Why Tanzania should now become a net food exporter

23Jan 2019
Financial Times
Why Tanzania should now become a net food exporter

TANZANIA recorded another bumper harvest in the 2017/18 season where 15.9 million tonnes of food was produced.

This represents a 20 per cent increase from the previous season when the nation also produced surplus food, with annual demand standing at 13.3 million tonnes. There are already indications that Tanzania will once again be self-sufficient in food harvests in the 2018/19 season.


The agriculture sector remains the mainstay of the Tanzanian economy despite the relatively slow pace of growth of farming activities compared to other sectors such as construction, communications and financial services.


Data from the National Bureau of Statistics (NBS) shows that agriculture was the second-biggest contributor to gross domestic product (GDP) or economic output in Tanzania in 2017, at 30.1 per cent.


The services sector was the biggest driver of economic growth with a 37.5 per cent contribution during the year under review. More than 11 million people participated in agricultural activities in the country during the 2014/15 season.


But despite its huge importance to the economy, agricultural activity grew by just 3.6 per cent in 2017, hence lagging behind other sectors of the economy.


The sector’s contribution to GDP is supported by rising cash crop production, an emerging agro-processing segment, and strong domestic demand for processed food, according to the Oxford Business Group.


Many economists agree that for agriculture to make a bigger impact on poverty reduction and national economic growth, it needs to grow at double-digit levels.


Farmers and other sector stakeholders still face considerable challenges in modernising the industry to increase yields, exports, and value-added processing. They also face regulatory restrictions in export of their crops, land ownership hurdles, lack of access to economically viable technology, adequate storage facilities, markets and credit.


The Bank of Tanzania's (BoT) latest monthly economic review shows that the annual growth of banks' credit to the agriculture sector stood at a crippling -19.1 per cent in November 2018. This means that agriculture is among sectors of the economy that are worst hit by a lack of access to financing.


It is worth noting that the government has already started moving in the right direction to boost the growth of this sector, including investing heavily in the construction of food grain silos across the country to cut post-harvest losses, and reducing dozens of levies on the sector.


Tanzania’s primary export crops have traditionally been cashew nut, coffee, cotton, tobacco and tea. The country also produces significant quantities of fruits and vegetables, pyrethrum and sisal.


Food exports to neighbouring countries have long been restricted by the government to avoid creating local food shortages and hence lead to a spike in the inflation rate. Food export bans and other restrictions have fed a thriving food smuggling operation in border towns, hence causing huge revenue losses to the country.


We think that it is about time the public and private sectors in Tanzania start to view food exports as a source of foreign exchange revenue by targeting food grains such as maize, rice, maize, soya and vegetables.


So we need to change our collective mindset as a nation from merely being self-sufficient in food to producing millions of tonnes of surplus food each year, specifically for export purposes.


Tanzania can and should become the bread-basket of both the East African Community (EAC) and the Southern African Development Community (SADC).


The United States currently exports more food than any other country in the world. Other top food exporters are Germany, the Netherlands, and the United Kingdom.


A World Bank report published in March 2013, titled ‘Growing Africa: Unlocking the Potential of Agribusiness’, estimates that African agribusiness could be worth $1 trillion by 2030 from around $300 billion.


There is no reason whatsoever why Tanzania should not join the ranks of top food exporters in Africa in the foreseeable future. We have vast tracts of arable agricultural land. All that is needed to achieve this goal is political will and private sector participation.