Mkwawa Leaf Tobacco Limited developing tobacco sector and empowering small holder farmers to achieve their dreams

In 1995- 1997 the tobacco industry was under government control from growing, classifying, processing, and marketing. During this period the crop didn’t reach its full potential due to several reasons ranging from financial resources, appropriate human resources, to markets.

Following these challenges the government decided to diversify the sub-sector, marking the entrance into the market of Universal Leaf Inc. a USA-based entity, through international competitive bidding [ICB]. As a result of ICB terms and conditions, Universal was forced to form two entities namely; Tanzania Leaf Tobacco Company Ltd (TLTC) and Tanzania Tobacco Processors Ltd (TTPL).

The main objective of having these two entities was to sustainably increase the crop volume and market diversification. In 1997-2019 The sub-sector started to grow in terms of both crop volume and crop quality reaching a maximum volume of 120,000 tons during the crop season 2010- 2011.

During the same period, as a result of a policy statement that outlawed the export of raw tobacco, the Country witnessed the introduction of the second Agro-processing plant that moved the Country’s installed agro processing capacity from 70,000 mt per season to approximately 140,000 tons.

Growth came with its challenges linked to primarily, sustainability in particular afforestation, poor governance in the grower base, inefficient value chain that had adverse effects to the global demand and supply, multiplication of taxes, Lack of capacity in the regulator.

As a result of these challenges Tanzania lost its place in the global market and the net effect of this downward trend was the exit of major players including Universal leaf and cigarette manufacturers.

Consequently in 2019 – 2022 TLTC stopped buying tobacco from the contracted farmers – 16,000 tons. TTPL was therefore not viable because of TTLC decision to stop entering tobacco-buying contracts with farmers (closure) and other leaf dealers taking a business decision to process tobacco outside TTPL.

This was a major challenge to the sub sector and the Country as 32,000 farmers lost market- direct revenue, indirectly the supply chain. 2318 employees lost their jobs, Cess at 5% farm gate price. City service levy at 3% of the gross turnover lost.

“In April 2022, Mkwawa Leaf Tobacco Limited, a local company, acquired both TTLC and TTPL and renamed the two entities Mkwawa Leaf Tobacco Limited [abbreviated as MLTL] and Mkwawa Tobacco Processors Limited [ abbreviated as MTPL] respectively,” says Mr. Ahmed Huwel, MLTL CEO and Owner.

Mr. Huwel says Mkwawa Leaf Tobacco Limited [MLTL] started buying tobacco in June 2022 redefining what it means to be a responsible and transformative player in the agricultural sector. With a deep-rooted commitment to sustainability, farmer empowerment, and rural development, MLTL continues to serve as a model for inclusive growth and environmental stewardship.

At the core of MLTL’s operations is a farmer-first philosophy. The company works directly with over 27,400 small-holder farmers, providing them with agronomic training, quality seeds, and timely extension services. Through a robust contract farming model, farmers are assured of reliable markets and fair prices ensuring stability, income security, and long-term development in rural communities.

Impact of MLTL to small holder and tobacco sector in Tanzania

Mr. Richard Sinamtwa – MLTL Deputy Managing Director says MLTL armed with a strategic directive from government to grow the crop to 200,000 mt by crop season 2025, drew a plan that had farmer as a center piece to drive growth with the following salient features:

Farmers to receive payments of proceeds with 3 days of sale. This contrasts significantly with cases where farmers had to wait for over 6 months to get paid. Address unconstructed tobacco volumes by removing quotas and diversification of markets into areas where the Country had not sold before

Reduce the tobacco market season to 60 days as opposed to the then 6 months. Uplift the closed tobacco agro processing plant in Morogoro and invest over 30 mil USD to expand the same to a seasonal processing capacity that exceeds 90,000 mt positioning its own fleet of more than 200 trucks to ensure proceeds are moved from market to export in real time.

As result of these initiatives the national crop volumes moved from 60,000 mt in crop year 2022 to 122,000 mt in crop year 2023. “By scaling up production, Mkwawa has created expanded market opportunities for smallholder farmers, resulting in higher incomes, increased household stability, and improved livelihoods. The company’s farmer-centric approach has not only boosted national output but has also enhanced the economic resilience of thousands of rural families who rely on tobacco as a primary source of income,” says Mr. Sinamtwa.

Mkwawa has significantly improved the economic well-being of smallholder tobacco farmers by introducing competitive pricing and restoring the value of tobacco as a profitable crop. Prior to Mkwawa’s entry into the sector, tobacco was often referred to as “makinikia” unconstructed tobacco] due to its low value and poor market performance,” Mr. Sinamtwa says in 2022/2023 the minimum bought price was 0.5$ per kg to 2$/kg. Through price reform 2023/2024 minimum bought price was 2$/Kg, and 2.10 in 2024/2025.

This shift has increased farmers’ incomes, enhanced their dignity, and led to a rise in the number of tobacco growers from 11,000 in 2022 to over 80,000 currently to reflect renewed confidence and economic empowerment at the grassroots level.

As a fore stated by streamlining the market season the sales period from six months to just under two months, there is reduction in farmers bank interests reflected to an approximate 200% increase in return for farmers.

Thereby ensuring faster cash flow and operational efficiency. The transformative change have significantly boosted household incomes and enhancing farmers’ trust in the formal market system, enhanced farmer autonomy improved planning, and increased income potential, while fostering trust, stability, and long-term sustainability in the sector.

The Tobacco sub sector has now become and investment destination with more than 21 traders in Tanzania and market diversification through the reentrance of Phillip Morris’s International [PMI], the UAE, and Serengeti Cigarette Company as part of market diversification.

This has expanded market access for Tanzanian tobacco, ensuring stable demand and competitive pricing. Establishment of jobs for more than 3000 people. This has empowered smallholder farmers by providing them with reliable buyers and better income opportunities, while also reducing market dependency risks.

As a result, the sector has experienced increased resilience, investment, and sustainable growth, driven by broader market confidence and enhanced farmer participation.

The entrance of MLTL into has also led to the strengthening of the sub sector’s governing bodies namely the Tobacco Council of Tanzania regulator and the Tanzania Tobacco Board through increased crop levies.

A stronger regulator ensures better enforcement of contracts, regulations all of which protect smallholder farmers from exploitation. This increased accountability, promotes trust, improves market efficiency, and contributes to the sustainable growth of the tobacco sector.

Further MLTL invested in Infrastructure to match crop growth:

• Warehouse: Warehouse capacity increased by 50,000 square meters upcountry and 28,000 square meters in Morogoro.
• Agro processing: Processing capacity moved from 70,000 tons to 140,000 tons (new line).
• Online buying: 6 seconds per bale associated payments to farmers within 48 hours. The current warehouse capacity for green tobacco and Morogoro factories is sufficient to cope with a national crop at the current rate of classification, smooth flow to the factories by December at peak.

Given the fact that through MLTL, the sub sector is in a growth mode, it has become a necessity to address the way tobacco is bought and on that premises, online buying is the best way forward to avoid long seasons, address capacity– regulator, Crop coloring down, degradation and security.

MLTL projects

School feeding Programme: The School Feeding Program helps reduce child labor during the tobacco harvest by keeping children in school, improving attendance, and academic performance. This not only supports community development but also promotes a more responsible and sustainable tobacco sector by protecting future generations.

Sun-Cured Tobacco: The Suncured project significantly reduces the use of firewood in tobacco curing, helping to conserve the environment while relieving smallholder farmers from the high costs of fuel wood.

This innovation lowers production expenses, increases farmers’ profits, and supports sustainable practices. Additionally, it benefits the wider community by preserving local forests and promoting environmental responsibility, making the tobacco sector more eco-friendly and socially accountable.

CBFM: Community-Based Forest Management (CBFM) provides smallholder tobacco farmers with a sustainable and affordable source of fuel wood for curing tobacco, reducing production costs and improving incomes.

Its environmental benefits boost market confidence and attract eco-conscious buyers, creating better market opportunities. Revenues from CBFM support village development projects, reduce community levies, and enhance rural livelihoods, making it a practical model for empowering farmers and promoting sustainable agriculture.

Upgrading Barn furnaces: This project helps smallholder farmers reduce firewood consumption and operational costs while improving tobacco quality, leading to better prices and higher profits. It supports both farmer incomes and environmental sustainability.

Boreholes drilling: The project is set to drill boreholes in each Primary Societies (PS) under contract with the company, as part of its commitment to improving community infrastructure and farmer welfare. This initiative aims to reduce the burden of water collection, particularly for women and children, while ensuring access to clean and safe water.

The availability of water will not only improve health and sanitation but also support agricultural productivity and livestock management. By addressing this critical need, Mkwawa continues to promote community well-being and contribute to sustainable rural development in tobacco- growing regions.

As Tanzania moves toward achieving its agricultural transformation agenda, MLTL remains a key player and a driver of change. The company continues to collaborate with government institutions, farmer cooperatives, and international partners to scale up impact and ensure that no farmer is left behind.

“Produced in Tanzania, processed in Tanzania for the benefit of the people of the united republic of Tanzania,” Mr. Sinamtwa concludes