Tanzania, AfDB sign Sh175 billion agreements to finance agricultural inputs project

Dar es Salaam. Tanzania and the African Development Bank (AfDB) yesterday signed concessional loan and grant agreements, amounting to $75.5 million (about Sh174.9 billion) for financing the Tanzania Agricultural Input Support Project.
The Permanent Secretary in the ministry of Finance and planning, Mr Emmanuel Tutuba, said the project will help make food products affordable to the country’s growing population.
“The overall development objective of the project is to improve production, productivity and profitability of priority crops by scaling up delivery of affordable inputs to smallholder farmers in the target areas,” said Mr Tutuba.
Specifically, he expounded, the project aimed at boosting local food production systems to mitigate short- and long-term risks due to the Ukraine–Russia crisis and climate–induced stresses in Tanzania.
 In doing so, he further explained, the project will contribute to the country’s social and economic development through availability and affordability of food in the country, hence reducing malnutrition and hunger.
The implementation of the project will be completed in three years and will involve scaling up food production by ensuring the average use of quality inputs, essentially improved seeds and modern technology.
 It will also up food production through financing fertiliser availability and affordability through a subsidy programme and enabling policy and institutional strengthening that will lead to improved regulatory environment for the rapid uptake of certified seeds and fertilisers.
Tanzania, as many of the Sub-Saharan African countries, depends on importation of some food products from Russia and Ukraine, especially wheat and edible oil.
However, with the ongoing war between the two countries , the country has already started experiencing spill-over effects of the conflict. The unfortunate situation is creating food insecurity in Tanzania and exposing the country to food inflation due to the rapid increase in food prices.
The government under President Samia Suluhu Hassan is taking initiatives within the agricultural sector to ensure food security and stable prices in Tanzania.

One of the initiatives is to undertake research and development on seed multiplication and provision of fertilisers to increase food production.

In addressing this initiative, on May 31, this year, the government requested AfDB to consider financing the research and development of seed multiplication and provision of fertilisers.

The AfDB country manager - Tanzania, Dr Patricia Laverley, said the bank’s board approval of the support in response to the government of Tanzania’s request, happened on July 15 this year.

She said out of the approved $75.5 million in the form of a loan and grant, $73 million was concessional loan and the remaining $2.5 million as a grant.

Dr Laverley said supporting the project in question was part of the bank’s emergency response to the Russia-Ukraine war.
“Just when we thought we had plans in place to cushion the impacts from Covid-19, combined with the effects of climate change, countries across Africa faced new challenges with high prices for fuel and fertilisers, and these continue to adversely affect food security,” she said.

Increases in the cost of edible oil and wheat, said Dr Laverley, will affect all households in Tanzania but hit the poorest severely.

Recent estimates show that the combined food, fuel, and fertiliser shocks will lead to an additional 1.2 million people falling below the poverty line in Tanzania, according to her.