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  • Tanzania: What Ails Agri-Business Sector in Tanzania

    Dec 11th, 2017

    Dependence on rain-fed farming, limited use of improved seeds and high prices of fertilisers and pesticides have been identified as obstacles to agribusiness in Tanzania. According to a World Economic Forum report on agribusiness, Tanzania's taxes on agribusiness are substantial and complex, involving land rent, local government levies, licences and a value-added tax (VAT) on fuel.

    Growth of the agricultural sector is also constrained by lack of infrastructure, including poor road transport, especially in rural areas, the report shows.The Agribusiness in Tanzania Report examines current conditions and factors that influence the success of the sector, including the support given by the government and foreign donor agencies.Despite the country's high growth rate of 6.9 per cent in 2016, poverty reduction has been slow because the growth rate of the agricultural sector has been lower than that of the country.

    Tanzania's economy is heavily dependent on agriculture, which according to the World Bank, accounted for 31.1 per cent of GDP in 2016.Figures published in the African Economic Outlook report show that the agricultural sector employs 66 per cent of the labour force, while agricultural products comprise 30 per cent of exports.Most farmers in Tanzania are engaged in small-scale farming on farms ranging between 0.9 hectares and 3 hectares in size and farming on a commercial scale is carried out on only 1.5 million hectares.Major food crops are maize, cassava, rice, potatoes, sweet potatoes and bananas, while the main cash crops are coffee, cotton, sugar cane, tea, cashew nuts, tobacco, sesame seeds and sisal.