The Way Forward

The Southern Agricultural Growth Corridor of Tanzania (SAGCOT) is an agricultural development initiative aimed at increasing productivity and encouraging employment in the sector, along with ensuring greater food security for the country. In its own words, the SAGCOT is planning on “doing things differently to get things done and to make a real difference. This is about business as unusual.”

If this mega-plan works, the Tanzanian government believes it can succeed in lifting 2 million households out of poverty. The urgent need for an initiative such as SAGCOT is all too apparent when you consider that around 85% of Tanzania’s population live in rural areas and rely on agriculture as their main source of income. Subsistence farming is the norm and many Tanzanian farmers are earning less than $1 a day. The issues they face currently include poor access to markets and financing, an uneconomic scale of production, inadequate infrastructure support, and a predominance of low-yield primary resource inputs. For example, of Tanzania’s 2.5 million cattle, 14 million goats, and 4 million sheep, more than 90% are low yield, unimproved breeds.

The political drive for SAGCOT to get off the ground came out of the World Economic Forum on Africa meetings held in Dar es Salaam in 2010. Then in January 2011, Tanzania’s Prime Minister, Mizengo Pinda, launched SAGCOT’s Investment Blueprint setting out a framework for development, along with investment opportunities in the corridor. The concept of partnerships is key to the scheme with the government looking to involve local farmers and their communities, agricultural associations, agribusiness, the public sector, and all the way up to international donors in the process. Crucially, at the end of September 2014 the Tanzanian government signed a joint financing and cooperation agreement with six international partners, including the World Bank, the United Nations Development Programme (UNDP), the United States Agency for International Development (USAID), and the EU. According to SAGCOT, “The funders believe that their efforts will trigger a major increase in agricultural production in the southern corridor and improve the productivity and incomes of smallholder farmers.”

The ambitious work plan set out by SAGCOT will require $15 million in funding per year, but that is expected to stimulate $2.1 billion in private investment over the next 20 years. The Tanzanian government is, in turn, expecting to contribute $1.3 billion in loans and grants over that same period. It is hoped that the outcome of all this investment will be a tripling of agricultural activity in the corridor by 2035. According to the Investment Blueprint figures, amongst numerous other benefits, this will trigger the creation of around 700,000 jobs: 420,000 on farms, 120,000 in agricultural processing, and 160,000 in the broader agricultural value chain in Tanzania.

In geographic terms, the corridor covers one-third of mainland Tanzania, or approximately 287,000 square kilometers, and contains a population of around 9 million. The development corridor runs east-west from Dar es Salaam on the Indian Ocean coast, to Tunduma, in the Mbeya region on the country’s western border with Zambia. This area encompasses the main road, rail, and power infrastructure that run across the country, together with the Port of Dar es Salaam. Due to the diversity of climate and terrain found over the length of the corridor, there are an enormous variety of agricultural activities that can be undertaken. Viable crops include cereals such as barley, wheat, and rice, as well as legumes, bananas, sugar, coffee, tea, and sunflowers. Cattle farming, freshwater and salt water fisheries, along with aquaculture connected to dams, are other agricultural activities ripe for further development and investment in the corridor. To ensure that environmentally sustainable growth occurs, SAGCOT has published a Greenprint alongside its development Blueprint. The next step for SAGCOT is the creation of what have been termed development clusters along the corridor. The rationale being that by encouraging concentrated development and investment at set points along the corridor, each player in a cluster can lend support to the other businesses. This means growth can be accelerated without the unnecessary duplication of effort at numerous discrete points along the corridor. The creation of logistics hubs is one simple example of this model in action. And the government has already identified development cluster opportunities in Sumbawanga, Ihemi, Kilombero, Mbarali, Ludewa, and Rufiji, for example. These include a forestry project, a rice plantation development using improved seed varieties, the upgrading of unpaved trunk roads, and port infrastructure improvements.With SAGCOT, the message from the government seems clear; with all that needs to be done in agriculture, there are multiple opportunities for investment, the time is right, the plan is in place, and the government is ready and willing to support partnerships in the sector.