The agriculture sector has been playing an essential role as a critical driver for the economic growth of Tanzania since independence and accounts for approximately 65% of the population, both directly and indirectly. The sector contributes about 28 % of the country’s GDP and about 24% of the total exports and ensures food security (FYDP3, 2021).
However, these facts mean that two-thirds of Tanzanians are working to produce only one-third of the country’s GDP. The six main cash crops are cashew nuts, coffee, cotton, sisal, tea and tobacco. At one point in its agricultural history, Tanzania was the largest producer of sisal in the world.
Tanzania produced in 2018 includes 5.9 million tons of maize, 5 million tons of cassava (12th largest producer in the world), 3.8 million tons of sweet potato (4th largest producer in the world, second only to China, Malawi and Nigeria), 3.4 million tons of banana (10th largest producer in the world, 13th adding plantain production), 3 million tons of rice, 3 million tons of sugarcane, 1.7 million tons of potato, 1.2 million tons of beans (6th largest producer in the world), 940 thousand tons of peanut (7th largest producer in the world), 930 thousand tons of sunflower seed (12th largest producer in the world).
Also Tanzania produced 808 thousand tons of sorghum, 561 thousand tons of sesame seed (5th largest producer in the world, losing only to Sudan, Myanmar, India and Nigeria), 546 thousand tons of coconut (11th largest producer in the world), 454 thousand tons of mango (including mangosteen and guava), 389 thousand tons of pineapple, 373 thousand tons of orange, 356 thousand tons of tomato, 238 thousand tons of cotton, 171 thousand tons of cashew nuts (6th largest producer in the world) in addition to smaller productions of other agricultural products, like tobacco (107 thousand tons, 8th largest producer in the world), coffee (55 thousand tons), tea (36 thousand tons) and sisal (33 thousand tons).
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It should be noted that the poverty rate of the rural area amounts to 31.3% while that of the urban space is 16%. In this sense, agricultural development plays an integral part not only in economic growth but also in poverty reduction in this country. However, the growth rate of agriculture for the past several years (4-5%/year) has failed to achieve the national target (6-10%/year), and poverty reduction is also lagging.
Based on this background, the Government of Tanzania established the Agricultural Sector Development Program (ASDP) as a framework for agricultural development. It has been promoting rural development under the program. JICA, as one of the development partners which contributed to the formulation of ASDP, continuously supports the effective implementation and further strengthening of the framework of ASDP through financial and technical assistance.
Currently, the Government of Tanzania, in collaboration with development partners, is implementing various agricultural programs which focus on four components:
- Sustainable Water and Land Use Management.
- Enhanced Agricultural Productivity and Profitability.
- Commercialization and Value Addition.
- Sector Enablers, Coordination Monitoring and evaluation.
Also, Tanzania is one of the first group countries in the Coalition for African Rice Development (CARD), a consultative group of bilateral donors and regional and international organizations working in collaboration with rice-producing African countries.
The agriculture sector is also essential to the financial industry in another, less visible but still very critical way – it is a sector that significantly influences price stability, or the value of savings, for Tanzania. The Consumer Price Index (CPI) is a measure that examines the weighted average of prices of a basket of consumer goods and services and is a very valuable indicator to measure inflation.
In the CPI for Tanzania, Food and non-alcoholic beverages account for 38% of the basket of prices of goods and services consumed (this is with weights revised in 2015). Therefore, price increases in food-related items significantly impact the inflation rate in Tanzania and, hence, the value of savings.
However, the food and beverage index has been the fastest-growing component of the CPI, having cumulatively increased by 78% in 2015 (2010 Base) and already grown by 17% in 2017 (2015 Base). It is, therefore, in the interest of the financial sector and macroeconomic policy at large that the agriculture sector is productive and stable so that the value of savings and the viability of the financial industry is maintained. The significance of agricultural exports to Tanzania’s growth can be seen in many areas:
- Revenue Generation: Agriculture exports have been a significant source of foreign exchange earnings for Tanzania. In 2019, agricultural exports reached USD 2.1 billion, accounting for 24% of the country’s total export earnings (World Bank). This revenue has played a crucial role in financing infrastructure development, poverty reduction, and investments in other sectors.
- Employment Opportunities: The agricultural sector has been a significant employer in Tanzania, particularly in rural areas where most of the population resides.
It provides livelihoods for a significant portion of the workforce, with approximately 67% of the population engaged in agricultural activities (National Bureau of Statistics). Investment in the sector can enhance productivity, create additional employment opportunities, and reduce poverty.
- Food Security and Self-Sufficiency: Agriculture exports are closely linked to food security and self-sufficiency. By producing food crops and staple commodities, Tanzania can meet domestic nutritional needs while reducing dependence on food imports. This enhances food security and contributes to the well-being of the population.
The Need for Further Investment
Infrastructure Development: Investment in rural infrastructure, such as irrigation systems, storage facilities, and transportation networks, is crucial for enhancing productivity and reducing post-harvest losses. Improved infrastructure can also facilitate access to markets and strengthen the competitiveness of Tanzanian agricultural products.
Value Addition and Processing: Promoting value addition and agro-processing is an area with untapped potential. Encouraging the establishment of processing facilities and supporting smallholder farmers in adopting value-added practices can enhance the value chain and contribute to higher export earnings. Investment in research and development can facilitate innovation and the development of high-value agricultural products.
Smallholder Empowerment: Smallholder farmers form the backbone of Tanzanian agriculture. Further investment should prioritize empowering smallholders through access to finance, training, and market linkages. Empowering smallholders will enhance their productivity, income, and economic contribution.
Agriculture exports have driven Tanzania’s economic growth, contributing significantly to revenue generation, employment opportunities, and food security. With further investment in infrastructure, value addition, and smallholder empowerment, the agricultural sector can unlock its full potential and contribute even more to the country’s economic development.
