Symposium Discusses Scaling Up Financing to Tanzania Agriculture Sector

Mwananchi Communication (MCL) organized a symposium on the agriculture sector of Tanzania in Dar es Salaam on 3rd December 2021 under the theme: “Growth, Challenges, and Future.”

Opening the symposium was MCL’s Managing Director Bakari Machumu, who explained that the discussion will help unlock the potentials of agriculture.

He said that “Agriculture is an area which has the critical potentials to reduce poverty in Tanzania if reforms will be embraced. It can also increase the speed of economic growth of Tanzania considering its significant contribution.”

Among the panelists was Mzee Kikle, Director of Planning at the Tanzania Agriculture Development Bank (TADB) who has asked other financial institutions to join forces in financing agricultural activities.

“We have been securing resources from different financial institutions, but that is not enough. More investment is required in the sector which is transforming rapidly,” Kilele stressed.

He urged investors to make financing to agriculture in different forms, including equity, guarantees, and insurance services.

He also reminded that agriculture ranks fourth in terms of receiving loans from commercial banks after personal activities, trade, and manufacturing and that the Bank of Tanzania (BOT) recently announced to provide TZS 1 trillion to banks that will extend loans to agriculture activities at an interest rate of less than 10%.

For his part, Prof. David Nyange of the Michigan State University with research interests in agriculture policy and rural development in Africa said that Tanzania’s financing of agriculture was dominated by debt, but the future is likely to attract equity financing and lease financing which will completely modernize agriculture.

He forecasts that the contribution of agriculture to the economy will continue dropping in the future, not because the sector is failing, but because of value addition.

“More people will be engaging in activities such as food processing and other kinds of value addition, instead of just basic farming. Farmers are modernizing their practice through land consolidation, processing of produces, and other mechanizations to meet the changing consumer behaviors. So, I see the agriculture sector growing fast, driven by the growth of productivity and not the expansion of lands,” he concluded.

Among the panelists was also Alex Duffar, CEO of Agricom, a one-stop solutions provider in the agribusiness supply chain in Tanzania, who explained that the company has put more effort into investing in agriculture, particularly on smallholder farmers.

“The issue now is how to take agribusiness to the next level, and this involves more than just providing tractors, but supporting mechanization like irrigation, planting, harvesting, storing and drying, and processing,” he explained.

He also reminded that providing more education through the use of YouTube is essential because it teaches farmers what they need to know about the farming activities and helps them to have better knowledge about fertilizers and soil.

And the CEO of the Southern Agricultural Growth Corridor of Tanzania (SAGCOT), Geoffrey Kirenga, said the initiative allows the generation of food that has the potential to feed the world.

“Agriculture comes with lots of opportunities. As we know, Africa is able to feed the world and Tanzania is among the places with such potentials. So, we need to provide more education so that people will be aware and invest more in Agriculture,” he concluded.

Tanzania Agriculture

Agriculture is the mainstay of Tanzania’s economy, contributing about 27% to the country’s GDP), and employing close to 65% of the Tanzanian households.