DAR ES SALAAM, TANZANIA- Tanzania has recognized the significance of the agricultural sector in terms of potential economic growth and poverty reduction in the country by starting the agricultural bank that boosts agricultural production.
The government has already pledged to finance the Tanzania Agricultural Development Bank (TADB) with $500 million (Sh850 billion) as running capital.
Permanent Secretary to the ministry of Agriculture, Food Security and Co-operatives Sophia Kaduma said the bank will start providing loans to finance agricultural inputs which are vital for increasing production.
“Increased investment in agricultural inputs such as fertilisers, farm implements, warehouses and agro-processing industries are vital for raising production and fighting poverty,” said Ms Kaduma.
Today, approximately 80 percent of Tanzanians are employed by the agriculture sector plays, which accounts for half of the national income and three quarters of the merchandise exports in the country.
“The government also expects the new bank to raise the contribution of agriculture to the Gross Domestic Product. It is our hope that the bank will not only cater for big farmers but also for smallholder farmers in a bid to overcome poverty in the rural areas,” she said.
Smallholder farmers in Tanzania, who are the dominant leaders in the sector as a whole, support average farm sizes of between 0.9 hectares and 3.0 hectares and cultivate 5.1 million hectares annually, of which 85 percent is food crops.
She further explained that the bank has been established to co-ordinate agricultural research programmes on behalf of the government and enhancing collaboration with the Finance ministry for obtaining vital sources of funds that will lead to provision of low cost credit to farmers.
Other roles to be played by the bank include the supervision of development projects in the ministries linked to agriculture such as those of Water, Livestock, Transport, Works and others, learning from other countries that have successfully run similar banks such as Vietnam and China. It will also be expected to prepare public education programme on how Tanzanians can benefit from such bank.
Deputy permanent secretary in the Finance ministry, Prof Adolf Mkenda, said the government had high expectations on the bank, particularly in relation to improving agricultural production in a bid to push forward the agrarian revolution.
Prof Mkenda added that the TADB would be evaluated against the results of whether farmers’ income and the GDP are growing.