Agriculture In Tanzania - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

Agriculture In Tanzania - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

The Tanzanian agriculture market is projected to register a CAGR of 4.2% during the forecast period (2022-2027). The COVID-19 outbreak affected the production and processing of food, especially for labor-intensive meat and dairy processing plants. Agriculture is Tanzania's economic mainstay, contributing nearly one-fourth of its GDP and more than 50.0% to total employment. The value addition activities were affected negatively as disrupted supply and distribution channels decreased the end-products. As overall logistics slowed down, food safety and quality were affected negatively.

Agriculture is the major backbone of the country's economy. Hence, structural measures are taken to boost agricultural production in the country with the support of public-private partnerships. Fruits hold a prominent share due to liberalization policies supporting their exports. Bananas, mangoes, oranges, pineapples, and watermelons are the major fruits produced in the country. Thus, the private sector investments, favorable government policies, and trade agreements with neighboring countries are likely to drive the market during the forecast period.

Tanzania is one of the largest cashew producers in Africa, with exports providing 10.0-15.0% of the country's foreign exchange. It mainly grows in the country's southern regions, such as Matwara and Lindi, and more than 90.0% of the nuts are exported in raw form. The raw nuts are mainly exported to India for processing due to a very small processing capacity domestically. This factor is driving the agriculture market in the country.

Key Market TrendsFavorable Government Policies Supporting the Market Growth

Agriculture is the largest and most important sector of the Tanzanian economy, with the country benefitting from a diverse production base, including livestock, staple food crops, and various cash crops. The recent transformation in the agricultural sector is offering opportunities for growth, job creation, and poverty reduction. The government is also addressing certain issues by providing subsidies to farmers and investors and reducing needless levies impeding the sector's growth. The government also sought international funding for its flagship project, Tanzania's Southern Agricultural Growth Corridor (SAGCOT), which swiftly aims to exploit the region's agricultural potential. As a result of these broad initiatives, important crop production levels could increase in the future, boosting value-added processing in the industry. The government is planning to incorporate private sector engagement, including the Southern Agricultural Growth Corridor of Tanzania initiative, a public-private partnership, to increase the investments in the region. The research activities conducted in collaboration with local institutions help build the necessary capacity for long-term agricultural development. In 2020, the Ministry of Agriculture Tanzania and the World Vegetable Center (worldveg) signed a memorandum of understanding to improve R&D in vegetable crops and enhance nutrition and the country's food security. Thus, the private sector investments and policy initiatives may boost the market’s growth during the forecast period.

Increased Production of Banana is Driving the Market

The country’s fruit sector dominates the market, with popular fruits like bananas, mangoes, oranges, pineapples, and watermelons cultivated widely. The banana market in the country is developed due to exports and local demand by consumers. Tanzania and Uganda produce over 50% of all bananas grown on the entire African continent. Banana is part of the staple diet and one of the 10 main food crops in the country. Most bananas (over 70%) are grown in the Kagera, Kilimanjaro, and Mbeya regions in Tanzania. Other regions producing a significant amount of bananas are Morogoro, Kigoma, Mara, Arusha, Manyara, Ruvuma, Tanga, and Coast. The global export value of the banana trade was estimated at USD 8.9 billion before the outbreak of COVID-19, with a retail value standing between USD 20 billion and USD 25 billion annually. The market is flourishing due to the increased consumer demand, and thus, organizations are putting efforts into producing new varieties. For instance, the Tanzania Agricultural Research Institute developed 16 new drought- and disease-resistant banana hybrid varieties in the three predominantly banana-producing regions of Mbeya, Kilimanjaro, and Kagera. Such factors may drive the demand for bananas in the country.

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