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The Agri-Business Sector in Tanzania
Tanzania’s economy is heavily dependent on agriculture, which according to the World Bank, accounted for 31.1% of GDP in 2016. Figures published in the African Economic Outlook report show that the agricultural sector employs 66% of the labour force, while agricultural products comprise 30% of exports. Most farmers in Tanzania are engaged in small-scale farming on farms ranging between 0.9ha and 3ha in size and farming on a commercial scale is carried out on only 1.5 million ha. The major food crops are maize, cassava, rice, potatoes, sweet potatoes and bananas, while the main cash crops are coffee, cotton, sugar cane, tea, cashew nuts, tobacco, sesame seeds and sisal.
Challenges in the Sector
Despite the country’s high growth rate of 6.9% during 2016, the reduction of poverty has been slow because the growth rate of the agricultural sector has been lower than that of the country. The most important obstacles facing the agricultural sector are its dependence on rainfall, the limited use of improved seeds and the high cost of fertiliser and herbicides. Taxes are substantial and complex, involving land rent, local government levies, licences and VAT on fuel. Growth of the agricultural sector is also constrained by a lack of infrastructure, including poor road transport especially in rural areas.
The detailed Agri-Business in Tanzania report examines current conditions and factors that influence the success of the sector including the support given by the Government and foreign donor agencies. Profiles are provided for 18 role players including Obtala Ltd which owns a 100ha cassava plantation and a food processing facility. In April 2017 the company announced its intention of investing US$10m in Tanzania over the next five years under the Grow Africa initiative, a partnership established by the African Union, the New Partnership for Africa’s Development and the World Economic Forum.