WEF_GrowAfrica_AnnualReport2014

Forward Look
Forward Look
FORWARD LOOK
PRIORITIES FOR PROGRESS
All hands on deck to develop sugarcane,
rice and maize value chains
The BRN lab dedicated to agriculture defined the
strategic priorities to be achieved by 2015. It is
envisaged that these will be delivered largely through
PPP arrangements that prioritise value chains with
nucleus and out-grower farm models.
These models are expected to sustainably create
greater smallholder engagement, with out-growers
benefitting from training and inputs, while building
equity, higher productivity and motivation. In turn,
the nucleus farms will improve their efficiency and
effectiveness through the increased capacity of
smallholders, while benefiting from the good working
rapport developed in the process.
The PPP efforts are expected to develop 330,000 ha
of enhanced smallholder farmlands (out-growers) and
350,000 ha of new commercial farmland (not including
areas occupied by out-growers). This is anticipated to
result in 4 key outcomes:
•¡
sugarcane crop planting increased by 150,000
tonnes;
•¡
new rice production increased by 290,000 tonnes;
•¡
new maize output increased by 100,000 tonnes; and
•¡
the involvement of 400,000 smallholders in
commercial and out-grower schemes.
These outcomes are to be achieved by boosting
commercial farming and smallholder aggregation. To
that end, the partnership will be required to deliver:
•¡
25 commercial farming deals for rice paddy and
sugarcane;
•¡
78 professionally-managed collective rice irrigation
and marketing schemes; and
•¡
275 collective warehouse-based marketing schemes.
Progress against these strategic targets will be
monitored on a weekly basis by a Task Team reporting
to the Permanent Secretary for Agriculture, who
will in turn report to the Minister, the latter being
ultimately accountable for delivery on these priority
Investment and Partnering Opportunities
The following investment opportunities have been
identified by the Government of Tanzania:
Innovative input needed to unlock growth
potential of rice production
Tanzania’s rice yields are generally low, with the crop
being predominantly grown by smallholders. Growing
local demand for the commodity is being driven by
one of the fastest growing urban populations in the
East African Community (EAC), rising at 4.7% a year,
and a burgeoning middle class that prefers rice over
other staples. Producers in Tanzania also have dutyfree
access to regional markets in the rest of the EAC,
Southern African Development Community (SADC)
and Common Market for Eastern and Southern Africa
(COMESA), where demand and imports are also rising.
With imports being fuelled by consistently higher than
global rice prices in Tanzania, and by local production
failing to keep pace with demand, an opportunity is
created for investors ready to introduce the latest
techniques and inputs into the value chain.
Tanzania offers ideal conditions for rice cultivation, with
tropical temperatures, rich and fertile soil, abundant
sunshine and rainfall, and a number of large river
systems ideal for irrigated rice projects. Key cost
factors (labour, land and power) are very competitive
and generally lower than in alternate locations. Several
specific sites have been earmarked for large-scale
irrigated rice schemes, and one major rice venture
(based on the nucleus/out-grower model) is already
cultivating more than 10,000 ha, with some outgrowers
achieving yields of 8 tonnes/ha, proving the
success of the model.
Scope for developing modern
sugar operations
The GoT has put a high priority on attracting investors
to develop new greenfield sugar projects. Attesting
to the attractiveness of the sector in Tanzania, global
sugar industry players already present in Tanzania are
eager to explore these new opportunities.
With a rapidly growing population and rising incomes,
Tanzania’s sugar market growth is estimated at 6% p.a.
The current sugar supply gap is approximately 300,000
tonnes, expected to increase sharply as current estates
are limited in their expansion. An additional 400,000
tonnes sugar supply gap is observed in the EAC
region, growing at over 10% p.a., hence presenting
a significant import substitution opportunity within a
common market protected by a 30% external tariff.
The booming global ethanol market favouring African
producers and the local power market also offers
strong market opportunities for other sugarcane
products and by-products.
With ideal soils and climate for sugarcane production,
Tanzania boasts among the highest average cane
yields in the world, at 120 tonnes/ha. With ample
rainfall and generous rivers fed by high hinterland
plateaus, Tanzania has among the best irrigation
potential in the sub-region. Soils and topography in
target sugar zones lend themselves readily to industrial
sugarcane cultivation, and the government is preparing
further new sites for the development of greenfield
sugar estates.
Multiple prospects available in the
livestock value chain
Tanzania’s livestock population is estimated at 21.3
million (the largest in Southern Africa) and has been
increasing by 5% p.a. However, 97% of all animals are
kept by smallholders, who are often faced with poor
productivity and yields.
Increased population sizes, urbanisation and income
levels across Africa are boosting demand for meat.
Starting from a per-capita consumption of 12 kg p.a.,
Tanzania’s local demand for meat is expected to triple
by 2030. As current increases in livestock supply
will not be able to meet future demand, large-scale
investments are needed to provide technical skills
and capital to run ranches, feedlots, abattoirs, meat
processors and tanneries. Opportunities also exist
to service overseas demand, with Tanzania already
exporting meat to markets demonstrating significant
growth potential in the Middle East and neighbouring
countries.
Tanzania’s climatic conditions are ideal for livestock
operations, with high rainfalls providing mostly flat
grasslands with the necessary water to keep livestock
at a stocking rate of 1 animal per 3 hectares or better.
Of especial interest to investors are the 100,000 ha
of prime ranch land made available by the National
Ranching Company (NARCO), which would support
investments in feedlots, abattoirs, meat processors,
rendering plants and tanneries.
Point of contact for investments
Potential investors wishing to express their interest or
find out more should get in touch with:
Jennifer Baarn
Deputy CEO, SAGCOT Centre Ltd |
+255 786 83 96 65 | jennifer.baarn@sagcot.com
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Tanzania
Tanzania
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