On 14th January 2025, the Governments of Tanzania and Japan signed an Official Development Assistance (ODA) loan agreement in Dar es Salaam worth ¥22.742 billion (approximately TZS 354.45 billion).
The agreement, facilitated by the Japan International Cooperation Agency (JICA), will fund the Agricultural and Rural Development Two-Step-Loan Project, aimed at enhancing agricultural productivity and food security in Tanzania.
The agreement was signed by Tanzania’s Minister of Finance, Hon. Dr. Mwigulu Lameck Nchemba, and JICA Vice President, Ms. Miyazaki Katsura. The project will be executed by the Tanzania Agricultural Development Bank (TADB), with JICA providing oversight.
The project involves providing medium- and long-term loans to farmers, farming groups, and agricultural companies. It also targets women and youth engaged in horticultural crop cultivation.
In addition to financing, the initiative includes capacity-building activities to strengthen TADB’s operations and improve collaboration with other development partners.
The loan terms include an annual interest rate of 0.20%, a repayment period of 40 years, and a 10-year grace period. The project is expected to be completed by August 2029.
The Agricultural and Rural Development Two Step Loan Project aligns with Tanzania’s Five-Year Development Plan (FYDP III) and the Second Agricultural Sector Development Plan (ASDP2), which prioritize the modernization of agriculture, increased market access, and improved food security.
The initiative also contributes to the United Nations Sustainable Development Goals (SDGs), particularly Goal 2 (Zero Hunger) and Goal 8 (Decent Work and Economic Growth).
The signing ceremony was attended by Japan’s Deputy Minister of Foreign Affairs, Hon. Fujii Hisayuki; Tanzania’s Deputy Minister for Foreign Affairs and East African Cooperation, Hon. Cosato Chumi; and Japan’s outgoing Ambassador to Tanzania, Hon. Yasushi Misawa, among others.
Dr. Nchemba stated that the project will enable farmers to access affordable capital, adopt advanced farming techniques, and contribute to ensuring food security.
Ms. Katsura emphasized that the project focuses on key agricultural value chains, including rice, maize, wheat, and sunflower.
The agreement builds on over 60 years of collaboration between Tanzania and Japan. Japan has been a significant partner in Tanzania’s development, contributing to projects in agriculture, water, energy, transportation, and education.
In 2023, trade between Tanzania and Japan reached approximately USD 300 million. Japan is also a notable source of foreign direct investment in Tanzania, particularly in manufacturing and infrastructure.
The loan agreement follows the Tanzania-Japan Business and Investment Forum, held on January 14, 2025, in Dar es Salaam.
At the forum, Tanzania’s Deputy Minister of Industry and Trade, Hon. Exaud Kigahe, highlighted investment opportunities in sectors such as natural gas, agriculture, and tourism.
He also emphasized the strategic importance of Tanzania’s infrastructure, including the Port of Dar es Salaam, in facilitating trade across East and Central Africa.
