he ventured into the 'hot commodity' business he says offers a return on investment.
Currently, Uwizeymana, who is the General Manager of Fisher Global Ltd based in Rwamagana District, exports 20 containers of dried chilli (amounting to about 300 tonnes as a container holds 15 tonnes) to the Asian country annually, implying a 10-times increase in his sales over the last two years, and market availability for the hot-tasting condiment.
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Even with the increase in export volume, he told The New Times it is far less than the demand in China, which is one of largest chilli markets in the world.
"Our chilli supply is about a third of the export market demand," he said, adding that his company wishes to increase its annual export volume to 1,500 tonnes within the next two years.
So far, the dried chilli exports by his company is of Teja variety.
In 2021, Rwanda and China signed a protocol for export of dried chilli to the latter.
Uwizeymana observed that such an agreement with China represents a huge market for Rwandan chilli farmers and exporters.
This case helps to indicate how Rwanda's chilli industry - a horticulture subsector - has potential that can be unlocked through more investments and efforts to develop the entire value chain and get more revenues through expanding exports base.
The chilli investment case
On September 6, during the 2024 Africa Food Systems Forum (AFS Forum 2024) held in Kigali, Rwanda pitched agricultural business opportunities to investors and development partners to inject almost $1.7 billion (approx. Rwf2.26 trillion) into areas including avocadoes, chilli, Irish potatoes, poultry, and and agri-food SME catalytic financing mechanism.
Particularly for chilli, the country wants $470 million (approx. Rwf627 billion) in new investments to develop the value chain.
In 2023, Rwanda exported a total of 3,403 tonnes of chilli in fresh, dry, and processed forms, which generated $4.2 million in revenue, according to data from the Ministry of Agriculture and Animal Resources (MINAGRI).
Going forward, information from MINAGRI shows the country aims to increase its chilli exports to an annual volume of 38,762 tonnes over the next six years - implying over 10-fold increase by 2030.
To achieve this ambitious goal, Rwanda seeks to invest $470 million in production, processing, and export infrastructure. This expansion will involve increasing the production area from 533 hectares to 4,457 hectares, with each hectare costing approximately $53,292.
Of that projected investment outlay, $168 million is expected to be put in chilli production, $72 million in supporting export efforts, and $230 million in increasing the capacity to process the produce.
The Minister of Agriculture and Animal Resources, Ildephone Musafiri said that chilli grown in Rwanda has the potential to unlock.
"We have the Chinese market that we can't even satisfy as of today. So, there is a potential here," Musafiri told delegates at the AFS Forum 2024.
Uwizeyimana said that such investment is needed in Rwanda's chilli industry since the plant has a ready market that is still undersupplied, and it has promising prospects.
Dancile Mukandayisenga, a chilli farmer from Kayonza District in Eastern Province - growing the crop on two hectares at the moment - told The New Times that chilli is a profitable plant.
"The yield is at least 12 tonnes per hectare in six months for the chilli variety meant to be sold fresh [bird's eye variety]. As the minimum price per kilo is Rwf600 to the farmer, it amounts to about Rwf7 million," she said, pointing out that investment per hectare is between Rwf2.5 million and Rwf3 million.
"That means you have rwf4 million profit. There is no other crop I know [thus far] that gives such a return on investment," she said.
For the chilli best sold dry, of a variety called Teja, she said that profit can be about Rwf2 million per hectare in six months, pointing out that a kilo of the dried Teja is between Rwf1,600 and Rwf2,000 at farmer level and that it takes 3 and a half kilos of fresh chilli to get one kilo of dried one.
Chilli industry players' priorities
Mukandayisenga said that more efforts should be invested in easing farmers' access to the needed quality and certified chilli seeds.
She said that a kilo of bird's eye chilli variety seeds (of first generation) is more than Rwf4.6 million and can be planted on five hectares, while the Teja variety seeds are Rwf700,000 a kilogramme, enough for three hectares.
Though chilli seeds are relatively expensive, that is not a major issue as it is about business. For her, the concern is that such seeds are not domestically produced.
"It means that one has to import them and there are long delays involved, which makes farmers delay to plant," she said.
She suggested that investment be made in domestic seed production of chilli seeds, even though it might be a long-term plan.
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Emile Munyemana, a (farmer) capacity building manager at HoReCo - a local agri-business company - reiterated the chilli business potential, and the need for new investments in it.
He echoed the issue of access to seed, indicating that there are instances when 200 grammes of good quality bird's eye chilli variety (first generation) costs Rw1.1 million - which amounts to over Rwf5 million per kilo.
Efforts should be put in avoiding a situation where some farmers can get second or third generation of chilli seeds which are less productive than the first generation.
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"There is a need to produce quality chilli seed that is affordable," he said.
Another area that needs attention, Mukandayisenga said, is supporting farmers to grow the crop in greenhouses for them to be competitive at international markets, indicating that a small one - with about 18 metres [of length] by eight metres [of width] costs Rwf10 million in investment.
This is the case because European countries imposed a condition that chilli especially that preferably exported while fresh, must be grown in greenhouses or shade nets, she observed, pointing out that a shed net that can cover half a hectare cost around Rwf10 million.
Uwizeyimana said that there is a need to invest in capacity building for farmers in terms of good agricultural practices to ensure sustainability in safety and quality needed under international market standards.
Also, he said that buyers or processors of the produce should be supported to get adequate drying facilities for proper chilli handling after harvest, given that produce is set to increase if the investments the country needs are secured.
Again, he said that transport logistics should be considered, citing reefer (refrigerated) containers [for fresh chilli] used by exporters to keep the produce safe at controlled temperature.
