Surging global demand for chilli and habanero peppers, alongside a persistent supply shortfall, is opening up fresh investment opportunities for Nigeria’s agribusiness sector.
Experts say rising consumption, strong export potential, and a $6.74 million annual import gap are positioning pepper farming and storage among the most promising agribusiness ventures in 2025.
In 2023, Nigeria exported $1.36 million worth of pepper to destinations including the U.S., India, and the U.K., according to the Observatory of Economic Complexity. However, it also imported $8.1 million worth of the crop, underscoring the need to scale local output.
With broad household demand across West Africa and rising export appeal, chilli and habanero peppers are increasingly viewed as low-barrier, high-return investments.
Returns and Margins
Prosper Nwanoro, CEO of Bavaria Farms, described the business as “highly lucrative,” with returns ranging from 30% to 60% depending on the season.
“As a staple in Nigerian cuisine, it’s used by virtually every household, making it one of the most in-demand crops in the country,” Nwanoro added.
Beyond farming, chilli pepper storage is becoming a standalone profit center. Haruna Ramadan, a chilli farmer in Yobe State, said he earns as much as 150% profit by buying dry chilli during low season and selling at a premium during peak periods.
“I buy 100kg bags for N75,000 to N80,000 between January and February and sell for N180,000 to N200,000 during peak season in June and July,” he said. Entry into the trade is accessible, he added, requiring as little as N1 million to get started with basic ventilation storage.
Habanero cultivation also offers high margins. “One habanero plant can yield 2.5kg to 3kg per cycle,” said Adebisi Odeyemi. “A 1,000-plant farm can produce 3 tons, which at N5,000 per kg translates to N15 million per cycle.”
Yields can be scaled significantly, said Okoro Uchenna, another farmer. “A hectare of habanero or chilli pepper can yield 9 to 10 tons if managed with good seeds and practices,” he said.
As of early 2025, prices range between N5,000 and N7,000 per kg, depending on the variety and quality, according to Nwanoro.
Operational Challenges
Despite the attractive returns, several hurdles persist. “High input costs—like fertilizers, chicken manure, and irrigation systems—are major issues,” said Nwanoro.
He added that skipping soil testing exposes farms to soil-borne diseases that can cut yields. Uchenna noted that dry-season farming adds costs due to irrigation, and that seed quality is often inconsistent.
The global pepper market was valued at $5.5 billion in 2024 and is projected to grow at a compound annual rate of 2.3% through 2034, according to FAO data. Nigeria leads African production with 770,000 metric tons annually, followed by Egypt and Algeria. But the country continues to fall short of meeting both domestic and export demand.
Globally, Vietnam dominates pepper production, accounting for 40% of output at 1.3 million metric tons. Brazil and Indonesia follow with 15% and 12% shares, respectively.
To close Nigeria’s pepper supply gap, farmers are turning to improved agronomic practices. “With disease-resistant seeds, organic pesticides, efficient irrigation, and advanced drying technologies, yields and income can increase significantly,” Nwachukwu said.
Strategic investments and supportive policies could help Nigeria emerge as Africa’s leading producer, he added.
Investors don’t need to operate across the entire value chain, according to Nwanoro. “Just pick a niche—farming, off-taking, processing, wholesale, or retail—and scale from there,” he said.
“There are many value chains in pepper agribusiness still underdeveloped. For instance, few players are extracting capsicum oil used in food, cosmetics, and pharmaceuticals. Most of the oil used locally is still imported,” he added.
He said export opportunities will also rise if producers pivot toward organic certification to meet international standards.
