SUSTAINABLE AGRICULTURE
With both public- and private-sector momentum in sustainable agriculture, the sector is poised for strategic development.
Where are the opportunities in Tanzania's sustainable agriculture sector?
NICHOLAS JONES We have been part of trying to finance and develop the middle space between informal farming and large-scale commercial farming in Tanzania. This is a difficult area of the market; however, it can be seen that there is a clear catalyzing effect whereby one successful investment in a sector will encourage more entrants, provide markets for local producers, and have a positive ripple effect across the whole value chain. Since we have been investing here, we have also seen increasing interest from foreign investors to move into the agricultural space, and this can be seen in the growth of businesses in the Southern Corridor. However, the challenge of identifying adequate projects to meet financial and developmental returns remains, and this is likely the largest barrier to new investors looking at Tanzania's agro-opportunities.
ARANYAK SANYAL Olam Tanzania fully supports the Southern Agricultural Growth Corridor of Tanzania (SAGCOT) policy framework. Once the government achieves its objectives to grow the corridor, this could revolutionize agricultural production in the country. We are supportive of this approach, and feel that if it is refined, bolstered, and enforced, it could have more of an impact than trying to prescribe yet another policy. Also, in terms of public sector investment in agriculture, there should be more focus on the supply side because Tanzania's agricultural sector is more supply than demand driven. Therefore, the challenges and opportunities lie on the supply side. For example, the setting up of storage facilities that would reduce the cost of produce collection, the creation of aggregation points, and improvements in transport infrastructure from up-country to processing locations would be useful for making good use of the current budget earmarked for the sector.
The government's Five Year Development Plan (FYDP) places emphasis on boosting the agriculture sector, aiming for a 7.6% real growth rate by 2020. Are enough practical measures being taken to achieve this goal?
NJ Both the public and private sectors have spoken about their support for the FYDP, and it is always at the top of the government's list to push this agenda. However, the challenge is twofold: firstly, finding the implementers, and secondly, the financiers. There is also the question of enabling infrastructure. When we look at exporting crops and other agricultural products, it is not just production that needs to be considered, but also transport links. It is promising to see a huge amount of investment going into the Port of Dar es Salaam, as well as Bagamoyo, Mtwara, and Tanga Ports. Tanzania is not just a conduit for Tanzanian crops, but also other East African and Sub-Saharan countries, such as the DRC, Rwanda, Uganda, Zambia, and Malawi. As a transit space, Tanzania has to grapple with extra traffic, making speed and efficiency more of a challenge. But we are seeing the matching drive to boost efficiency in the transport network too, which is needed to help boost agricultural productivity further.
What is the outlook for Tanzania's agriculture sector?
AS We prefer not to look at Africa as purely a sourcing base, which most commodity companies are prone to do, but rather as a destination or sales base as well. Of our total sales of around SGD20.5 billion (USD15.1 billion), some 15.9% of all sales in Africa, which is SGD3.25 billion (USD2.4 billion) worth of products being sold into Africa, primarily food staples and consumables. To compare that with Olam's sourcing figures, some 18.6% of our total sourcing comes from Africa. So, we source about 19% of all our products and sell about 16% of all our products in Africa, meaning we have a healthy balance of trade inherent in our business model. This means our view on the outlook for the agricultural sector is also balanced between the import and export segments, rather than it being a typically export-oriented commodity market view. What Africa has going for it and what will help us unlock its value is resolving the fundamental issue of supply and demand imbalance. With increased urbanization, there is a definite increase in per capita food consumption, and this is driving a dietary shift toward protein and fats. This, in turn, is driving a multiplier effect on food and feed products. Therefore, my outlook for Tanzania is that growth lies in food and feed. These are the two segments that will thrive due to increased demand.
SUSTAINABLE AGRICULTURE
TABLE OF CONTENTS
Guest Speaker
Hon. Patricia Scotland, Secretary General, Commonwealth of Nations
TBY talks to Hon. Patricia Scotland, Secretary General of the Commonwealth of Nations, on the advantages of being a member of the Commonwealth, the need to celebrate diversity, and Tanzania's war against corruption.
read articleGuest Speaker
Libérat Mfumukeko, Secretary-General, East African Community (EAC)
TBY talks to Libérat Mfumukeko, Secretary-General of the East African Community (EAC), on Tanzania's importance to the EAC, the major achievements of regional integration, and obstacles ahead of a monetary union.
read articleInterview
Raymond P. Mbilinyi, Executive Secretary , Tanzania National Business Council (TNBC)
TBY talks to Raymond P. Mbilinyi, Executive Secretary of Tanzania National Business Council (TNBC), on its work to support the private sector in the country, tackling challenges in the economy, and clamping down on corruption.
read articleReview: Banking
The Quest for Depth
If Tanzania is to meet its 2025 vision of attaining middle-income status, it will need to corral its bank-centric financial and capital markets for greater depth by extending participation and rendering credit more accessible to SMEs, women, and the young to spur economic growth.
read articleInterview
Dr. Baghayo A. Saqware, Commissioner , Insurance, Tanzania Insurance Regulatory Authority (TIRA)
TBY talks to Dr. Baghayo A. Saqware, Commissioner of Insurance, Tanzania Insurance Regulatory Authority (TIRA), on achieving universal healthcare coverage, the brilliance of microinsurance, and how to partner with public and private entities to increase the industry's penetration.
read articleReview
Legal Thunder
With the stepping down of Minister of Energy and Minerals Sospeter Muhongo in May 2017 over transparency issues and the introduction of three new laws that give the government the right to renegotiate or revoke existing mining and oil and gas rights, private players in the country are unsure of what future lies ahead. On the other hand, project-specific developments bode well for a sector in need of a breakthrough.
read articleInterview
Kapuulya Musomba, Managing Director, Tanzania Petroleum Development Company (TPDC)
TBY talks to Kapuulya Musomba, Acting Managing Director of Tanzania Petroleum Development Company (TPDC), on the planned expansion of the Mtwara-Dar es Salaam natural gas pipeline, entering northern industrial hubs, and empowering nascent industries.
read articleInterview
Marc Den Hartog, Managing Director, Shell/BG Tanzania
TBY talks to Marc Den Hartog, Managing Director of Shell/BG Tanzania, on the critical need for economies of scale, the importance of developing LNG for export, and why renewables must be taken into account in any long-term plan.
read articleInterview
Hon. Charles Mwijage, Minister, Industry, Trade and Investment
TBY talks to Hon. Charles Mwijage, Minister of Industry, Trade and Investment, on how to reach middle-income status, employing the private sector toward this end, and what sets the country apart from the rest of East Africa.
read articleFocus: Helium
Discoveries of Magna-tude
Despite being the second most common element in the universe, helium is in short supply on earth. With global reserves of the gas steadily dwindling, and demand steadily increasing, the discovery of a whopping 1.53 billion cbm of helium in underground chambers in Tanzania could not have come at a better moment.
read articleInterview
Gilliard W. Ngewe, Director General, Surface and Marine Transport Regulatory Agency (SUMATRA)
TBY talks to Gilliard W. Ngewe, Director General of Surface and Marine Transport Regulatory Agency (SUMATRA), on transportation budget allocation and cross-sector dialog and partnerships.
read articleInterview
Jared H. Zerbe, CEO, Tanzania International Container Terminal Services Limited (TICTS)
TBY talks to Jared H. Zerbe, CEO of Tanzania International Container Terminal Services Limited (TICTS), on regional trade flows and Tanzania's potential to take a leading role in orchestrating cargo movement.
read articleFocus: Tanzania Strategic Cities Project (TSCP)
East Africa’s “Geneva”
If Rome wasn't built in a day, it is not surprising that Tanzania's project to revamp eight of its largest cities is entering its eighth year of implementation. A release of further funds from the World Bank has given the project a new lease of life.
read articleReview
Lost in the Maize
Agriculture accounts for 30% of Tanzania's GDP, and the sector has experienced above-average output in recent years compared to the rest of the African continent. However, the sector's development is held back by poor rural farming practices and general infrastructure bottlenecks.
read articleInterview
Fred Kafeero, Tanzania Representative, Food and Agriculture Organization (FAO)
TBY talks to Fred Kafeero, Tanzania Representative of the Food and Agriculture Organization (FAO), on the organization's long-term support for Tanzania's development, recent initiatives in agriculture, and financing.
read articleFocus: 2020 Irrigation Target
Reap What You Sow
In 2006, the Tanzanian Ministry of Water and Irrigation set a target for Tanzania's agriculture sector: to irrigate 1 million ha of land by 2020. More than 10 years on and moving ever closer to the deadline, this target has not yet been met, though the first seeds are being sown.
read articleFocus: Southern Circuit Tourism
Hidden Gems
Tourism is frequently described as the jewel in Tanzania's economic crown. In 2016 alone, the industry contributed over USD2 billion in revenues. However, for at least three years, the government has expressed concern that tourism is not well distributed across the country.
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