The World Bank (WB) has recently approved a USD 70 million fund to finance the Southern Agricultural Growth Corridor of Tanzania (SAGCOT) to improve the current low farm productivity and promote smallholders’ access to markets by promoting partnerships between them and lucrative agribusinesses in the country’s southern corridor.
The fund has been provided by the International Development Association (IDA), an arm of the WB focused on the poorest developing countries, and is meant to create opportunities for 100,000 smallholders with the provision of new technologies and marketing practices to support their businesses’ expansion in Tanzania’s southern corridor.
Smallholders play a key role in the development of Tanzania’s economy and the fund provided to boost the SAGCOT project aims at supporting transformation in the agriculture sector by ending the constrained access to capital and access to new technologies necessary to invest in higher value production, explained WB’s Country Director for Tanzania, Burundi, Malawi, and Somalia, Mrs. Bella Bird.
According to the WB, in Tanzania over 80% of the poor and extreme poor live in rural areas with a limited access to opportunities to establish links to value addition supply chains that can process their harvest and sell higher value crops in the international markets.
This is why the SAGCOT project will incentivise links between agribusiness firms and smallholders by awarding grants to such partnerships that can be used for working capital or covering operational costs to expand the smallholder participation into the supply chain.
To reach this goal, the Tanzanian government has created two public-private-partnerships (PPPs) to lead the project’s new phase with SAGCOT Centre advertising the SAGCOT Program objectives and SAGCOT Catalytic Trust Fund providing support at early stages of investment.
The SAGCOT project was launched in 2008 with the support of YARA International, a Norway-based chemical company, and the Norwegian government through NORFUND to develop underutilized areas in the country to enhance food production and securing inclusive growth in the Tanzania’s agricultural sector.
The Tanzania’s southern corridor is compounded by the southern highlands going from Dar es Salaam in the country’s coastal region to Sumbawanga in the border region with Democratic Republic of Congo (DRC) and Zambia, which together with Ihemi, Kilombero, Mbarali, Ludewa, and Rufiji constitute the six key cluster developments for fast-track opportunities.