Accelerating growth for businesses
and smallholder farmers

Unrealised employment potential in the horticulture sector

Despite rapid economic growth, the agricultural sector remains the backbone of Rwanda’s economy. According to the National Institute of Statistics of Rwanda, 69 per cent of Rwandan households are engaged in agriculture. Yet, the sector is dominated by smallholder subsistence farming, with almost 91 per cent of agricultural households cultivating less than one hectare of land.

Shifting from traditional farming to commercial agriculture holds great potential to improve the livelihoods of many Rwandans and create good employment opportunities, both on and off farms. The integration into global value chains promises higher incomes for exporters and smallholder farmers alike. However, as of 2021, only 41 per cent of Rwandan agricultural workers were employed in market-oriented farming, most of whom work on daily contracts and low salaries.

With high value per hectare and rising import demand globally, the horticulture sector offers great business potential. But only few Rwandan small and medium-sized enterprises (SMEs) commercially grow vegetables or fruits and they lack marketing capabilities to establish relationships with premium buyers. In addition, the managerial and technical capacities needed to improve the quantity and quality of their yields, and a consistent access to quality inputs and logistics are lacking. SMEs and cooperatives are thus prevented from exporting at international quality standards.

As a result, most farms remain confined to producing for less profitable, local markets. Thus, Rwanda’s horticulture sector has untapped potential to contribute to export growth and improved livelihoods.

Building capacities and tapping into new markets

To foster the commercialisation of Rwanda’s horticulture sector and, in turn, improve employment opportunities and working conditions, Invest for Jobs supports IDH – the Sustainable Trade Initiative. The internationally active initiative catalyses private investments to create better jobs and incomes in global markets. In Rwanda, IDH works on strengthening the capacities of horticulture enterprises to increase their exports and enhance their businesses.

With the support of Invest for Jobs, IDH implements activities in three main areas: capacity building of SMEs, capacity building of cooperatives and their member farmers, and market facilitation. All interventions are tailored to the specific needs of each company and cooperative, based on careful analyses and jointly developed business plans.

On the one hand, SMEs receive workshops, field trainings, and daily hands-on support to improve their technical and management capabilities and enhance their professionalism. Contents include improved crop production, irrigation, rotation management, mechanisation, post-harvest handling, certification, marketing, as well as export management.

On the other hand, IDH strengthens the organisational, management, and financial capacities of cooperatives. Their member farmers are enabled to apply good agricultural practices in line with occupational safety and health standards. In all trainings, female leadership and the engagement of youths are essential components. Moreover, IDH promotes the enforcement of legal social security schemes, such as health insurance, as well as voluntary initiatives, such as the establishment of farmer savings groups within cooperatives.

Furthermore, IDH facilitates new market linkages. To identify international business opportunities and secure higher margins, IDH capacitates SMEs to leverage relevant market information, such as industry trends and standards or buyer preferences. IDH further supports SMEs in building strong and inclusive sourcing partnerships with international buyers and equips them with the necessary expertise to increase the visibility of their products.

New good employment and improved working conditions

The partnership between Invest for Jobs and IDH began in May 2021. After a public call and careful selection, IDH teamed up with four promising SMEs in the horticulture sector. Each SME suggested cooperatives to work with, of which seven were selected. Concrete intervention plans, trainings, and marketing strategies for each company and cooperative were developed, based on initial gap assessments.

As of the end of 2023, 17 international companies signed sales contracts with the Rwandan SMEs and 2,378 people participated in vocational qualification measures, improving their skills. The value of horticulture produces the cooperatives sold to the SMEs increased five-fold and, in turn, the total SME export volume increased from an average of 25 to 44 metric tonnes per week. Participating SMEs mostly exported beans, chilli, passion fruit, and avocado.

As a result of these business developments, 501 people came into new good employment, 300 of which are women and 217 youths under the age of 24. Notably, 7,169 smallholder farmers are now integrated in international value chains. 2,863 people, including 1,991 women and 461 youths, are benefitting from improved working conditions and higher incomes, allowing for better livelihoods in Rwanda.

Following the success of the first phase, a second project phase started in December 2023. Six further SMEs were selected, along with six cooperatives. The project now targets at another 550 new good jobs, 2,000 people having completed trainings as well as improved working conditions for 2,000 people.

The horticulture sector in Rwanda is supported by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ) within the framework of the Special Initiative "Decent Work for a Just Transition".