Investment Opportunity in Ghana Chili Pepper Production

Reasons to Invest in Chili Pepper Prodcution in Ghana

• Abundant Land with Ample Water Resources and Favorable Conditions for Chili Pepper Production
• Good Infrastructure and Convenient Access by Air to European Markets from the Kotoka International Airport
• Experienced, Well-organized Chili Pepper Farmers as Outgrowers
• MiDA Support in Agribusiness and Infrastructure Programs
• Low Labor Costs for Farm Operations
• Trade and Investment Incentives for Export Businesses
• Politically Stable Democratic Government
• Developed Transportation Network as Trade Hub for West Africa
• Warm and Friendly People

Business Opportunity Summary

The business opportunity for chili peppers in Ghana is to establish a nucleus farm operation with outgrower model to export a unique variety, Legon 18, and Bird’s Eye chili peppers to the European markets, particularly Germany and the United Kingdom. This opportunity allows investors to take advantage of Ghana’s strengths in chili pepper production.

Chili peppers have been widely produced in Ghana for local consumption but have been increasingly exported to the European market in accordance with the development of Legon 18 in recent years. Currently, Ghana is the fifth largest exporter of chili peppers to the European Union, where the demand for chili peppers has been growing annually by 17 percent on average since 2000.
Ghanaian chili peppers have a good reputation in the European markets compared with chili peppers from other countries. Legon 18, in particular, has a great taste and a longer shelf life. Additionally, Bird’s Eye chili represents a new and growing opportunity for higher value chili exports.

Ghana’s competitive advantages over other African chili peppers producers are its proximity to the EU for fresh produce and cheaper airfreight costs. There is also significant available land with plentiful water resources near the Volta River, Lake Volta, and Ghana’s many other river systems within a few hours drive from the Kotoka International Airport (KIA).

An investor in Ghana’s growing agribusiness sector will be supported by the Millennium Development Authority (MiDA). MiDA is an agency of the government of Ghana that is focused on increasing the production and productivity of high-value cash crops in specific intervention zones. MiDA’s programs and activities provide additional services from which investors will benefit:

• Up to 60,000 farmers trained in business planning and value chain approaches
• Infrastructure projects improving key transport corridors
• Renovation project to provide cold storage capacity at KIA Land tenure facilitation to ensure tenure security for land users and facilitate access to land
• Credit services to increase farmers’ access to credit for the improvement of value chain activites

The farmers trained under MiDA’s programs are well-organized farmer-based organizations (FBOs) that can provide excellent outgrower relationships for a chili pepper nucleus farmer.

A 250 acre nucleus farm operation with 100 acres of outgrowers for the export of chili peppers in Ghana is forecasted to yield a first-year revenue of GH¢9.8 million ($7.0 million) and net profit of GH¢4.5 million ($3.25 million) as operations scale up, with estimated revenue increasing to GH¢19.7 million ($14.0 million) and profit of GH¢9.6 million ($6.8 million) by the third year of operations.

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