#1Tanzania Country Presentation for HIH Investment Forum FL FAT PANIS Food and Agriculture Organization of the United Nations bbt Building a Better Tomorrow Hand-in-Hand Initiative Investment Forum 17-20 October 2023#2100 30000 म HB 1 Overview CONTENTS 2 Enabling environment 3 Investment plan and opportunities#3SECTION 1: Tanzania: Overview#4Tanzania: overview • • AFRICA MAP TANZANIA Country area: 947,303 sq. km Cropland approx.: 44.62% of land area Cropland under cultivation: 24% Population: 61,741,120 Agriculture, forestry and fisheries together make up to 26.6% of GDP FIAT PANIS Food and Agriculture Organization of the United Nations Hand-in-Hand Initiative Climate: tropical climate with hot humid coastal plain; semi-arid central plateau; high rainfall lake regions; and temperate highland areas. Natural resources: rivers, lakes, ocean, forests/woodlands, wildlife, minerals including natural gas. >70% of population living in rural areas with direct access to arable land for agricultural production. Most practice subsistence farming with transition potential to commercial farming. In almost all regions there are poverty incidences; with potentially unexploited areas for agriculture. After plateauing between 2001 and 2007, in 2018 the poverty rate fell from 34.4 to 26.4 percent.#5Reasons to attract Investments • Increasing access to commercial infrastructure • • Roads Communications • Marketing infrastructure • Processing infrastructure • Post-harvest handling and storage technologies • Agricultural machinery • FIAT PANIS Food and Agriculture Organization of the United Nations Hand-in-Hand Initiative Support new policies implementation • E.g; East Africa Community Protocol on Sanitary and Phytosanitary - Standards adherence - Information dissemination and access - Awareness to traders and producers . Transitioning from Subsistence Farming to Commercial Farming . • • Moving from seed retention to quality seed purchase Increasing access to extension services Increasing access to irrigation services Increasing access to technology and mechanization Improving Internal Trade Networks . . • Transitioning from informal trading to formal (increasing tax base) Improving links to commercial infrastructure-logistical support Digital Markets and Cashless Payments . Financial Services Access-(Credits and Insurance) CFTA CONTINENTAL FREE TRADE AREA Towards One African Market#6Ease of doing business in Tanzania Doing Business 2020 - Tanzania Sub-Saharan Africa DB RANK Ease of Doing Business in Tanzania Region Income Category Low income Population 56.318,348 City Covered Dar es Salaam Ranking on Doing Business topics - Tanzania 162 149 85 146 105 165 182 DB SCORE 54.5 141 71 M Starting a Business Dealing with Construction Getting Electricity Registering Property Getting Credit Protecting Minority Investors Paying Taxes Trading across Borders Enforcing Contracts Source: The world bank PANIS Food and Agriculture Organization of the United Nations Hand-in-Hand Initiative 116 Resolving Insolvency - - - Improvements since 2020 Government has prioritized investments in transportation, energy, and water supply. Government has introduced measures to improve tax administration and combat tax evasion. - Relatively open investment regime with various incentives for foreign investors. Progress in land registration and titling systems. Reforms underway to improve judicial system efficiency and combat corruption. Bank of Tanzania reforms to promote credit to agriculture and the private sector.#7| Crop Sub-sector Typologies Tanzania typologies PC crops pala KENYA Kigal RWANDA Lake Victorias Ge URUN Lake ganyika Katavi anco Mw Songwe Shinyang Codom Nairobi Himar Morogor Mbey's Classes (tercile) Critical with moderate agricultural opportunities Medium priority with moderate agricultural opportunities Low priority High priority Medium priority with high agricultural opportunities Low priority with high agricultural opportunities High performance Huwma PANIS Food and Agriculture Organization of the United Nations Hand-in-Hand Initiative Typology Classes Poverty Potential Efficiency Critical with moderate agricultural opportunities High Moderate Any Medium priority with moderate agricultural Medium Moderate Any opportunities Kassa Pemba Low priority Moderate Moderate Any Tanga Kusnemba Medium / Medium / ska Unguja Husingja High priority High High Moderate Des-teigam Medium priority with high agricultural opportunities Medium / Medium / Medium High Moderate Medium / Medium / Low priority with high agricultural opportunities Moderate High Moderate Landi Medium / High performance Moderate High High 150 300 Km MALAWI Produced by United Nations Geospatial#8A Dedicated Geo-Spatial Portal for Tanzania https://data.apps.fao.org/tanzania/ AT PANIS Food and Agriculture Organization of the United Nations Hand-in-Hand Initiative Transportation Rail networks Road Connectivity Mobile phone substcription, 60-85 % by 2018 Optic fiber connectivity Compare agricultural efficiency vs potential Soil workability maps A tale we lationi Me trattats M.IT 204 B NA No or slight limitations Moderate limitations Sever limitations Very severe limitations. Mainly non-soil Permafrost area Water bodies#9SECTION 2: ENABLING ENVIRONMENT Policy and governance factors Economic factors#10Enabling environment: Investment Policies and Regulations Land Tenure and Property Rights Political Stability and Legal Framework Access to Finance and Investment Incentives Agricultural Sector Investments PANIS Food and Agriculture Organization of the United Nations Hand-in-Hand Initiative Clear and transparent foreign investment policies that provide protection for foreign investors and ensure fair treatment. • Well-defined procedures for establishing and registering foreign-owned agribusinesses. Secure land tenure systems that allow for long-term leases for foreign investors. Transparent and efficient land acquisition processes with safeguards against land disputes. Stable political environment that minimize investment risks. Strong legal framework to enforce contracts and resolve disputes, including access to international arbitration. Availability of financing options for foreign investors, including access to local and international financing sources. Investment incentives such as tax breaks, duty exemptions, and grants specifically targeted at foreign agricultural investors. • Drilling of 67,850 irrigation wells, each for 16 farmers and free provision of irrigation kit for 2.5 acres targeting a total of 2,714,000 acres. Program for strengthening extension services • Government's subsidy program on increased access and use of fertilizers#11Enabling Environment: Economic Factor/Market Bukavu Rwanda Butar Burundi Mwanza Kigoma Tabora Razuramimba Kalemie ashi Mansa Kasama Chinsal Migori Nairobi Kitui Karaf Arusha Tanga Malind mbasa 0 ar Tanzania Main Ports Morogoro Dar es Salaam Ruaha National Park beya Lindh Songea Masa Mtwara Tunduna Mzuzu Migssh National PANIS Market Access and Trade Agreements . Food and Agriculture Organization of the United Nations Hand-in-Hand Initiative Access to domestic and international markets through trade agreements and partnerships. Favorable trade policies that support the export of agricultural products. Infrastructure and Logistics • Adequate transportation networks, including roads, ports, and railways, to facilitate the movement of agricultural products. Reliable energy supply to support agricultural processing and value addition. Incentives to Investors 100% capital allowance on plant and machinery equipment used solely in Agriculture. 50% Capital allowances in the first year of use for Plant and Machinery. All exports are zero rated under the VAT law. Ten percent (10%) - Import Duty for Semi-processed/semi-finished goods). Duty free movement of goods among the members of the East African Customs Union. Zero percent (0%) Import Duty on Project Capital Goods, Raw Materials and Replacement Parts for Agriculture, Animal Husbandry and Fishing. For more on tax incentives granted for investments access 3 TRA TANZANIA REVENUE AUTHORITY Tanzania Revenue Authority - Tax incentives (tra.go.tz)#12SECTION 3: INVESTMENT PLAN & OPPORTUNITIES Overview of investment programme and opportunities Thematic entry points and ASDP II programme components Possible investment areas and locations Summary of Investment proposals#13Section 3: Investment plan & opportunities FIAT PANIS Food and Agriculture Organization of the United Nations Hand-in-Hand Initiative ASDP II Objective Transform the agricultural sector towards higher productivity, commercialization level and smallholder farmer income for improved livelihood, food security and nutrition. Component 1: Sustainable Water and Land Use Management Objective - Expanded sustainable water and land use management for crops, livestock and fisheries https://asdp.kilimo.go.tz/ Component 2: Enhanced Agricultural productivity and Profitability Objective - Increased productivity growth rate for commercial market- oriented agriculture for priority commodities Component 3: Commercialization and Value Addition Objective - Improved & expanded rural marketing and value addition promoted by a thriving competitive private sector and effective farmer organizations Objective 4: Sector Enablers, Coordination and M&E Objective - Strengthened institutions, enablers and coordination framework 10-year Development Budget: Approx. USD 1.4 billion Hand-in-Hand Initiative Contributes Government Contributes#14Food and Agriculture Organization of the United Nations Dakar 2: Food and Agriculture Delivery Compact Wheat: aims to reduce importation and increase food security with current import bill of about USD 221 million/annum. Edible oils – sunflower and soybean: attain production target of 3 million tons by 2025, from which 1 million tons can be processed and sold locally and in export markets. Irrigation: attain target to increase the area under irrigation from the current 727,280.6 ha to 1.2 million ha by 2025. Quality inputs (Certified seeds): scale up the production and delivery of certified seeds from 1,058 MT to 200,000 MT within five years. Value addition, agro-processing, logistics and storage: accelerate implementation. of Agro-Industrialization Development Flagship programme. Hand-in-Hand Initiative African Union DAKAR 2 TANZANIA COUNTRY FOOD AND AGRICULTURE DELIVERY COMPACT#15Climate-Smart Sunflower Investment Why Sunflower? Unavailability of high-quality seeds. Unaffordability of high-quality seeds by farmers. Inadequate storage facilities for year-round production of processing facilities. Inadequate processing facilities for high quality Sunflower products. Sunflower investments enhance rural livelihoods by creating job opportunities for youth and women in rural areas. Investment Pillars Investment (USD) NPV (USD) IRR (%) Seed multiplication: Storage facilities: 1,083,618.49 56,185.92 9.27% 5,443,307.69 440,248.30 10.11% Refinery facilities: 45,553,388.63 3,605,977.54 10.08% Value Chain Support Irrigation technologies: Village and Farmer Support Extension services: Government of URT Government of URT TOTAL REQUIRED INVESTMENT: USD $52.08m • Impacts Create sustainable income sources for Sunflower farmers and supply chain stakeholders (per capital $ 1,070 USD). Reducing annual Sunflower oil imports and availability in local market. Reduce import dependence. Increase full time and part time jobs creation to women and youth (17,790 jobs). Climate-Smart production and processing widely used (including renewable energy). • FIAT PANIS Food and Agriculture Organization of the United Nations Hand-in-Hand Initiative Market High national demand for edible oil and Sunflower. Sunflower oil is among the high substitute agricultural commodity imported in Tanzania annually. Competitive local pricing for Sunflower oil with high demand attributed to its nutritional value. Investment locations Honiara (Manyara region and nearby regions including at the Capital city of Dodoma). • Risk and Mitigation Risk: Weather variation and climate change impact. Mitigation: Investment in irrigation and water use efficient technologies. Risk: Limited access and affordability of high-quality seed. Mitigation: Contract farming to ensure consistent availability at affordable price. Risk: Inadequate extension services to producers Mitigation: Extension service provision to identified producers.#16Climate-Smart Soybean Investment Why Soybean? • • Unavailability of high-quality seeds. Limited access to extension services for increased productivity and profitability. Inadequate processing facilities for value addition and increased income. Boosts employment and income, especially for women and youth. Impacts Increase per capita income to 2180 rural households to 755 USD from 380 USD. • Soybean based livestock and fish feed innovation and value addition • • • Investment Pillars Seed multiplication Investment (USD) 2,677,208.23 NPV (USD) IRR (%) 64,321.31 8.57% Extension services 848,974.37 61,016.32 9.93% Processing facilities 3,846,615.37 116,544.42 10.39% Value Chain Support Access to agricultural inputs: Quality seeds and inoculants Government of URT Access to agricultural implements: Portable agricultural machinery for planting and fertilizer application and harvesting • Government of URT TOTAL REQUIRED INVESTMENT: USD $7.37m . Increase income by converting Soybean into higher value-added products. Social economic and environmental benefits Ensured food and nutrition security through increased access and affordability of Soybean and its products. Increase accessibility and affordability of livestock and fish feed. Climate-Smart production and processing widely used (including renewable energy). FIAT PANIS Food and Agriculture Organization of the United Nations Hand-in-Hand Initiative Market Domestic Market High local demand of variety of Soybean based foods and household goods produced and sold in local market at affordable competitive price. Soybean based livestock and fish feed is sold locally at affordable price to livestock, fish and poultry farmers. International Market Tap on external market for Soybean raw material including China, India and other Asian countries. Secure regional market share for Soybean as raw material for animal and fish feed production. • Risk and mitigation Risk: Availability and affordability of quality seeds. Mitigation: Contract farming to ensure seed quality standard and affordability. Risk: High transportation cost from production area to major cities. Mitigation: Capitalizing on economies of scale and use of railway for transportation. Risk: Competitive market price from other regional producers. Mitigation: Investment on good extension service for reduced production cost.#17Climate-Smart Wheat Investment Why Wheat? • • Unavailability of high-quality seeds. Inadequate storage facilities for year-round production of processing facilities. Inadequate processing facilities for value addition and increased income. Wheat production can contribute to rural development by creating employment opportunities for local communities. Investment Pillars · Investment (USD) NPV (USD) IRR (%) Seed multiplication 3,776,666.65 269,964.81 9.75% Storage facilities 1,555,230.80 125,785.23 10.11% Processing facilities 10,271,743.61 863,386.46 10.20% · Value Chain Support precision agriculture practices. Government of URT Access to agricultural inputs and technologies: Quality seeds, fertilizer and Access to agricultural implements: Portable agricultural machinery for planting and fertilizer application and harvesting Government of URT TOTAL REQUIRED INVESTMENT: USD $15.60m Impact Increase per capita income for 3,455 rural households to 359 USD from 260 USD. Increase number of Wheat processing and storage facilities. • Increase income by • converting wheat into higher value-added wheat products. Ensured food and nutrition security. Climate-Smart production and processing widely used (including renewable energy). FIAT PANIS Food and Agriculture Organization of the United Nations Hand-in-Hand Initiative Market Domestic Market Increased availability and affordability of Wheat as a source of food in rural areas. Increase availability and affordability of high-quality wheat seed for local producers. International Market Expert export of wheat produced to regional and neighbouring countries. Risk and mitigation Risk: Weather and climate change challenges. Mitigation: Adoption of precision agricultural technologies and irrigation. Risk: Higher production cost associated to land renting and agricultural input. Mitigation: Practicing contract farming. Risk: Market price fluctuation and volatility. Mitigation: Minimizing production cost through economies of scale.#18THE UNITED REPUBLIC OF TANZANIA MINISTRY OF AGRICULTURE BUILDING A BETTER TOMORROW: YOUTH INITIATIVE FOR AGRIBUSINESS (BBT-YIA) 2022-2030 Food and Agriculture Organization of the United Nations Hand-in-Hand Initiative Launched by the President H.E. Samia Suluhu Hassan President of the United Republic of Tanzania during the AFRICA FOOD SYSTEMS FORUM September 2023 To promote youth engagement in agribusiness Towards improved and sustainable livelihoods for themselves and others. Targeting • • 1.6 million youth (50% women) 12,000 profitable enterprises, 12,000 villages.#19Empty#20bbt Project cost description Building a better Tomorrow PANIS Food and Agriculture Organization of the United Nations Hand-in-Hand Initiative Block farm development is the primary investment vehicle of the BBT A block farm is essentially an out-grower model with agro-processing unit, road infrastructures, electricity and irrigation facilities in a 10 acre/4-hectare block. Block Farming land availability - 550 000 hectares - cereals and horticulture - 391 000 hectares livestock Youth in block farm receives 5 acres/2 hectares for crop development 1.5 acres/0.6 hectares for large stock - beef and dairy 1.5 acres/0.6 hectares for small stock - lamb, sheep, poultry and other livestock. Development Costs US$ 5,000/acre or /0.4 hectares of a block farmland. US$ 250/hectare of a non- block farmland. USD 500/hectare for off-farm (fisheries development, geoprocessing, logistics) activities outside block farmland.#21bbt Key Investments Building a better Tomorrow Youth Initiative for Agribusiness CROPS VALUE CHAIN US$1.6 billion Food and Agriculture Organization of the United Nations Hand-in-Hand Initiative PANIS BBT-YIA PROGRAMME US$2.5 billion LIVESTOCK VALUE CHAIN US$56 million FISHERIES VALUE CHAIN US$198 million WHEAT HORTICULTURE RICE AND PADDY DAIRY RED MEAT POULTRY AQUACULTURE capture fisheries Financial Returns Horticulture Cereals and Oil Seeds Livestock Value Chain IRR NPV - US$ Value Chain IRR NPV - US$ Value Chain IRR NPV - US$ Cucumber 11% 384 Cattle Multiplier 11% 852 Wheat 8% 299 Cabbage 10% 168 Sheep Multiplier Farms 18% 8,634 Sunflower 10% 149 Pepper 10% 146 Poultry 54% 915 Green Pepper 10% 447 Soyabean 9% 123 Carrot 14% 940 Maize 6% 1 Watermelon 12% 109 Sorghum 12% 112 Onion 9% 857 Tomato 7% 196#22Why investing in obbt? Investment Pillars building a better Tonorow Building a Better Tomorrow Investment Program More than 70% of population (thus majority of youth) live in rural areas. FIAT PANIS Food and Agriculture Organization of the United Nations Hand-in-Hand Initiative Investment (USD) NPV (USD) IRR (%) 2.5 billion 1.2 billion 14% го 0 Agribusiness has high potential of creating more jobs than other sectors. There is still plenty of unutilized arable land (i.e. more than 75% of 44 million hectares). The demand of food is high because of rising population. Youth in agribusiness strategy is also expected to transform agriculture to achieve food security as youth are more willing to apply new technologies than adults. JOIN THE BBT SYSTEM! JOIN US NOW TOTAL REQUIRED INVESTMENT: USD $2.5 billion with 14% EIRR for over 20 years#23Tanzania investment plan SUMMARY US$ 3.9 Billion Govt. Budget to 2030 (BBT + ASDP II) US$ 1.925 Billion Total Investment Required 8.57% to 93% Overall Average IRR KEY INVESTMENTS FIAT PANIS Food and Agriculture Organization of the United Nations Hand-in-Hand Initiative 11,898,868 Direct Beneficiaries US$ 359 to 1,070 Income Increase Per Capita 0.928 tCO2-eq/ha Emission Reduction Potential in 20 years Intervention 4 Building Better Tomorrow Cost (USD) US$ 1.85 Billion Intervention Sunflower Value Chain 1 Intervention Soybean Value Chain Intervention 2 Wheat Value Chain 3 Cost (USD) Cost (USD) Cost (USD) US$ 52.08 M US$ 7.37 M US$ 15.60 M IRR (%) IRR (%) IRR (%) EIRR (%) 9.27% to 10.11% 8.57% to 10.39% 9.75% to 10.20% 14% NPV NPV NPV 4 bbt Building a better Tomorrow US$ 4.10 M Direct beneficiaries: 261,769 Indirect beneficiaries: 3,926,535 indirect Income increase per capita: US$ 1,070 Potential Emission reduction per ha: 0.076 tCO2-eq/ha over 20 years NPV US$ 0.24 M Direct beneficiaries: 25,450 Indirect beneficiaries: 269,770 Income increase per capita: US$ 755 Emission reduction per ha: 0.26 tCO2- eq/ha over 20 years US$ 1.26 M Direct beneficiaries: 11,649 Indirect beneficiaries: 126,974 Income increase per capita: US$ 359 Emission reduction per ha: 0.59 tCO2- eq/ha over 20 years US$ 1.2 Billion Direct beneficiaries: 1.6 million Indirect beneficiaries: 10 million Emission reduction tCO2-e/yr: - 5,663,597 over 20 years