Tanzania Report

InterviewsFebruary 15, 2021

SAGCOT: Geoffrey Kirenga Discusses Investment Opportunities in the Agricultural Sector in Tanzania

Geoffrey Kirenga, CEO of SAGCOT (Southern Agricultural Growth Corridor of Tanzania)

Tanzania Clifton Homes The Atlas 300x600 v1

: Written by Sandra Francisco; Published: February 15, 2021

What is your assessment of the agricultural industry in Tanzania?

Agriculture is the most important economic sector in Tanzania. It is also one of the main employers employing about 70% to 75% of the people in Tanzania. Tanzania now is over 100% self-sufficient as far as food is concerned for the past one or two decades and the sector is growing. Our aim is to reach 10%. Right now, it is around 5% growth per year. It is one of the areas in one of the few places in the world where there are still a lot of opportunities for investment and investment is happening. A transformation is also taking place. In the 80s and 90s, most of the production was from small scale farmers. We used to have a lot of smallholder producers and few light scale producers and in between there was nothing. But now with the investments happening in the agriculture sector, we are seeing the emergence of medium scale farmers. The missing middle now is actually retaining the neglected middle and that is where most of the changes and interesting things are happening.

Is Tanzania moving closer to achieving food security?

Yes, we are getting there. The major food that we consume here is maize. We produce enough maize for our local consumption and we have surplus to sell. We produce about 5 to 7 million tons annually. We have 1 to 2 million tons which we sell in the neighboring markets. We are also producing around 3 million tons of rice and we consume around 1 million, so we have surplus for rice as well. We supply rice in the regional markets and we are also looking for markets beyond Eastern Africa. We have sufficient production on fruits and vegetables. We are also selling onions, tomatoes, and oranges in the neighboring countries. There are some food items that we import and actually we do import in large quantities. Wheat, for example, we mill locally. We import around 1 million tons a year. We also import sugar and edible oils. Almost 80% of the edible oils that we consume in Tanzania is imported. We have identified those as investment opportunities. There are specific drives by the government and also the private sector to attract investment in wheat, edible oils, and sugar so that we can meet our own local demand and that of the East African market. Tanzania is a member of both the East African bloc and SADC (Southern African Development Community). Therefore, there are a lot of opportunities for markets to expand beyond Tanzania.

How do you attract FDI?

Tanzania is one of the well kept secrets as far as investment is concerned. It is a secret because most of the potential investors are not yet well informed about the opportunities that exist in Tanzania. But there are also few investors that have come in the country and they are doing a great job. For example, we have foreign investors in sugar, tea, and also in food crops but not as much as we would wish. We want to increase more of that in the coming years. We are very keen to attract those investors that are willing to observe the following points. The first is to invest in food security and the crops that will increase our food security issues. We would like to find those investors that are willing to make an inclusive investment. Most of our people are working in the agricultural sector. We want to be able to share the knowledge, skills, and other opportunities when they work in Tanzania. We certainly want investors that will take care of the environment, because we want that investment to continue to be available and sustainable. Therefore, we want green investors.

What are some of the major challenges in the sector?

We are honest brokers, facilitating engagement between the two because for agricultural development to happen in Africa that cannot be done by the government itself in isolation, neither can the private sector do it. It needs to be a true partnership. This is what SAGCOT is bringing as far as attracting investment.

This is a typical frontier market whereby you might not find all the things that will make agriculture work in one place, but we are working very hard with the government, especially the current government, to make sure that those challenges are removed. For example, if you come from the Midwest in the US and you come to invest in Tanzania and you want to produce cereals, in the Midwest, you will do the production part and then you will have all the players along the value chains in the storage, marketing, value addition, all the way to advertisement reaching the consumer. But if you are investing here, you will find yourself having to take care of the roads, electricity, water, you have to have your own storage, you have to have your own spare oil depot, and things of that nature. That is been an issue from the investorʼs point of view on the ground. But luckily, Tanzania is making efforts now to make sure that all the districts and all the regions are connected by tarmac roads, so the road infrastructure challenges are being addressed. To a large extent, now, Tanzania is one of the most connected countries in the African continent as far as tarmac roads are concerned. The second issue is electricity. Now, we are about to reach all the villages with power through power lines connected from the hydro power sources. The other issue is that of a structured market to make sure that things work efficiently. This is where you find laws, procedures, and institutions that will allow a structured marketing to appear. Therefore, you have things like the warehouse legislation put in place and institutions that govern that, but also, we are organizing farmers into cooperatives and associations that encourage them to work more efficiently amongst themselves as well as with businesses. Tanzania is one of the most peaceful countries in the region, if not the continent. We have never had a political strike that has been damaging to the economy since independence. Other issues include putting in place policies that are predictable and not disruptive to investors because once they come, they want an environment that is predictable. That is an area where we are working with the government and the government has been very accommodative. We have been improving policies continuously for the past 10 years and that means we are making progress. We have managed to make agriculture, issues of taxation, and the other costs come down over the years, but also, we have managed to make the government sensitive to issues of not interfering with the marketing. This progress is the reason why we are attracting investment. Now, the areas of horticulture, poultry, dairy are beyond the traditional areas where we have been investing. These are new areas that are coming up and we are encouraging partners to come in even in the new areas like wheat, edible oils, and also value addition in some other crops like in horticulture, cotton, tea, coffee so that we can be producing and exporting commodities as well as crops that have added value.

What is your take on GMOs versus fully organic products?

We need some clarity in this particular area. Tanzania has never released any GMO seed or crop for marketing within Tanzania or production. All the crops that are produced in Tanzania, edible and non-edible, are non GMO. We do have legislation that governs on how that can be done in Tanzania, and especially in the research part. But at the moment, because of the issues of capacity and also lack of clarity on how that needs to be done properly, there is a ban on addressing issues of GMO in agriculture. With regards to organic status, for a crop to be accepted as organic it has to not only be produced following the organic standards, but it also needs to be certified. If you can produce without using the external inputs, such as fertilizers, pesticides, and things of that nature, but that crop is not certified, you cannot actually claim that crop to be organic. There are crops that have been produced under the organic standards of East Africa which we developed together with our neighboring countries. Those are being mostly exported with few being consumed locally. Most of the crops produced are non GMO, but they are not actually certified as organic, because they are still being produced using external inputs like industrial fertilizers as well as crop protection products that are not allowed to be used in organic production. Tanzania is not into GMOs, but we are producing using the seeds that have been bred in a natural way and not through genetic transformation.

What is the impact of climate change on agriculture in Tanzania?

Climate change now affects almost every part of the world. You can see how crazy the weather has been in the northern hemisphere and sometimes in the southern hemisphere. Tanzania is somewhere in the middle on the Equator. We do have our own share of unpredictability with the seasons, especially where agriculture is mainly dependent on rainfall. We are a very small area that is doing very well at the moment, but the pattern has been not as predictable as it used to be in the past, especially in the middle part of the country and in the northeastern regions. Luckily, the southern part of Tanzania, that is the Southern Highlands, the regions that border Zambia and Malawi, and some regions in the west bordering Burundi, Rwanda, and DRC actually have never experienced drought. This is where we produce most of our food. For example, in the Southern Highlands, where SAGCOT is working and where we produce about 65% of the food we consume in the country, the weather there has been stable. Sometimes, we do receive more than what is necessary as far as rain is concerned. Last season, in the northern part, the weather was unpredictable. We are also taking measures to see what we can get when the rainfall is good and when rains are not coming as expected. We are developing technologies which we call climate smart agriculture. Farmers are being trained on how to use the rainfall that is available and technologies that will allow moisture availability to continue to be available to plants, preserving it, and making sure that you have healthy plants that will have stronger roots that can go and reach and get the moisture that is available. We are training farmers in good agricultural practices such as understanding what type of soils they have, what the nutrient deficiency is, if it is acidic, if there is too much salt, what corrective measures can be put in place, building the organic matter content, and planting the right seeds, especially with seeds that are tolerant to drought. It has been working fantastically. The productivity for those farmers that have been practicing those technologies has been doubling or tripling and that has contributed to making sure that we have sufficient food in the country which adds value to the country.

COVID-19 has had a significant impact on economies. What has been the impact on the Tanzanian agricultural industry?

This is the second season since COVID-19 came into the world. Starting last year, like many other countries, Tanzania took all the necessary precautions to inform the public in general and also those in the agricultural sector. We were worried that this would negatively impact the agricultural sector but it came earlier in the season when farmers had already prepared their farms and also people working in the value addition and the marketing. It dissipated over time and the crop has been growing very nicely and we have harvested the crop. In terms of health, farmers and the communities at large have been trained on how to take care of themselves in hygiene, social distancing, and the reduction of interaction. Tanzania, like many other parts of the African continent, has been spared the worst compared to what has happened in other places to the extent that we can tell the public confidently to take care, as advised by the health sector, but also to continue doing their work as planned. People have to live, people have to eat, people have to produce. Therefore, we find new ways of managing the situation and at the same time continue to be productive.

What are some of your success stories and achievements?

We have specific targets. For example, from 2010 when we were formed as an institution we created an initiative that $2.1 billion of investment will happen in the corridor. About $1.4 billion of investment will happen from the public sector by 2030 and $2.1 billion will come from the private sector. We did an analysis last year and we realized that we have now achieved $800 million already investment in the corridor. We have about 120 partners and 80% of those are private investors in the corridor. We are still going strong. We see investments in potatoes, tea, the dairy sector, the livestock and poultry sectors, and also we see interest in sunflower. We are advising the government in the areas of policy improvement and infrastructure development, especially in the rural areas. We have seen a very good response from the private sector. We have changed some policies to make the agricultural sector more attractive. That is useful in retaining the investments that are already in the country. We are also getting inquiries to see what can be done and we are collaborating with other institutions and development agencies that are within the country. For example, we are very grateful for the support that we are getting from the government of Tanzania itself through the Ministry of Agriculture and also the ministries responsible for trade. We are also getting support from various donors, USAID, DFID, the Norwegian embassy in Tanzania, and other institutions working in the agricultural sector. The EU and the World Bank have been supporting our initiatives over the years and now we are also bringing in USDA which is an organization in the US to support the agricultural sector. Most importantly, we are working with the regional body that is known as AGRA, Alliance for a Green Revolution in Africa, to make sure that the continental development is also being mirrored in Tanzania. Those are great partners that are working here. This success is alignment, making sure that the public and the private sector are working together, change of the mindset, and showcasing that Africa can produce to the same levels of efficiency as elsewhere in the world, whatever value chain you are in. Tanzania can be a place to come and see how that can be done successfully in an African environment and be copied elsewhere in the world.

Does SAGCOT focus more on importation or locally producing in Tanzania?

We produce and also encourage exports. We are working with our partners and the government to make sure that it is a deliberate decision from the government that Tanzania will be producing for export, because we want to have an export led economy and an export led agricultural sector because that is where wealth can be created. Being self-sufficient does not mean that you have done your job. You need to be efficient and competitive as far as the business is concerned. It is great that this government has agreed to put in place a policy that is going to encourage an export led economy. We are sure that Tanzania will be able to do that. This should not only happen to Tanzania. Africa is importing around $3 to $5 billion of commodities from the global market. That means that Africa is depending on the rest of the world to feed itself. But there are regions in Africa where things can be produced in surplus and supplied within the African continent. We want Tanzania to position itself and we are positioning ourselves to take advantage of that. Instead of Africa importing from the rest of the world, we should be able to feed the continent based on where food can be produced in surplus. But also, Africa needs to take its rightful place in global food security because when you look at the population of the world approaching 9 to 10 billion, Africa has around 60% of the land that is either not yet properly utilized or has never been utilized for agricultural production. The analysis that was done in 2014 indicated that of 60% of land which is in Africa, 50% of that 60% is in Tanzania, Zambia, and Mozambique. These countries are central in making sure that Africa is food self-sufficient but also can play its role as a pillar of food security at a global level.

Is Tanzania taking advantage of the African Free Trade Agreement?

Yes, we were looking at that. The policies and the stakeholders are looking also because that is unleashing a new opportunity for the continent and all other countries, including Tanzania. It is not a question of just joining. It is a question of what advantages are going to take into that. We do not want to be only the market, but we want to be a country that will actually benefit from that by accessing more markets based on what we can produce a surplus of, which we know we can because we are already doing that. We are exporting various cereals, especially maize and rice. We can also export other crops that we produce.

What is your vision for SAGCOT in the medium term, the next three years?

In agricultural terms, three years is a very short period of time. What we are looking at is what we have achieved. Of course, we have attracted investment – both local and international, we have developed new value chains, we have been working with the government to improve infrastructure, we are working with the government to change the mindset and allow the private sector and the government to come and work together more closely. The issue now is to deepen those achievements to make them more successful at the local, regional and national level. We are working with the government to expand these achievements to other parts of the country, attracting more investments from local entrepreneurs and local investors, but also attracting investment from beyond the borders of Tanzania, in the region and as well as internationally. We want Tanzania to create a global network of friends and partners to open up Tanzania for business and also for Tanzania to be able to export agricultural produce.

What led you to have so much passion for agriculture?

It has been my passion because I was born and raised in the rural areas of Tanzania, in the northern parts in the Arusha region. I have been living very close to agricultural development, near smallholders and as well as organized agriculture, and even some industrial facilities. As I was growing up, I was asking myself, how can I be useful in this country? Will I be a teacher? Will I be a doctor? I knew that being a pilot was not my passion because I am not a person interested in high speeds. So, looking around, I thought that agriculture could be the answer so I went into studying crops. It is a fascinating area. Because of the endless challenges, sometimes it is difficult to find yourself. I went into studying issues of increasing production and productivity and ended up in crop protection, especially in managing large scale pests and developments like locusts, rodents, etc. For that particular area, you need to organize yourself into making sure that there are the right policies and also that the infrastructure can allow successful management of those pandemics. But in order to do that successfully, you find yourself interacting with policymakers and investors that can bring in the technology and the knowledge that is required. And that, over time, puts you working very closely with the business community and also the leadership. That is how I came to find myself in SAGCOT. I am quite sure that I am using my experience working in the government, but also working very closely with the private sector to develop and forge a true partnership in order to transform the agricultural sector in Tanzania. SAGCOT is one of the institutions that is doing this now in a transformative way and also developing a brand on how that can be done in developing countries successfully.

What are your current projects?

At the moment, we are very interested in horticulture value chains, especially fruits and vegetables for local and export markets. In the world now, there is a lot of demand in crops like avocados, but also internally here in the African continent, there is an increased appetite for apples. One interesting thing is that you can produce both of these crops in a very efficient way in the Southern Highlands of Tanzania where we work very closely. Therefore, we are looking at that, but also we are adding value in those crops. When you produce avocado, there is always about 15% to 20% that cannot be exported. Out of that, you can develop very good, very high quality oil that is edible, but it also can be used for cosmetic purposes. There are three factories that have been put in place for this. We are also discovering that as the country develops, and there is an increasing number of middle class, there is an increased demand in high value commodities like poultry and dairy. We are very interested in developing those two value chains and we are supporting the private sector to work in that particular area and also the government to put in place policies that will allow that to happen more efficiently. For example, Tanzania has the same population as South Africa, but the consumption of poultry is only 4% of what is happening in South Africa. That indicates that there is a huge market for that. We only consume less than 3% of the milk that is produced in Tanzania. The rest is not yet processed in an added value. We can add value in that particular value chain as well. That is a huge opportunity. In terms of imports, we import close to 1 million tons of wheat annually and we still have enough land that can be used to produce wheat here. We are talking with local as well as external FDIs to come and work with us to produce wheat within Tanzania. We need the investor to come and share with us what is needed in order for that to happen.

How do you finance your development? Do you get assistance from the government?

We experience a benefit from the support of the Tanzanian government and development partners. FCDO is an institution from the UK supporting development in developing countries. We also work with USAID, the USDA, United States Department of Agriculture, and also the Norwegian embassy, as part of our regional support. We also have received support from the World Bank, the United Nations, and also from the EU on the ground, especially regarding issues of development of infrastructure, capacity building, training, and also being supported by AGRA, Alliance for a Green Revolution in Africa. What makes SAGCOT unique as an institution is that it is a company limited by guarantee nonprofit. It is neither a private sector nor a governmental institution. We exist in between which allows us to work with government, but also to work with the private sector as equal partners. We are honest brokers, facilitating engagement between the two because for agricultural development to happen in Africa that cannot be done by the government itself in isolation, neither can the private sector do it. It needs to be a true partnership. This is what SAGCOT is bringing as far as attracting investment. We went through the Investment Promotion Center for Tanzania. But also, on the trading side, we work very closely with the Tanzanian organization known as TanTrade. In the private sector, we work with the Tanzania Private Sector Foundation, which is the umbrella organization for the Chambers of Business in industry, agriculture, and also trade. This brings a lot of partners together and ensures alignment to make sure that we have a joint position and strategy as far as development is concerned.

FAIR USE POLICY
This material (including media content) may not be published, broadcasted, rewritten, or redistributed. However, linking directly to the page (including the source, i.e. Marcopolis.net) is permitted and encouraged.

" }

Interview with Geoffrey Kirenga, CEO of SAGCOT (Southern Agricultural Growth Corridor of Tanzania)

Geoffrey Kirenga, CEO of SAGCOT

What is your assessment of the agricultural industry in Tanzania?

Agriculture is the most important economic sector in Tanzania. It is also one of the main employers employing about 70% to 75% of the people in Tanzania. Tanzania now is over 100% self-sufficient as far as food is concerned for the past one or two decades and the sector is growing. Our aim is to reach 10%. Right now, it is around 5% growth per year. It is one of the areas in one of the few places in the world where there are still a lot of opportunities for investment and investment is happening. A transformation is also taking place. In the 80s and 90s, most of the production was from small scale farmers. We used to have a lot of smallholder producers and few light scale producers and in between there was nothing. But now with the investments happening in the agriculture sector, we are seeing the emergence of medium scale farmers. The missing middle now is actually retaining the neglected middle and that is where most of the changes and interesting things are happening.

Is Tanzania moving closer to achieving food security?

How do you attract FDI?

What are some of the major challenges in the sector?

We are honest brokers, facilitating engagement between the two because for agricultural development to happen in Africa that cannot be done by the government itself in isolation, neither can the private sector do it. It needs to be a true partnership. This is what SAGCOT is bringing as far as attracting investment.

What is your take on GMOs versus fully organic products?

What is the impact of climate change on agriculture in Tanzania?

COVID-19 has had a significant impact on economies. What has been the impact on the Tanzanian agricultural industry?

What are some of your success stories and achievements?

Does SAGCOT focus more on importation or locally producing in Tanzania?

We produce and also encourage exports. We are working with our partners and the government to make sure that it is a deliberate decision from the government that Tanzania will be producing for export, because we want to have an export led economy and an export led agricultural sector because that is where wealth can be created. Being self-sufficient does not mean that you have done your job. You need to be efficient and competitive as far as the business is concerned. It is great that this government has agreed to put in place a policy that is going to encourage an export led economy. We are sure that Tanzania will be able to do that. This should not only happen to Tanzania. Africa is importing around $3 to $5 billion of commodities from the global market. That means that Africa is depending on the rest of the world to feed itself. But there are regions in Africa where things can be produced in surplus and supplied within the African continent. We want Tanzania to position itself and we are positioning ourselves to take advantage of that. Instead of Africa importing from the rest of the world, we should be able to feed the continent based on where food can be produced in surplus. But also, Africa needs to take its rightful place in global food security because when you look at the population of the world approaching 9 to 10 billion, Africa has around 60% of the land that is either not yet properly utilized or has never been utilized for agricultural production. The analysis that was done in 2014 indicated that of 60% of land which is in Africa, 50% of that 60% is in Tanzania, Zambia, and Mozambique. These countries are central in making sure that Africa is food self-sufficient but also can play its role as a pillar of food security at a global level.

Is Tanzania taking advantage of the African Free Trade Agreement?

What is your vision for SAGCOT in the medium term, the next three years?

What led you to have so much passion for agriculture?

What are your current projects?

At the moment, we are very interested in horticulture value chains, especially fruits and vegetables for local and export markets. In the world now, there is a lot of demand in crops like avocados, but also internally here in the African continent, there is an increased appetite for apples. One interesting thing is that you can produce both of these crops in a very efficient way in the Southern Highlands of Tanzania where we work very closely. Therefore, we are looking at that, but also we are adding value in those crops. When you produce avocado, there is always about 15% to 20% that cannot be exported. Out of that, you can develop very good, very high quality oil that is edible, but it also can be used for cosmetic purposes. There are three factories that have been put in place for this. We are also discovering that as the country develops, and there is an increasing number of middle class, there is an increased demand in high value commodities like poultry and dairy. We are very interested in developing those two value chains and we are supporting the private sector to work in that particular area and also the government to put in place policies that will allow that to happen more efficiently. For example, Tanzania has the same population as South Africa, but the consumption of poultry is only 4% of what is happening in South Africa. That indicates that there is a huge market for that. We only consume less than 3% of the milk that is produced in Tanzania. The rest is not yet processed in an added value. We can add value in that particular value chain as well. That is a huge opportunity. In terms of imports, we import close to 1 million tons of wheat annually and we still have enough land that can be used to produce wheat here. We are talking with local as well as external FDIs to come and work with us to produce wheat within Tanzania. We need the investor to come and share with us what is needed in order for that to happen.

How do you finance your development? Do you get assistance from the government?

Tanzania Report

SAGCOT: Geoffrey Kirenga Discusses Investment Opportunities in the Agricultural Sector in Tanzania

Geoffrey Kirenga, CEO of SAGCOT (Southern Agricultural Growth Corridor of Tanzania)

Interview with Geoffrey Kirenga, CEO of SAGCOT (Southern Agricultural Growth Corridor of Tanzania)

Most Read on Marcopolis

Related Tanzania Agriculture