Tanzania's Agricultural Sector: Recent Performance and Long-Term Projections

GDP from Agriculture in Tanzania:

• In the third quarter of 2023, the GDP from Agriculture in Tanzania decreased to 6,640,612 TZS Million from 9,074,215.29 TZS Million in the second quarter of 2023.
• The average GDP from Agriculture in Tanzania from 2005 until 2023 was 5,512,854.60 TZS Million.
• The all-time high was recorded in the fourth quarter of 2022 at 10,408,404.15 TZS Million.
• The record low was in the third quarter of 2005 at 1,496,674.79 TZS Million.

Expectations and Projections:

• By the end of the current quarter, it's expected to be 9,591,446 TZS Million according to TICGL Econometric models and analysts' expectations.
• In the long-term, the GDP From Agriculture in Tanzania is projected to trend around 7,475,470 TZS Million in 2025 and 7,931,473 TZS Million in 2026, according to econometric models.

Tanzania's economic growth through agriculture:

Current Status:

• The GDP from agriculture in Tanzania experienced a significant decrease from the second to the third quarter of 2023, indicating a short-term downturn in agricultural output.
• Despite this decrease, the average GDP from agriculture has been increasing gradually over the years, reaching its peak in the fourth quarter of 2022.

Long-Term Trend:

• Long-term projections show a steady increase in the GDP from agriculture, with expected values of 7,475,470 TZS Million in 2025 and 7,931,473 TZS Million in 2026.
• These projections indicate that while there may be short-term fluctuations, the overall trend is positive for the agricultural sector's contribution to the economy.

Importance of Agriculture:

• Agriculture plays a crucial role in Tanzania's economy, as evidenced by its significant contribution to GDP.
• The sector's performance directly impacts the livelihoods of a large portion of the population, particularly those in rural areas who rely on agriculture for income and sustenance.

Challenges and Opportunities:

• The decrease in GDP from agriculture in the third quarter of 2023 may indicate challenges such as weather-related issues, market fluctuations, or other factors affecting agricultural production.
• However, the long-term projections show that there are opportunities for growth in the sector, potentially through increased productivity, technological advancements, and market development.

Policy Implications:

• Policymakers may need to focus on supporting the agricultural sector to ensure its continued growth and resilience.
• This could involve investment in infrastructure, research and development, access to finance, and policies that promote sustainable agricultural practices and market access for farmers.

Agriculture continues to contribute positively to Tanzania's economic growth:

1. Investment in Agricultural Infrastructure:

Infrastructure such as irrigation systems, roads, storage facilities, and market access points are crucial for enhancing productivity and connecting farmers to markets. Investing in these areas can improve efficiency and reduce post-harvest losses, ultimately increasing farmers' incomes and GDP from agriculture.

2. Research and Development:

Continued investment in agricultural research and development is essential to increase productivity, resilience to climate change, and the adoption of modern farming techniques. This can include breeding high-yield and drought-resistant crop varieties, promoting sustainable farming practices, and disseminating knowledge to farmers.

3. Access to Finance and Inputs:

Smallholder farmers, who form the backbone of Tanzania's agriculture, often lack access to credit and inputs like seeds, fertilizers, and equipment. Improving access to finance through microfinance schemes or rural banking can empower farmers to invest in their farms, leading to increased production and economic growth.

4. Market Development and Value Addition:

Enhancing market linkages and value addition can help farmers fetch higher prices for their produce. This involves supporting the development of agricultural value chains, processing facilities, and promoting agribusiness entrepreneurship. Additionally, improving market information systems can enable farmers to make informed decisions about what to produce and when to sell.

5. Policy Support for Smallholders:

Policies that support smallholder farmers, such as land tenure security, access to extension services, and risk mitigation strategies, are crucial for inclusive agricultural growth. Governments should also ensure that agricultural policies are coherent and supportive of sustainable development goals, including poverty reduction, food security, and environmental sustainability.

6. Climate Resilience and Sustainability:

Given the vulnerability of agriculture to climate change, efforts to build resilience and promote sustainable practices are paramount. This may involve investments in climate-smart agriculture, such as water harvesting, agroforestry, and conservation agriculture, as well as policies that incentivize sustainable land management practices.

7. Capacity Building and Education:

Investing in education and training programs for farmers, extension workers, and agricultural professionals can improve productivity, innovation, and overall sector performance. This includes training in modern farming techniques, business management, and access to information and technology.