Stakeholders decry funding crisis in agriculture sector

Dar es Salaam. Despite the government’s ongoing commitment to agricultural transformation, persistent challenges in budget execution, delayed disbursements, and fund mismanagement continue to undermine progress in the sector, a new review has revealed.

The findings were presented on Friday, May 30, 2025, during a breakfast meeting hosted by Policy Forum in collaboration with the Agriculture Non-State Actors Forum (Ansaf), the Agricultural Council of Tanzania (ACT), and the AMSHA Institute of Rural Entrepreneurship.

Themed “2025/2026 Budget: Investing in Agriculture for the Attainment of Livelihood and Credibility”, the event reviewed government allocations, disbursements and utilisation in the agriculture sector.

Ansaf programme officer Ms Werner Hillary highlighted major funding gaps, citing low disbursement rates in the ministries of Agriculture and Livestock compared to approved budgets.

“As of April 2025, the Ministry of Agriculture had received Sh664.36 billion—only 53.2 percent of its approved budget. Of this, Sh568.06 billion was allocated to development projects, while Sh96.3 billion went to recurrent expenditure,” she said.

Meanwhile, the Ministry of Livestock and Fisheries had received just Sh131.96 billion—equivalent to 28.7 percent of its budget. By February 2025, only 23.2 percent of the ministry’s recurrent and development budget had been released, according to her.

This, she said, was despite enjoying significant budgetary growth in the last seven years from Sh318.78 billion (2019/20), Sh296.66 billion (2020/21), Sh462.36 billion (2021/22), and Sh1.02 trillion (2022/23).

The agriculture and livestock sectors collectively received a remarkable budgetary growth in the last three fiscal years, growing from Sh1.267 trillion (2023/24), Sh1.709 trillion (2024/25), and Sh1.72 trillion (2025/26).

Ms Hillary said delays in disbursing funds to the two sectors had significantly affected project implementation, often causing setbacks or leaving key interventions incomplete.

Reviewing the flow of credit to the agriculture sector over the past decade (2013–2023), she noted that financial institutions had consistently underfunded the sector, despite its central role in the economy.

In 2023, banks issued a total of Sh33.2 trillion in loans, of which only Sh3.3 trillion—equivalent to 10 percent—was allocated to agriculture.

Key contributors included the Tanzania Agricultural Development Bank (TADB), which disbursed Sh138.1 billion, CRDB Bank (Sh1.41 trillion), and NMB Bank (Sh1.7 trillion).

Ms Hillary said the share of credit to agriculture has fluctuated over the years—from 8.7 percent in 2013 to a peak of 12.3 percent in 2018—before dropping to 8.9 percent in 2019 and further to 7.4 percent in 2021. The share later rebounded to 10.6 percent in 2023.

Project mismanagement and accountability gaps

Citing the 2022/23 financial year, Ms Hillary noted serious flaws in project execution.

For instance, the National Food Reserve Agency (NFRA) paid Sh315.8 million to an engineer who neither reported to the project sites in Songea and Shinyanga nor delivered the contracted work.

In addition, the NFRA incurred rental costs amounting to Sh1.26 billion due to delays in silo construction, which slashed its grain storage capacity by 64.7 percent.

She said in the 2021/22 fiscal year, 27 local government authorities (LGAs) failed to spend Sh19.79 billion in development funds due to delays in disbursement and approval processes. The unutilised funds remained idle into the first quarter of 2022/23, exacerbating delays and exposing projects to cost inflation.

Furthermore, seven LGAs—Shinyanga, Bahi, Kilolo, Mpimbwe, Nsimbo, Sikonge, and Makete—returned a total of Sh832.59 million to the Treasury, funds that were not reallocated during the 2022/23 budget year.

Budget non-compliance

Ms Hillary said regional secretariats and LGAs continue to struggle with adherence to budget guidelines and national planning directives.

In 2022/23, 25 councils diverted Sh7.73 billion to routine and non-priority activities.

Notably, Mwanza, Dodoma, Sumbawanga, and Mpimbwe reallocated Sh4.88 billion without approval from council meetings or the Minister for Finance.

Moreover, 79 councils failed to meet mandatory development spending thresholds, resulting in a cumulative shortfall of Sh17.6 billion. Budget guidelines require councils collecting over Sh5 billion in internal revenue to allocate at least 60 percent to development, while councils collecting below that threshold must allocate 40 percent.

Planning directives also mandate that 20 percent of crop levy revenue be invested in agricultural development.

Additionally, 15 percent of revenue from livestock products and five percent from fisheries are supposed to be reinvested in their respective sectors.

Fertiliser subsidies and legislative gaps

Ms Hillary also outlined government efforts to support farmers through input subsidies.

She said over the past three years, more than 1.45 million tonnes of fertiliser worth Sh708.6 billion were subsidised across all crop types.

The Tanzania Fertiliser Regulatory Authority (TFRA) and the Tanzania Fertiliser Company (TFC) were key implementers of the scheme.

She also recalled that in 2022, the Parliamentary Standing Committee on Industry, Trade, Agriculture and Livestock proposed amendments to the Local Government Finance Act (1982) to mandate that councils allocate at least 20 percent of crop levy revenues to agricultural development. “The aim was to institutionalise consistent and adequate funding for strategic crop production and sectoral growth,” she said.

What stakeholders say

The discussant, AMSHA executive director Mr Omary Mwaimu, commended the government’s commitment to the agriculture sector, citing it as a clear indication of political will. He noted that the budget had grown substantially from Sh294 billion in the 2021/22 financial year to Sh1.2 trillion projected for 2025/26—an increase of more than 300 percent.

Mr Mwaimu said African Union (AU) think-tanks, through frameworks such as Agenda 2063, the 2014 Malabo Declaration, and the January 2025 Kampala Declaration on the Comprehensive African Agricultural Development Programme (CAADP), had urged African governments to allocate at least 10 percent of their national budgets to agriculture.

“This level of investment is expected to boost the sector’s growth to at least six percent annually, which would play a major role in reducing poverty and driving the expansion of other sectors such as industry, logistics, and trade,” he said.

He emphasised that robust sectoral growth would have a multiplier effect across the economy.

Currently, Mr Mwaimu noted, agriculture accounts for only four to five percent of Tanzania’s national budget—well below the targets set by continental agreements.

“The concepts endorsed by AU think-tanks must be fully implemented to realise the intended outcomes,” he said.

“The government should honour its commitments to ensure meaningful transformation. At present, agriculture is growing at just four percent—insufficient for the country to fully harness its potential,” he added.

He underscored the need for greater budgetary investment to accelerate sectoral performance and deliver on both national and continental development goals.

Meanwhile, another stakeholder, Mr Galos Ntukunzwe, called for more strategic investment focused on enhancing productivity.

“Dodoma and Dar es Salaam should not be prioritised in the allocation of development projects, as they are not production hubs. Resources should be directed to high-potential production areas to improve the sector’s overall efficiency,” he said.