Benefits, Justifications and Risks

Component Beneficiaries and Component Benefits

The component will accelerate the economic growth and increase the productivity of the Nshili Tea Smallholders’ Association block through investments for new planting, infilling and the rehabilitation. It will also initiate new planting in the former neglected under-utilized home gardens of the target beneficiaries. The component will produce good planting materials. The NTC and the experienced management of the factory will improve the tea manufacturing facilities. The Nshili sub-component is expected to benefit around 4,800 beneficiaries or 1,200 ha of tea. The rehabilitation and the infilling programme is expected to increase the associations’ average yield by 1,800 kg per ha. The increase in yield will improve the comparative advantage of the tea sub-sector. At peak production, the sub-component will have an estimated incremental production of 5,118 metric tons of tea per annum valued at USD 8.2 million. The new planting in Nshili smallholders’ home gardens will benefit 4,800 households and expected yield at peak production from home gardens is expected to be 3,444 metric tons of tea per annum valued at USD 5.5 million. The sub-component will generate employment to the target beneficiaries in the NTC, plant nurseries and wood lot improvement. Estimated 1,907 person-years of employment will be created during the development phase. Tea being a labor-intensive crop, an estimated 1,366 person-year of employment is expected to be generated at full development of the component.

Similar to Nshili, the development of smallholders’ home gardens in Mushubi would produce 1,980 metric tons of made tea which would generate USD 3.2 million as revenue. The 500 ha of woodlots would also bring them revenue by selling wood to the factory to be constructed shortly.

The rehabilitation of the existing tea, new planting and infilling of the industrial block and the hilly areas of the home gardens will help improve the environment by arresting soil erosion and degradation. Around 4,800 families will see an improvement in their living conditions resulting from improvements of feeder roads that will transport the green tea to the factory. With the supply of electricity to the factory from the national grid, the whole area will benefit with possible micro enterprises emerging due to the availability of electricity as well as increase in the buying capacity of the target group population in Nshili and Mushubi. The component will seek to improving representation of smallholder tea growers through efficient and sustainable organizations and will also seek to providing smallholders with a financial structure that will enable them to participle effectively in the financing of the development of the tea sector. These benefits are not quantified but are important for all Rwandan smallholder tea growers.