Agriculture Investment in Tanzania

Overview

Agriculture remains the backbone of Tanzania’s economy, directly supporting the livelihoods of about 55% of the population and indirectly benefiting an additional 15% through related value chain activities such as processing, trading, and transportation. The sector contributes approximately a quarter of the country’s GDP and is a critical driver for inclusive growth, poverty reduction, and job creation. Tanzania’s government has set ambitious targets to transform agriculture into a sustainable, commercially competitive engine of economic growth by 2030, aiming for a 10% annual growth rate in the sector and a fivefold increase in export value from $1.2 billion to $5 billion.

Strategic Importance and Growth Potential

With a rapidly growing population (around 3% annually), Tanzania’s domestic demand for food is shifting from staple crops to higher-value horticultural and animal products, creating vast opportunities for agribusiness investment. The government’s Agriculture Sector Development Program (ASDP II) outlines a clear roadmap to commercialize agriculture, prioritize high-potential commodity value chains, and expand private sector participation.

Key priorities for 2025/2026 include:

Boosting productivity through seed research and improved seed and fertilizer subsidies.

Expanding irrigation with over 780 ongoing projects covering more than 543,000 hectares.

Establishing mechanization service centers to increase efficiency.

Strengthening agricultural growth corridors in Central, Southern, Mtwara, and Northern regions.

Enhancing post-harvest storage capacity, which has increased by over 200% in recent years.

Investment Opportunities

Tanzania offers diverse opportunities across multiple agricultural sub-sectors:

Crop Production: Large-scale farming of key crops such as maize, wheat, cashew nuts, coffee, tea, sunflower, and cotton. The government has earmarked significant land areas for wheat and other staple crop cultivation to reduce import dependence.

Agro-processing: Establishment of modern processing facilities for oil seeds (e.g., sunflower oil), cashew nuts, coffee, and other cash crops with VAT exemptions on processing equipment.

Seed and Input Production: Investment in high-quality seed multiplication, drought-resistant varieties, and distribution of subsidized fertilizers and pesticides.

Irrigation and Mechanization: Development of irrigation infrastructure and mechanization centers to improve yields and reduce reliance on rain-fed agriculture.

Value Chain Development: Opportunities exist in logistics, storage, packaging, and transportation services to support the growing agricultural sector.

Government Support and Incentives

Subsidies for fertilizers, seeds, and pesticides to reduce input costs.
VAT exemptions on agricultural machinery and processing equipment.
Land availability for commercial farming and agribusiness ventures.
Single-window system for permits and fee processing to streamline investment procedures.
Support from the Tanzania Investment Centre (TIC) and other government agencies for project facilitation.

Economic and Social Impact

The Ministry of Agriculture has created over 1 million jobs through various programs.
The sector aims to reduce post-harvest losses from 30-40% to 5% by 2030.
Medium-scale farms are growing, fostering market development and technology adoption that benefits smallholders.
Foreign Direct Investment (FDI) has a proven positive impact on agricultural productivity, with studies showing a strong correlation between FDI inflows and value-added growth in agriculture.