World Bank Approves $70M Fund to Support Ag Sector in Tanzania

Tanzania's agricultural sector received a boost last week as the World Bank approved new funding to be directed toward creating better linages between smallholder farmers and larger agribusinesses. The newly approved $70 million will be invested in programs that support the linking of the country’s smallholder farmers to larger agribusinesses.

Under the country’s current development strategy, the Tanzanian government implements the Southern Agricultural Growth Corridor of Tanzania (SAGCOT) Program, which has been established to resolve low farm output and limited market access – two key factors that are challenging the growth of the country’s ag sector. New financing, through the World Bank's International Development Association (IDA), will support the newly approved SAGCOT Investment Project, intended to strengthen connections between Tanzanian smallholders and more lucrative agribusinesses in the country’s Southern Corridor.

“Smallholder farmers play a central role in Tanzania’s agricultural sector” says Bella Bird, World Bank Country Director for Tanzania, Burundi, Malawi and Somalia in a World Bank statement. “The SAGCOT Investment Project has the potential to be transformational as it will provide them with crucial access to capital and new technology needed to invest in higher value production, promote their livelihoods and meet their nutritional needs.”

The SAGCOT Investment Project is expected to directly impacted more than 500,000 people and 40 agribusiness opertors, and put particularly emphasis on engegaing women in successful value chains.

The Tanzanian government has established two new private-public partnership institutions to oversee the implementation of the SAGCOT Program – the SAGCOT Center, responsible for planning and advertising the program, and the SAGCOT Catalytic Trust Fund, which is a fund created to match early-stage investments in the corridor.

“Tanzania has achieved demonstrable successes in boosting productivity in the horticulture, rice, sugar and tea sectors,” says Mark Cackler, World Bank’s Manager for the Agriculture Global Practice. “The challenge is to extend the reach of existing efforts and expand poor farmers’ access to lucrative market opportunities, which are the goals of the project.”