Overview

Agriculture is a cornerstone of Tanzania's economy, playing a pivotal role in the country's industrialization by providing markets for industrial products and raw materials. Tanzania boasts 44 million hectares of arable land, with an estimated 29.4 million hectares suitable for irrigation, indicating significant potential for agricultural expansion and intensification.

Quick Facts

• Employment: Agriculture employs about 67% of Tanzania's employed population, highlighting its importance in providing livelihoods and supporting the broader economy.
• Livestock: Tanzania has the second-largest livestock population in Africa, underlining its potential in the meat and dairy industries.
• Meat Processing: Less than 1% of all meat is processed locally, while large quantities of processed meat are imported. This represents a significant opportunity for the development of local meat processing industries.
• Freshwater Resources: The area of freshwater cover is estimated at 54,337 square kilometers, accounting for about 6.1% of Tanzania's total surface area. These freshwater resources are crucial for agriculture, fisheries, and domestic use.
• Marine Resources: Tanzania has a Territorial Sea covering 64,000 square kilometers, an Exclusive Economic Zone (EEZ) of about 223,000 square kilometers, and a 1,424-kilometer coastline along the Indian Ocean. These marine resources offer substantial potential for the fishing industry and other maritime activities.
• Sugar Production: Tanzania produces approximately 300,000 tonnes of raw sugar annually (based on 2014/2015 figures), leaving a demand gap of about 220,000 tonnes to be met through imports. The sugar supply gap is projected to increase at an estimated 6% per annum from the current 300,000 tonnes per year.
• Sugar Estates: There are four existing sugar estates in Tanzania, collectively producing 300,000 tonnes of sugar per year, operating at full capacity.
• Cane Yields: Tanzania has some of the highest average cane yields globally, at 120 tonnes per hectare, due to favorable soils and climate conditions.
• Irrigation Potential: With ample rainfall and rivers fed by the high hinterland plateaus, Tanzania has some of the best irrigation potential in the sub-region, offering significant opportunities for expanding irrigated agriculture.
• Soil and Topography: The soil and topography in target sugar zones are ideal for industrial sugarcane cultivation, further supporting the potential for growth in this sector.
• Edible Oil Imports: Tanzania spends over US$ 150,000 annually to import edible oil. The lack of modern mechanical extraction equipment and low agricultural productivity have made Tanzania reliant on imported edible oil.
• Potential for Edible Oil Industry: Tanzania has the potential to develop a competitive edible oil industry based on sunflower, cotton, groundnuts, soya beans, and palm. With increased production and productivity, these crops could support a robust edible oil industry for both the domestic and regional markets.

Strategic Implications

The agricultural sector's central role in Tanzania's economy underscores the need for strategic investments in infrastructure, technology, and skills development to enhance productivity and value addition. Key areas for development include meat processing, sugar production, and the edible oil industry. Addressing these areas can significantly reduce import reliance, create jobs, and stimulate economic growth.

Hence, leveraging Tanzania's vast freshwater and marine resources can further support agricultural diversification and sustainability.

Key Insights on Tanzania's Diplomatic Economy

Tanzania can strengthen its agricultural sector's role in the diplomatic economy, driving economic growth and improving international standing.

1. Agricultural Employment and Livelihoods:
   • Diplomatic Leverage: Agriculture employs about 67% of Tanzania's population. This substantial workforce can be leveraged diplomatically to secure international support for agricultural development, including technology transfer, training, and investment in infrastructure.
   • Bilateral and Multilateral Agreements: Tanzania can negotiate favorable trade agreements and development partnerships that focus on agricultural advancements and employment creation.
2. Livestock and Meat Processing:
   • Investment Attraction: As the second-largest livestock population in Africa, Tanzania has a significant opportunity to attract foreign direct investment (FDI) into its meat processing industry. Emphasizing this potential in diplomatic discussions can lead to collaborations that enhance local processing capacities.
   • Regional Trade Opportunities: Strengthening the meat processing industry locally can position Tanzania as a regional hub for processed meat, boosting exports to neighboring countries and beyond.
3. Freshwater and Marine Resources:
   • Sustainable Resource Management: Diplomatic efforts can focus on securing international assistance for sustainable management of freshwater and marine resources. Partnerships with countries experienced in these areas can help develop Tanzania's fishing industry and improve water resource management.
   • Blue Economy Initiatives: Tanzania's extensive EEZ and coastline provide opportunities for blue economy initiatives, which can attract international interest and investment in sustainable maritime industries, fisheries, and tourism.
4. Sugar Production and Processing:
   • Closing the Supply Gap: The demand gap for sugar presents an opportunity for diplomatic engagements aimed at attracting investment into the sugar industry. International partnerships can help expand production capacity and reduce reliance on imports.
   • Technological and Capacity Building: Diplomatic negotiations can secure technical assistance and capacity-building programs from countries with advanced sugar industries, improving local yields and processing capabilities.
5. Edible Oil Industry Potential:
   • Import Substitution: Reducing reliance on imported edible oil by developing local production capacities is a strategic priority. Diplomatic efforts can focus on partnerships for modern mechanical extraction equipment and agricultural productivity enhancement.
   • Regional Market Integration: Tanzania can position itself as a key player in the regional edible oil market by leveraging diplomatic ties to foster regional integration and cooperation, ensuring a steady market for its products.
6. Agricultural Technology and Innovation:
   • Diplomatic Alliances: Forming alliances with countries known for their agricultural technology and innovation can bring advanced techniques and equipment to Tanzania. This can enhance productivity, sustainability, and overall sector growth.
   • Research and Development: Diplomatic efforts can include agreements for joint research and development projects, focusing on crop improvement, pest control, and climate resilience, vital for Tanzania's agricultural sustainability.
7. Economic Diplomacy:
   • Export Promotion: Leveraging diplomatic channels to promote Tanzanian agricultural products in international markets can boost exports, create jobs, and generate foreign exchange.
   • Trade Negotiations: Engaging in trade negotiations to reduce tariffs and non-tariff barriers on Tanzanian agricultural products can enhance competitiveness and market access.

Strategic Recommendations

• Enhance Diplomatic Engagements: Prioritize agricultural development in diplomatic dialogues, focusing on technology transfer, investment, and capacity-building.
• Strengthen Trade Partnerships: Develop strategic trade partnerships to promote Tanzanian agricultural products, reduce barriers, and secure better market access.
• Promote Sustainable Practices: Collaborate with international partners to implement sustainable agricultural and resource management practices.
• Invest in Infrastructure: Seek international support for infrastructure development crucial for agriculture, such as irrigation systems, roads, and processing facilities.
• Foster Regional Cooperation: Utilize regional bodies and agreements to enhance agricultural trade and collaboration, benefiting from shared resources and markets.