by Ben Taylor

Agricultural Transformation Agenda Launched
On April 4, 2022, President Samia Suluhu Hassan launched an “agri­cultural transformation agenda”, detailing a range of measures to improve agricultural productivity. Under the heading “Agenda 10/30”, these measures aim to produce a 10% annual growth rate for the sec­tor by 2030, up from 2% at present. The slogan “Kilimo ni Biashara” (Agriculture is Business) has been prominently used.

First among the new measures is the government’s desire to see com­mercial banks lower their interest rates when lending to the sector. The President urged banks to provide a single digit interest rate on loans to the agriculture sector. She said this was of paramount importance in shaping the agriculture sector and increasing its contribution to the economy.

“CRDB Bank is already charging a single digit interest rate to nine per­cent. I am positive NMB Bank, which is currently charging 10 percent, will follow suit. I will be even more happy if you go to eight percent,” said President Hassan.

Tanzania Bankers Association (TBA) chairman Abdulmajid Nsekela, also the Managing Director of CRDB Bank, expressed commercial banks’ commitment to addressing the challenge of access to capital that farmers were grappling with. He said currently the agriculture sector was accounting for less than 10 percent of the loans portfolio mainly due to lack of collateral.

“Some 14 banks have signed contracts with Tanzania Agricultural Development Bank (TADB) for it to issue guarantees that will enable farmers to access loans,” he noted.

NMB Bank said it was fully supportive of the government’s ambitions to radically transform the national farming sector into a commercially driven modern enterprise, saying the lender was already using its financial muscle to propel the sector’s growth, having injected over TSh 1.3 trillion into the farming economy and its value chain in the past five years.

The President also instructed the Ministry of Agriculture to establish a Revolving Fund for agricultural inputs and agricultural development, using contributions both from internal sources of revenue and from development partners. “At a time when prices for agricultural inputs shoot due to external shocks, the Revolving Fund will be coming in to cushion farmers,” she said.

She directed the Ministry and the President’s Office for Public Service Management to review the Irrigation Commission structure, so that it should have offices in each district. Minister of Agriculture, Mr Hussein Bashe, has set a target of raising arable land under irrigation from 2% at present to 50%, which would see around 10 million hectares under irrigation, up from the current 600,000.

Further, the President announced plans to issue a price stability fund for fertiliser (where prices have risen sharply with rising fuel costs) and to establish a common use facility for packing, sorting and grading of horticultural products.

Scaling up extension services is another of the pillars in “Agenda 10/30”. Tanzania reportedly needs some 21,000 extension officers, though there are currently fewer than 8,000. Plans are in place to raise this figure quickly.

Finally, the government announced plans for the treasury to let off land that it holds but which remains idle, giving this instead to investors for commercial farming.

Financing these ambitions will require considerable budgetary resources. In the 2021-22 budget, the Ministry of Agriculture was allocated TSh 294 bn, of which 77% was for recurrent expenditure, leaving just Tsh 65 bn for development spending.

President Hassan has pledged to raise development spending, and Finance Minister Mwigulu Nchemba has hinted strongly that agricul­ture will be one of his top spending priorities in the coming 2022-23 budget.

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