Economists urge Tanzania to link agriculture with booming sectors

Dar es Salaam. Economists in Tanzania are urging the government to forge stronger links between rapidly growing sectors like mining and telecommunications and the nation's agricultural sector.

They believe this can unlock agriculture's full potential and drive overall economic development.

Speaking to The Citizen, an economist and lecturer at the University of Dar es Salaam (UDSM), Dr Tobias Swai said that the banking sector holds the key to unlocking the full potential of agriculture in Tanzania.

“At the heart of this potential lies the issue of access to finance, particularly for the multitude of smallholder farmers who form the backbone of our agricultural sector. Many of the farmers face significant barriers in accessing formal financial services, hindering their ability to invest in essential inputs such as seeds, fertilisers, and equipment,” he said.

“Here lies the transformative role of banks: offering tailored credit facilities to smallholder farmers and enabling critical investments for enhanced productivity,” he added.

According to him, by investing strategically in infrastructure like irrigation systems, storage, and transportation, banks can tackle key barriers to productivity and market access.

He said the farmers require capacity-building programmes and advisory services to enhance their financial literacy, management skills, and adoption of modern farming techniques.

“Banks can foster innovation and technology adoption in agriculture by financing research and development initiatives, along with the adoption of advanced technologies like precision agriculture and digital platforms for improved market access and information dissemination,” he added.

Another UDSM economics lecturer, Dr Wilhelm Ngasamiaku, said the linkage of sectors that employ more people in the country, like agriculture, with fast-growing sectors is the best way to fuel economic development.

“Technically, as we mechanise and modernise agriculture over time, it will grow gradually, eventually catching up with the rest of the sectors while its share of employment decreases,” he said.

“At the same time, the share of employment in the services will be growing as well. When this happens, a structural transformation of the economy will have taken place. In so doing, growth will be sustainable with forward and backward linkages,” added Dr Ngasamiaku.

For his part, the executive director of the poverty alleviation research think tank Repoa, Dr Donald Mmari, emphasised the need for coherence in sectoral policies and effective coordination of implementation efforts to bridge the gap between rapidly growing sectors like telecommunications and mining and the labour-intensive agriculture sector, which remains the primary source of livelihood for the majority of Tanzanians.

“By fostering combined effects and linkages between these sectors, we can harness the transformative potential of industrialization and technological advancements to propel agricultural development and enhance overall economic growth,” he said.

Moreover, he said that enhancing the resilience and sustainability of the agricultural sector requires concerted efforts to address key challenges such as access to finance, infrastructure deficits, and capacity constraints.

“By leveraging the financial resources and technical expertise of the banking sector and industrial firms, we can facilitate investments in critical infrastructure projects such as rural roads, storage facilities, and processing plants, which are essential for enhancing market access, reducing post-harvest losses, and improving overall supply chain efficiency,” he said.

However, Mzumbe University’s economist, Dr Daudi Ndaki, said these rapidly growing sectors, such as mining and telecommunications, do not directly intersect with agriculture, except that we need to link them with the agricultural sector in terms of funds.

“They will assist in managing that chain from start to finish,” he said.

He pointed out that the agriculture sector still faces challenges because various programmes implemented in the sector do not consider the entire agricultural value chain, from the farm to the market.

“If these other sectors support the agriculture sector in terms of finance along the agricultural value chain, it will help transform the sector and make it grow at a much faster pace than it currently is,” he shared.

He added: “With finance and consideration for the entire agricultural value chain, there will be certainty of capital for agriculture and also product markets.