The growing global demand for ‘chilli’ and habanero peppers, combined with a supply shortage, has created an opportunity for investors willing to pump cash into the subsector.
According to experts, the opportunity has turned pepper farming and storage into one of Nigeria’s most promising agribusiness investments in 2025.
In 2023, Nigeria exported $1.36 million worth of pepper to countries like the United States, India and the United Kingdom, yet it still imported $8.1 million worth of pepper, according to the Observatory of Economic Complexity (OEC).
This $6.74 million supply gap presents a clear opportunity for stakeholders to scale local production and capture unmet demand.
With high consumption across West Africa and export potential, pepper is increasingly seen by both farmers and investors as a low-barrier, high-return opportunity.
“Pepper farming is one of the most profitable agribusiness ventures in Nigeria. It significantly contributes to both the local economy and the international spice market,” said Christian Nwachukwu, a young entrepreneur.
Prosper Nwanoro, chief executive officer of Bavaria Farms, described pepper business as ‘highly lucrative,’ noting its potential to generate between 30 percent to 60 percent return on investment depending on the season.
“With pepper investment, you cannot go wrong—as all households consume it,” said Nwanoro. “Pepper has been a consistent need, and the demand has never dropped,” he further said.
“As a staple in Nigerian cuisine, it’s used in virtually every household, making it one of the most in-demand crops in the country,” Nwanoro explained.
Beyond farming, chilli pepper storage is emerging as a standalone profit center. Haruna Ramadan, a chilli farmer in Yobe State, shared his experience with BusinessDay.
“I make about 150 percent profit from storing dry chilli,” he said. “I buy 100kg bags for N75,000–N80,000 between January and February and sell for N180,000–N200,000 during peak season in June and July,” he revealed.
Ramadan emphasised that entry into the business is accessible. “You can start with as little as N1 million. Just store in well-ventilated houses to avoid spoilage—it’s simple, scalable, and profitable,” he noted.
Habanero pepper offers impressive yields and returns under proper agronomic practices.
Adebisi Odeyemi, a farmer, provided detailed numbers. “One habanero plant can yield 2.5kg to 3kg per cycle. A 1,000-plant farm can produce three tons, which at N5,000 per kg translates to N15 million per cycle,” he explained.
Okoro Uchenna, another farmer, emphasised scalability: “A hectare of habanero or chilli pepper can yield nine to 10 tons if managed with good seeds and practices,” he stated.
Prices at the start of the 2025 peak season stood between N5,000 and N7,000 per kg, depending on the variety and quality, Nwanoro said.
Challenges facing farmers
Despite the attractive profits, operational challenges are limiting farmers to grow more of the crops.
“High input costs—like fertilizers, chicken manure, and irrigation systems—are major hurdles,” said Nwanoro.
“Also, skipping soil testing can expose you to soil-borne diseases, which severely impact yield,” he added.
Okoro, earlier quoted, said that dry-season farming can be expensive due to irrigation and seed quality is often inconsistent.
Global outlook
Globally, the pepper market was valued at $5.5 billion in 2024 and is projected to grow at a 2.3 percent compound annual growth rate (CAGR) through 2034.
Nigeria leads African chilli production with 770,000 metric tons annually, followed by Egypt and Algeria. Yet, it still falls short of meeting domestic and international demand.
According to the Food and Agriculture Organisation (FAO), global pepper production reached 4.1 million metric tons in 2021, with Vietnam (1.3 million tons) leading globally, while African producers remain underleveraged.
Vietnam leads global pepper production, accounting for 40 percent of total output, followed by Brazil at 15 percent and Indonesia at 12 percent, according to a report by FAO.
Going forward
Nwachukwu, earlier quoted, emphasised that by adopting modern practices—such as the use of disease-resistant seeds, organic pesticides, efficient irrigation systems, and advanced drying and refrigeration technologies—farmers can greatly enhance both yield and income.
He added that with supportive government policies and strategic investment, Nigeria has the potential to solidify its role as a dominant force in Africa’s pepper production landscape.
According to Nwanoro, investors don’t need to operate across the entire value chain. “You just need to pick a niche—farming, off-taking, processing, wholesale, or retail—and scale from there,” he advised.
“There are many value chains in pepper agribusiness, and most are still underdeveloped. For instance, only a few players are extracting capsicum oil for use in food, cosmetics, and pharmaceuticals. Most local producers still import the oil for their products,” Nwanoro stated.
He also pointed to export growth potential, especially if farmers pivot towards organic production to meet global standards. (BusinessDay)
