Why Invest in Agriculture and Livestock Sectors in Tanzania?

Agriculture Sector, with annual growth rate of 6%, accounts for nearly half of national GDP contribution, 70% of rural household income, and absorbs 80% of the entire workforce. Lately, the government introduced a special agricultural revolution initiative, namely “Kilimo Kwanza”, with the aim of commercialising agriculture and improving cultivation methods of peasant farmers to supplement agribusiness and assure the country of self-sufficiency in food supplies. Agricultural and livestock development is the leading economic sector in Tanzania and remains critical for achieving sustained growth, poverty reduction, and rural development.

Tanzania Crops

Tanzania’s crop production rose by 44% during 2008–2013, beating the Sub-Saharan Africa average crop production growth rate of 18% during the same period, according to the World Bank’s (WB) crop production index. Tanzania’s main exported cash crops are tobacco, cashew nuts, coffee, tea, cloves, cotton, and sisal. Raw tobacco represents Tanzania’s most important exported cash crop growing from USD 169m worth of exports in 2010 to USD 318m in 2015, followed by cashews which grew from USD 50m to USD 201m, and coffee from USD 109m to USD 162m in the same period. The top export destinations of the Tanzanian tobacco are Germany, Russia, and Poland, while almost 80% of cashews are exported to India.

Tanzania Livestock Sector

Tanzania’s livestock production rose by 33% during 2008–2013, exceeding the Sub-Saharan Africa average livestock production growth rate of 11% during the same period, as per the WB’s livestock production index. Meat production in Tanzania rose by 33% over the period 2008–2013, from 422,230t to 563,086t, as indicated in the 2014–2015 Annual Report of the Tanzania’s Ministry of Agriculture, Food Securities and Development. Out of the total meat production, 55% comes from cattle, 21% from sheep and goats, 14% from pigs, and only 10% from chicken. In 2015, Tanzania’s Ministry of Livestock and Fisheries Development launched the Tanzania Livestock Modernization Initiative (TLMI), which aims to transform the traditional livestock sub-sector into a modern, responsive, sustainable and environmentally-friendly engine for rural development.

Tanzania Agriculture Value-Addition

The Tanzanian agriculture value-added net output increased by 61% during the period 2009–2014, from USD 8.6bn to USD 13.8bn, exceeding by 5% the growth of value-added agricultural output in Sub-Saharan Africa during the same period. Currently, value-added products in Tanzania include cotton yarn, manufactured coffee and tobacco, sisal products (yarn and twine), and wheat flour. In line with the 2025 Vision of the Ministry of Agriculture, Food and Cooperatives of Tanzania, there should be at least two new products developed from each of the staple crops, horticultural crops, livestock and fisheries by that year.

Several reforms have been undertaken in this sector, such as review of land laws to allow for long-term leases for foreign companies and redefining the role of government and the private sector that allow for the latter to participate in the production, processing, and marketing, while the former retain regulatory and public support functions. 

Tanzania has enormous water resources potential.Water for irrigation can be obtained in flood basins of rivers and lakes as well as from underground sources. Potential irrigatable farmland in Tanzania is approximately 29 million hectares, out of which only 280,000 hectares are under irrigation farming. This provides for high agricultural investment opportunities. In addition to the following specific investment opportunities available, this sector offers varying business avenues, such as importing modern-and-efficient farming equipment, for instance, tractors and fertilizers; providing training of modern farming, for example, how to use appropriate irrigation technology, etc.