Exports of coffee, tea, horticulture and spices commodities, and livestock products such as dairy and hides could soon boost following a new $14.8 million (approx...Rwf15 billion) investment to support public and private sector actors to attract, direct and leverage financing and investment towards increased agricultural exports.
Funded by USAID, the five-year project dubbed "prosper while expanding markets” is expected to boost economic growth of Rwanda by promoting agricultural export growth and building resilience up to 2026.
The activity will work with and through the Government of Rwanda, the private sector, and civil society to facilitate an inclusive and resilient policy and regulatory environment, mobilize public and private investment toward increased high-value agricultural products.
It plans facilitation of $300 million in new investments into Rwanda’s high-value agricultural export sector.
According to the Minister of State in the Ministry of Agriculture and Animal Resources (MINAGRI), Jean-Chrysostome Ngabitsinze, "partnerships with the private sector and civil society organizations to reach a huge number of exporters across a number of high-value agricultural products is critical.”
The project will be implemented in 13 districts including Bugesera, Kayonza, Ngoma, Gatsibo, Burera, Gakenke, Nyamagabe, Nyamasheke, Karongi, Rutsiro, Ngororero, Rubavu, and Nyabihu.
"Joining efforts and collaboration with stakeholders is encouraged,” he said urging the project implementers to ensure it helps all its target beneficiaries.
"Let’s strive to create equal wealth to our beneficiaries in these projects. Let’s try to increase more on people who need more,” he added.
USAID Rwanda Mission Director, Jonathan Kamin said that the goal of the multibillion investment is to achieve at least 12 per cent annual growth in targeted agricultural commodities exported at a national level.
"This is an increase of income of 50 per cent to 75 per cent for at least 100,000 households and $300 million value of private investments mobilized through government of Rwanda agencies,” he said.
The investment, project designers say, is expected to achieve 168 percent increase in value of targeted agricultural commodities exported at a national level, 50 per cent increase in income for at least 127,000 households, including women and youth, through participation in agricultural export value chains and services.
It is expected that there will be $410.7 million increase in value of targeted agricultural commodities exported at a national level as well as 10 percent increase in annual sales of producers and firms receiving the assistance.
At least 30 new or adapted agricultural enabling environment policies will be analyzed, consulted on, drafted or revised, approved, and implemented while 500 firms will be accessing agriculture-related investment as a result of the project.
Emerging agricultural value chains
The project is also expected to boost exports of essential oils and stevia production for exports among other emerging value chains.
Essential oil is used in aromatherapy; the use of aroma to improve health condition; meditation, respiratory support, skin health, and tress relief, among other uses.
The global essential oils market was projected to reach around $11.19 billion by 2022, at a compound annual growth rate of 8.83 per cent from 2017 to 2022, according to industry experts.
Stevia is a natural sweetener and sugar substitute derived from the leaves of the plant species Stevia rebaudiana,
The compounds of stevia have about 50 to 300 times the sweetness of sugar.
Last year in November Rwanda and China signed an agreement that will see stevia grown in Rwanda exported to the Chinese market.
Officials said that through export fund, improved investment and business models could result into increased exports.
This, they say, requires blended finance vehicles, financial incentives mechanisms, and financial products to increase flow of capital SMEs need among others.
André Ndikumana, the Chief Finance Officer at NAEB data sharing on the market also gives opportunity to banks to learn about agriculture sector so they provide finance to agribusiness.
Exports growth status for the targeted commodities
Rwanda agricultural exports grow by 39 per cent in Q2 according to NAEB.
Rwanda has earned a total of $158,538,598 million in revenue from exportation of agricultural products for the 2021/2022 fiscal year’s second quarter, according to a report released in February.
According to the report, export revenues from traditional commodities such as coffee, tea and pyrethrum increased by 36 per cent to $ 63 million from $ 46 million in 2020/2021 fiscal year.
Coffee export revenues increased to $38 million in the second quarter of the fiscal year from $26 million registered during the same period last year.
Export revenues from tea sales increased by 25.5 per cent, to $ 23 million from $ 18 million generated in the 2020/2021 fiscal year’s second quarter.
According to NAEB, Rwanda exported 8,398 Kilogrammes of Hides and skins worth $189,000 from July to December 2020 which increased to 1,503,474 Kilogrammes worth $1.1 million in the same period in 2021.
Last year, Rwanda exported 32,588 Kilogrammes of Stevia while 185,055 Kilogrammes of essential oils were exported from 25,058 Kilogrammes in 2020.