Treasury buys Kilombero Plantantion’s Mngeta farm

07Oct 2021
The Guardian Reporter
DAR ES SALAAM
The Guardian
Treasury buys Kilombero Plantantion’s Mngeta farm

IN a rare feat, Treasury has decided to buy back Mngeta farm in Morogoro region which was owned by the defunct Kilombero Plantation Limited after it had defaulted on a loan provided by NMB Bank Plc.

Treasury registrar, Mgoya Benedicto (2nd L) signing a purchasing contract of Kilombero Plantation Limited’s Mngeta farm with liquidator of the asset, Silvanus Mlola (2nd R) at a ceremony held in Dar es Salaam earlier this week.

Treasury Registrar, Mgoya Benedict said after signing the sale agreement with liquidator of the farm, Silvanus Mlola early this week that the government decided to buy back the failed farm because it is strategically important for food production.

“The government is investigating in strategic projects including large scale commercial farming hence this farm is of paramount importance to Treasury,” Benedict said while stressing that the over 5,818 hectares farm which was privatised over two decades ago, remains a potential large scale commodity production giants.

The KPL, a subsidiary of Agrica Limited, a British company registered in the tax haven of Guernsey was put on sale in 2019 after defaulting NMB’s U$5.6 million (over 12.9bn/-) loan after a failed business model which was earlier touted as the best large scale commercial farming partnership with smallholder farmers.

The Treasury Registrar did not specify how much was the buying price for the rice farm which integrates a processing plant and a micro composite manure factory. “The farm is located in an area which is very productive and important to the country’s agriculture sector,” he noted.

Benedict said Mngeta farm was initially privatised with key investment and development benchmarks defined by the government which the investor failed to fulfil which led to its collapse and liquidation. “This farm is very important in the production of food crops for the country,” the Treasury Registrar noted.

In remarks after signing the deal, Mlola as liquidator thanked Treasury for completing the transaction saying the move has saved the country from losing the highly productive as it lies in the fertile Kilombero valley.

Apart from the NMB loan, KPL also got a U$20 million loan from the US Overseas Private Investment Corporation. Showcased as a success for G8’s New Alliance for Food Security and Nutrition and the Southern Agricultural Growth Corridor of Tanzania, KPL’s failures started in 2018.