EDITORIAL: Magufuli is right, it's time Tanzania Agricultural Development Bank lived up to its name
President John Magufuli at the launch of Phase II of the Agricultural Sector Development Plan (ASDP) in Dar es Salaam recently.PHOTO STATE HOUSE
President John Magufuli’s displeasure at the misuse of funds disbursed to the Tanzania Agricultural Development Bank (TADB) to benefit farmers is understandable.
It is mind-blowing that even after receiving Sh360 billion for farmers’ empowerment and an additional Sh60 billion for the development of the agriculture and livestock sectors, TADB has had little to show for it.
If indeed the financial institution gave Sh95 billion to non-farming borrowers, lent Sh82.3 billion to financial institutions, spent Sh3 billion on treasury bonds and paid 9.2bn to investment banks – as the Head of State revealed this week – then the President’s call for heads at the bank to roll is justified.
For all its good intentions to invest in alternative revenue streams, TADB was created as a state-owned apex national-level development finance institution (DFI) to act as a catalyst for delivery of short, medium and long- term loans for the development of agriculture.
Its decision, therefore, to channel agricultural funds to other activities instead of issuing credit to farmers was misguided and imprudent and failed to live up to the purpose for which it was established.
All the alternative investments that the bank was involved in should have been given prominence after the financial institution had assured the agriculture sector universal access to credit and generated surplus funds for other ventures.
As matters stand currently, Tanzanian farmers have very limited access to credit and continue to face challenges that range from insufficient agro-inputs to a critical shortage in extension services.
For a country seeking to move away from rain-fed agriculture and towards technology-reliant commercial farming, our investment in the sector is still dismal, considering the potential it holds for economic development.
So, as the country embarks on Phase II of the Agricultural Sector Development Plan (ASDP) with a whopping Sh13.8 trillion investment, we hope that stakeholders in the sector will spend funds on projects that are sure to result, not only in food security, but also economic development of the country.
