Tanzania’s edible oil dilemma: How imports 'export' local jobs

This leaves an average annual deficit of 400,000 tonnes, meaning the nation currently meets only 40 percent of its edible oil requirements through domestic production. The financial cost of this shortfall is substantial as Tanzania spends more than Sh500.6 billion ($200 million) annually on edible oil imports to meet domestic demand.

Experts warn that the expenditure represents a missed opportunity for industrial expansion and wealth creation, as the capital leaves the country instead of stimulating the local value chain. Speaking on the macroeconomic implications, an expert from the Agriculture Transformation Office (ATO), Dr Juma Makaranga, said the financial drain is directly linked to the national Vision 2050 agenda.

"By 2050, as a nation, we aim to have a high-middle-income economy with a GDP (gross domestic product) of $1 trillion. To achieve this, the country must trade; we cannot have that volume of money without business, and business is the result of investment," he told a recent investment forum in Dodoma.

Dr Makaranga said the current import bill effectively exports Tanzanian livelihoods.

"The $200 million is exported every year, essentially sending away over 20,000 potential jobs. By investing roughly $380 million annually, we could create about 7,000 jobs every year for the next decade," he said.

To reverse the trend, he proposed a 10-year investment strategy running to 2035 requiring Sh1 trillion, with Sh700 billion expected from the private sector.

“We have no choice but to invest in the oil strategy, and the government's role is to ensure the private sector can thrive,” he added.

To encourage greater private sector investment, Ms Diana Masesa of the Tanzania Investment and Special Economic Zones Authority (Tiseza) outlined a range of fiscal incentives, hinting that the government is prioritising tax exemptions on capital goods.

“Various specific cases have been identified where an investor importing industrial machinery, specifically those under chapters 84, 85, and 60 of the tariff code, will receive tax exemptions,” she said.

She added that ‘deemed capital goods’, including prefabricated steel buildings and cargo trucks, qualify for a 75 percent exemption on import duty under a certificate of incentives.

Alongside fiscal measures is an ambitious land allocation strategy with Ms Masesa saying strategic sites have been earmarked, including 19 hectares in Ngerengere and more than 48,000 hectares across Uvinza, Kasulu and Kibondo for palm oil cultivation and oil processing.

She added that the government is also investing in the future through the Build Better Tomorrow (BBT) youth farming project, which has allocated more than 24,000 hectares in areas including Kasulu and Buhigwe to integrate young Tanzanians into the edible oil value chain.

However, the path to self-sufficiency remains clouded by misconceptions about large-scale processors.

Wilmar General Manager Mr Yiannis Ferreira said large firms are not competitors of local processors, but among their biggest potential customers.

"There is a big misconception that large processors like Wilmar, Afrisian, or Azania compete with domestic oil processors. In countries like Zambia, Zimbabwe, and South Africa, we are recognised as a vital part of supporting domestic oil,” he said.

“We only import oil to fill the gap in the market. We are actually promoters of local oil because the more we can source locally, the less we have to import. If we could source 100 percent Tanzanian oil, we would be very happy,” he added.

Despite strong demand from large processors, factories continue to face shortages of quality raw materials.

Afrisian Ginning Limited logistics manager, Mr Zoheb Osmen, said factory utilisation stands at only 40 percent.

"This means 60 percent of our investment is idle and depreciating," he said, citing high moisture content and contamination from stones and dust in oilseeds.

The crisis is even more pronounced in Kigoma's palm oil sector, with the Tanzania IVS Limited managing director, Mr Abdul Mwilima, recounting how advanced technology had been undermined by shortages of raw materials. He said despite owning one of the country's most advanced palm oil mills, the factory has remained closed since May 2024.

"The installed machine can process one tonne of crude oil per hour, requiring 150 tonnes of fruit every 24 hours. In the first three months of 2024, we travelled across Kigoma and only managed to find 150 tonnes of fruit in 90 days," he said.

Mr Mwilima said a ‘yield revolution’ is essential, noting that older palm varieties produce only 1.5 tonnes per hectare compared with five tonnes achievable using improved seeds. The concern is shared by small-scale sunflower processors facing a different challenge and limited access to finance.

Tanzania Sunflower Processors Association (Tasupa) chairman Mr Ringo Iringo said many rural processors lack the land titles banks require as collateral, possessing only village certificates. “This limits us to old, inefficient technologies that people simply pass on to one another,” he said.

At farm level, growers such as Mr Elias Marwa of Kibiti describe what he called a logistical ‘seedling odyssey.’

Mr Marwa, who manages 5,000 palm trees, said he waits years for seedlings from the Tanzania Agricultural Research Institute (Tari) while paying huge transport costs. “I have to hire semi-trailers to bring seedlings from Tabora or Kigoma, which is thousands of kilometres away. A seedling that costs Sh3,000 ends up costing Sh7,000 by the time it reaches Kibiti,” he said.

To close these gaps, stakeholders are calling for far-reaching policy reforms, including establishing the National Edible Oil Board and a dedicated Palm Oil Development Fund.

Mr Marwa suggested the fund could be ‘funded by a small levy of Sh100 per litre on imported oil,’ generating up to Sh50 billion annually to subsidise local seed production and factory development, ultimately transforming the country's ‘jobs export’ into a domestic employment boom.