At a glance - agriculture in Tanzania

Tanzania is a country with agriculture at the heart of both its economy and people’s daily lives. It is a producer of coffee, sisal, tea, and cotton, and its main food crops include maize, sorghum, millet, rice and beans. Raw tobacco is the country’s most important export crop.

Variable tax regulations, especially import tax and high taxes and duties across the agricultural value chain, have caused confusion and are a deterrent to outside investment in Tanzania. The unpredictability of tariffs and duties makes it especially difficult for international investors to budget and plan, which affects imports, production and sales.

Reform is essential to deliver much-needed efficiency in the agricultural sector and Tanzania has designed a number of policies to tackle this challenge; but policy change has not yet been adequately translated into practice.

The Tanzanian government has developed a food security investment plan, launched in 2011, to reduce poverty and improve household food security and nutrition over 10 years by modernising the agricultural sector, enhancing and commercialising production, and fuelling growth of at least 7% a year in the sector.

To this end, the government is introducing structural reforms aimed at fostering a more attractive and stable business environment. These reforms include developing and implementing a transparent land tenure policy.

Grow Africa’s work in Tanzania

The government promotes the growth of “clusters” of profitable agricultural farming and service businesses through the Southern Agricultural Growth Corridor (SAGCOT). Grow Africa works in close partnership with SAGCOT.

Grow Africa and SAGCOT share similar objectives, and 32 of the 35 companies that have to date provided Letters of Intent (LOIs) to Grow Africa are SAGCOT partners.

 In Tanzania, LOI companies – 17 of them domestic and 18 international – pledged investment of $846 million in 2014; this is a significant increase on the previous year, when there were 19 LOI signatory companies, and makes the LOI portfolio in Tanzania the third-largest in the Grow Africa network.

Approximately 70% of the 35 LOI companies have reported their progress against plans; investment expenditure to date is $31 million, and more than 2,200 jobs have been created through the implementation of investments. Almost 700,000 smallholders have been reached, mainly through the provision of input products and services, financial or data services and training.

Tanzania is home to a pilot project under the World Food Programme Patient Procurement Platform (PPP), which Grow Africa actively supports. The PPP aims to reach 75,000 farmers in each of four targeted countries with $30 million in procurement power and $15 million of loans within the next two years. The pilot is running in Arusha and Iringa and will reach 5,000 farmers; it will be scaled up in Tanzania and extended to Malawi, Rwanda and Zambia.

There is growing momentum in the country to improve agricultural finance, and the Tanzania Agricultural Development Bank was recently established. Some of SAGCOT’s partners have been working to provide innovative financing solutions to agribusiness, through the SAGCOT Catalytic Trust Fund. SAGCOT, Grow Africa and local finance providers have together set up the Innovative Finance Working Group, which will champion the development of financial products and services and increase collaboration between finance, agribusiness and farmer trainers.

Grow Africa will continue to work closely with SAGCOT, with a focus on drawing in more players in key value chains, and on the Cluster Development Programme. At the same time, Grow Africa’s relationship with SAGCOT is evolving, with the establishment of a memorandum of understanding on the principles of the partnership and the roles of each organisation.

Grow Africa Contacts

Leah Kasera
00254 - 727 048434 (Kenya)

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