Rwanda’s growing agroprocessing generated over Rwf300 billion in 2017

By The Inspirer Staff

The performance of agro-processing sector in the country has been improving, and in 2017, it generated Rwf301 billion, which accounted for 25.1% of the total industry sector GDP that was valued at Rwf1,198 billion, according to figures from the Prime Minister’s Office.

The sector is attracting attention from various entrepreneurs, especially the youth who are tapping into this promising business.

Young  agripreneurs are bring up innovations including wine production from different crops such as beetroot, sweet potatoes, carrots, avocados, among others, which was not the case in the past. And, some have also engaged in production of cooking oil and soap from avocados.

Total industry sector GDP grew from Rwf500 billion in 2010 to Rwf1,092 billion in 2016, and Rwf1,198 in 2017, as indicate figures from National Institute of Statistics of Rwanda (NISR)’s GDP National Accounts, 2017 released in March 2018. In 2016, the figures show, the sector generated Rwf137 billion.

The industry sector had over 10 components including construction; non-metallic mineral products; metal products, machinery and equipment; furniture and other manufacturing, electricity; food, beverages and tobacco.

The GDP – monetary value of all finished goods – from food processing more than doubled in the last seven years as it increased from Rwf66 billion in 2010 to Rwf161 billion in 2017, further reveals the NISR’s GDP National Accounts, 2017.

Thanks to the growth in agriculture sector, there are 24 main factories processing produce from six priority crops under the crop intensification programme (CIP) namely maize, wheat, rice, Irish potatoes, beans and cassava, Prime Minister Edouard Ngirente said in April, 2018 while presenting on the government’s activities in farming sector to Rwanda’s bicameral parliament.

Part from that, he said, other small processing factories were set up across the country.

“Agriculture and livestock produce increased which enabled agro-processing factories to operate at 45% of their capacity in 2017 from 38% in 2016. The target we set under the Government’s Seven Year programme 2017-2024, is to further increase farm produce so that our factories be able to work at a satisfying level,” Prime Minister Ngirente observed.

Talking about factors that contributed to that growth, Ngirente said that there are many factories that were set up under public-private partnership in a bid to add value to agriculture and livestock produce.

The factories include Mukamira Dairy based in Nyabihu District, which processes milk; the Kigali Special Economic Zone-based Africa Improved Food that makes nutritious meals; Rwanda Farmer Coffee in Gikondo of Kicukiro District which processes coffee for export; a factor making banana beer in Gisagara District; Mikaoni Traders mill which processes wheat at Kigali Special Economic Zone; and Ndiyo Business Group Chips in Gikondo, Kicukiro District which makes chips from Irish potatoes.

About 1,890 people were employed in food processing in 2011, and increased to 2,574 in 2016-2017, while 643 people were working in beverages and tobacco in 2011, and went up to 902 in 2016-2017, indicates the Ministry of Trade and Industry.

Challenges and proposed remedies

Prosper Ndayiragije, the Country Director of Africa Improved Foods, which has a production capacity of 45,000 tons per year said that in its 1st year of operations, 2017, it produced 32,500 tons of which 82% were exported and 18% sold locally.

“The main challenge is getting enough raw materials with right quality locally,” Ndayiragije said.

The Ministry of Trade and Industry (MINICOM) says that while better than most countries in the region; the quality of power supply still causes companies to suffer losses from power cuts. Yet, he said, it is expected to improve in the coming years.

However, it says it believes that the establishment of industrial parks across the country will decrease the probability of unplanned power cuts as will large-scale public investments such as the Kigali Ring project. Power cuts caused by load-shedding are expected to decrease as power supply is planned to meet demand once the new generation projects are online.

Climate change, with extreme climatic events such as droughts and floods, may pose a significant challenge to the long-term potential and sustainability of Rwanda’s agro-processing sectors.

This issue is especially the case for crops such as coffee and tea which are more sensitive to climatic variability.

In line with combatting the effects of climate change on farming, Prime Minister Ngirente said that the Government put in place strategies including increasing irrigated farmland from over 48,000 hectares in 2017 to over 102,000 hectares by 2024.

In the last financial year, Ngirente said, 2,730 hectares will be irrigated in Gako area of Bugesera District, 2,097 hectares in Mpanga of Kirehe District, 400 hectares in Rwinkwavu in Kayonza District, and 120 hectares in Gatsibo District.

He pointed out that 2,000 hectares will be irrigated across all districts in line with promoting small scale irrigation – which is carried out on acreage not larger than 10 hectares – whereby the government subsidises irrigation equipment cost by 50%.

Activities in the industry sector increased by 4 percent. The industry sector, figures from NISR show, contributed 16 percent of the country’s GDP.

Though the Ministry of Trade and Industry (MINICOM) says there is a need to conduct an assessment to get updated number of agro processing industries, there were 919 industries including small ones of which 80% (735 industries) were agro based industries as the last assessment conducted in 2015 shows.

While speaking during the concluded 13th National Agriculture Show held at Mulindi in Gasabo District, from June 26 to July 3, 2018, the Minister of Agriculture and Animal Resources, Dr. Gerardine Mukeshimana underscored the role of agroprocessing in socio-economic development, and gave tribute to the youth for contributing to agribusiness advancement. She highlighted that the government will further technologies intended to increase farm yield.

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Elias Hakizimana

Elias Hakizimana, CEO&Founder of The Inspirer Ltd,(www.rwandainspirer.com) is a professional Rwandan Journalist with Bachelor’s Degree in Journalism and Communication, received from University of Rwanda’s College of Arts and Social Sciences (CASS) in 2014. He served various media houses in Rwanda including Rwanda Broadcasting Agency (RBA) in 2013 and became passionate with English Online and Print Media Publications where he exercised his talent as a Freelance News Reporter for The New Times, The Independent, The Rwanda Focus, Panorama and more before he became a Self-Entrepreneur as the CEO and Founder of The Inspirer Limited in early 2017.

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