Tanzania Country Commercial Guide
Learn about the market conditions, opportunities, regulations, and business conditions in tanzania, prepared by at U.S. Embassies worldwide by Commerce Department, State Department and other U.S. agencies’ professionals
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Agriculture and Agricultural Processing
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Overview

Agriculture remains a cornerstone of Tanzania’s economy, contributing approximately 27 percent to the country’s Gross Domestic Product (GDP) and employing nearly 75 percent of the workforce. The sector plays a crucial role in food security and exports, with recent government initiatives focusing on modernization, digitalization, infrastructure development, and financing to enhance productivity and market access. Tanzania’s economy recorded 5.1 percent real GDP growth in the 2023/24 fiscal year, with agriculture being a key contributor. 

Despite abundant business opportunities across domestic, regional, and international markets, agricultural productivity has remained modest, with limited progress over the past two decades. The sector is largely composed of smallholder farmers reliant on rain-fed irrigation, facing challenges such as declining export revenues, land acquisition hurdles, limited access to advanced farming technologies, inadequate storage facilities, restricted market integration, and financing constraints.

To address sectoral challenges, Tanzania is implementing the Agricultural Sector Development Programme Phase II (ASDP II) (2017/18–2027/28), designed to modernize agriculture, boost productivity, enhance commercialization, and support smallholder farmers.

Technological Advancements and Future Prospects

Tanzania is increasingly integrating modern agricultural technologies into maize production to overcome challenges related to low yields, climate variability, and pest outbreaks. Notable innovations include:

  • Precision agriculture, which leverages GPS mapping, soil analysis sensors, and automated irrigation systems to enhance efficiency.
  • Mechanization initiatives, expanding access to tractors, mechanical harvesters, and automated planting systems to optimize productivity.
  • Smart fertilizer application methods, such as fertigation systems and controlled-release fertilizers, improving nutrient absorption and soil health.
  • Pest and disease management technologies, including biological pest control methods and AI-driven monitoring solutions, deployed to counter threats such as fall armyworm infestations.
  • Post-harvest storage innovations, such as hermetic grain storage bags and solar-powered drying systems, aimed at reducing crop losses and preserving maize quality.
  • Digital trading platforms, which facilitate connections between farmers and buyers while improving price transparency and market access.

Trade Dynamics

Tanzania remains highly dependent on wheat imports, with FY 2025/26 imports projected to rise by 15.4 percent to 1.5 million MT to meet growing demand. The country primarily sources wheat from Russia, the United States, and Ukraine. While U.S. wheat is recognized for its high quality, elevated shipping costs reduce its competitiveness relative to other suppliers. Russia remains the dominant exporter, consistently supplying more than half of Tanzania’s wheat imports.

Sugar

The Government of Tanzania has set a target to achieve sugar self-sufficiency by 2027, with plans to increase production beyond 800,000 MT, allowing for export opportunities.

Investment Opportunities in Tanzania’s Sugar Industry

Tanzania presents significant investment potential in the sugar sector, particularly in:

  • Expansion of Sugarcane Cultivation: The government is encouraging large-scale farming to meet growing demand.
  • Development of New Processing Facilities: Several factories, including Bagamoyo Sugar and Mkulazi II, are undergoing capacity expansion.
  • Infrastructure Development: Investments in modern irrigation systems and transport logistics are needed to improve efficiency.
  • Technology and Mechanization: Adoption of advanced processing techniques to enhance productivity and reduce costs.
  • Export Market Development: With projected surplus production by 2027, Tanzania aims to enter regional and international markets.

Leading Sub-Sectors in Tanzania’s Agricultural and Agro-Processing Industry

Consumer-Oriented Agricultural Products in Tanzania

Tanzanians allocate approximately 20 percent of their income to consumer-packaged goods, with food products accounting for the largest portion. Personal care essentials and beverages remain the most sought-after categories, with purchasing decisions primarily influenced by recommendations, affordability, availability, and familiarity. The food service sector, which includes hotels, restaurants, and institutional catering, has attracted U.S. investment, leading to the establishment of international franchises such as Pizza Hut, KFC, and Subway in Tanzania’s largest urban centers.However, the expansion of consumer-ready food imports has faced challenges due to Tanzania’s strict liability clause on genetically engineered (GE) food products. Additionally, the government’s poultry import ban, implemented in 2005, continues to restrict international trade within the sector.

Investment Opportunities in Agro-Processing

Investment in agro-processing industries presents significant opportunities for value addition and quality improvement. Key areas include:

1.    Fruit and Vegetable Processing

  • Tanzania produces 2.75 million metric tons of fruits and vegetables annually, yet only 4 percent is processed.
  • Investment potential exists in commercial farming equipment and processing facilities for both domestic and export markets.

2.    Cashew Nut Processing

  • Tanzania produces 120,000 metric tons of cashews annually, yet only 10 percent is processed domestically.
  • Opportunities exist in rehabilitating unused processing plants or establishing medium-scale processing facilities.

3.    Oilseed Processing

  • Investment potential exists in oil pressing and refining equipment for sunflower, sesame, groundnuts, and palm oil.

4.    Textile and Apparel Industry

  • Tanzania produces large quantities of cotton, yet only 20 percent is processed locally.
  • Investment opportunities include fully integrated textile mills, cotton ginning plants, yarn and fabric production, and cut, make, and trim units.

5.    Leather Industry

  • Tanzania has a large livestock population (17.7 million cattle, 12.5 million goats, and 3.5 million sheep), producing 2.6 million raw hides and skins annually.
  • Only 10 percent of hides and skins are processed domestically, presenting investment opportunities in modern tanneries and leather finishing units.

6.  Meat and Dairy Processing

  • Tanzania’s large livestock population supports meat processing, packaging, and dairy production.
  • Investment opportunities include meat processing plants, dairy product manufacturing facilities, and cattle ranches.

Investment Opportunities in Chemical Industries

Tanzania has high demand for fertilizers and pesticides, creating opportunities for chemical manufacturing investments. Investors can establish operations within Special Economic Zones (SEZs) under SEZ User Licenses or SEZ Export User Licenses, benefiting from tax incentives and trade advantages.

Challenges in Agricultural Investment

Despite strong investment potential, several challenges persist:

  • Complex and bureaucratic land acquisition processes for foreign investors.
  • Sporadic bans on exports and imports, affecting market stability.
  • Limited access to agricultural financing, with high interest rates restricting growth.
  • Cooperative unions, crop boards, and minimum pricing policies hindering free-market competition.
  • Low productivity among smallholder farmers, due to reliance on manual labor and outdated farming techniques.

Machinery and Equipment in High Demand

Food processing investments rely on imported machinery and technologies. The following equipment categories are in high demand:

  • Fruit concentrate and juice production.
  • Cashew nut processing machinery.
  • Specialty coffee processing equipment.
  • Sugarcane processing technology for sugar factories.
  • Fish processing and packaging equipment for export markets.
  • Meat processing and packaging facilities for cattle and game meat.
  • Dairy product manufacturing, including milk powder, infant formula, butter, margarine, ice cream, yogurt, and cheese.
  • Horticultural packaging solutions, including cut flowers and fresh vegetables.
  • Quality storage technologies for agricultural products.
  • Irrigation pivots and mechanized farming equipment.
  • Tractors and mechanization tools for large-scale farming.

For more information on the agriculture sector opportunities in Tanzania, please visit the Foreign Agriculture Service at: https://www.fas.usda.gov/regions/tanzania

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