HARNESSING INVESTMENT IN TANZANIA’S AGRICULTURAL SECTOR FOR INCLUSIVE GROWTH: WHERE TO FROM HERE?

The paper examines the gap between Tanzania's high agricultural growth potential and the persistent poverty of its smallholder farmers. It analyzes the role of the Tanzanian Investment Centre (TIC), the impact of land tenure insecurity, and the potential of 'mega-PPPs' like the Southern Agriculture Growth Corridor of Tanzania (SAGCOT) to drive inclusive development. The author argues that while policies exist to stimulate investment, structural bottlenecks in taxation, infrastructure, and land rights hinder smallholders from moving beyond subsistence farming into commercial value chains.

• Tanzania's agricultural growth has historically been concentrated in commercial crops like rice, wheat, cotton, sugar, and tobacco, which has limited its impact on poverty reduction for smallholder farmers.
• Foreign direct investment (FDI) in the agricultural sector has been inconsistent, influenced by perceptions of an anti-investment sentiment and a lack of a comprehensive national investment strategy.
• Land tenure insecurity is a major barrier to investment and farmer stability, as only 3% of land in Tanzania is registered and foreigners are prohibited from owning land.
• The horticultural sector shows high growth potential (9% to 12% over five years) but is dominated by a small number of large exporters, leaving smallholders with limited access to export markets compared to Kenya.
• Smallholder farmers face significant financial hurdles, including high local bank interest rates (14% to 24%) and a tax regime that imposes VAT and tariffs on essential imported agro-inputs.
• The Southern Agriculture Growth Corridor of Tanzania (SAGCOT) is categorized as a 'mega-PPP' with the potential to create 420,000 jobs and generate $1.2 billion in farming revenues by linking smallholders to commercial agriculture.
• The US-funded Feed the Future Programme (FTFP) has invested $327 million (2010–2015) in Tanzania, focusing on productivity and market expansion through initiatives like NAFAKA, SHIFT, and TAPP.
• Tanzanian supermarkets have struggled to source locally due to smallholders' inability to meet strict quality and volume requirements, and a historical tendency of some retailers to import produce from South Africa.
• The Tanzanian Investment Centre (TIC) uses mandatory Corporate Social Responsibility (CSR) conditions to ensure investors contribute to local infrastructure and smallholder joint ventures.

APA

Parshotam, A. (2017). HARNESSING INVESTMENT IN TANZANIA’S AGRICULTURAL SECTOR FOR INCLUSIVE GROWTH: WHERE TO FROM HERE? South African Institute of International Affairs. https://saiia.org.za/wp-content/uploads/2017/06/Occasional-Paper-260.pdf

Chicago

Parshotam, Asmita. HARNESSING INVESTMENT IN TANZANIA’S AGRICULTURAL SECTOR FOR INCLUSIVE GROWTH: WHERE TO FROM HERE? South African Institute of International Affairs, 2017. https://saiia.org.za/wp-content/uploads/2017/06/Occasional-Paper-260.pdf.

Wikipedia

{{cite report |last1=Parshotam |first1=Asmita |title=HARNESSING INVESTMENT IN TANZANIA’S AGRICULTURAL SECTOR FOR INCLUSIVE GROWTH: WHERE TO FROM HERE? |publisher=South African Institute of International Affairs |date=June 2017 |url=https://saiia.org.za/wp-content/uploads/2017/06/Occasional-Paper-260.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{parshotam2017harnessing, author = {Parshotam, Asmita}, title = {{HARNESSING INVESTMENT IN TANZANIA’S AGRICULTURAL SECTOR FOR INCLUSIVE GROWTH: WHERE TO FROM HERE?}}, institution = {South African Institute of International Affairs}, year = {2017}, month = jun, url = {https://saiia.org.za/wp-content/uploads/2017/06/Occasional-Paper-260.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }