By Shem Oirere
Showcasing Rwanda’s coffee at the World of Coffee exhibition in Amsterdam, Netherlands, was the culmination of government and private sector efforts to promote exports from this landlocked but fast-growing East African economy.
Part of the story Rwanda told participants at the Specialty Coffee Association event is how favorable the investment climate is for those keen on investing in coffee industry value chains. Coffee production has climbed to 420,000 60-kilo bags a year from 42,000 hectares under the crop.
Rwanda, with an impressive 6% average economic growth, is ranked the fourth least corrupt country by Transparency International. Corruption is a significant problem for international coffee investors eyeing the East African coffee market.
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According to the United States Agency for International Development (USAID), Rwanda is also the easiest location to start a business. It takes only six hours to register a company in Rwanda through the Rwanda Development Board.
USAID has assisted Rwanda’s 400,000 farmers “increase coffee yields through a combination of research, capacity building, outreach, and policy engagement.”
“The end goal is to boost the sustainability of coffee production in the region and preserve Rwanda’s legacy of world-class coffee among roasters, retailers, and consumers around the globe,” USAID writes in a previous report.
A key program finances construction of coffee washing stations (CWS). The National Agriculture Export Development Board says there are now 301 coffee washing stations, up from two in 2000.
“Coffee washing substantially reduces the risk of defects in coffee” according to the International Growth Centre (IGC). When Rwanda exports fully washed coffee (FWC), the export revenue is spread out along the value chain with benefits accrued to the farmer, laborers, the CWS owner, and the financier.
“This has boosted volumes of fully-washed coffee to different specialty coffee markets. As a result, coffee revenues shot from $22.4 million in 2000 to $64 million in 2017,” NAEB said. Rwanda exports a significant share of its coffee to the US, Europe, the Middle East, and Pakistan.
Export volumes are still low. “Only 30-40% of the exported coffee is washed,” the ICG survey memo reads in part. Researchers recommend Rwanda double its washed coffee output. Holding constant at today’s volumes, Rwanda could expect a 10-20% increase in coffee export revenues (3-6% increase in total export revenues).