The government of Tanzania has outlined its agricultural transformation agenda, detailing its desire to see commercial banks’ lending rate to the sector – which is currently within single-digit levels – dropping further.
The country is set to issue a price stability fund for fertilizer and establish a revolving Fund for agricultural inputs and agricultural development. It further plans to review the National Irrigation Commission structure and make some changes and establish a common use facility for packing, sorting and grading of horticultural products.
President Samia Suluhu Hassan who announced the agenda also directed the treasury’s office to let off land that is at its hand idle and give it to investors for commercial farming. For agriculture to attain a meaningful development, the government also requested development partners to channel their aid into agriculture infrastructure, instead of capacity building.
Single digital interest rate
Speaking during the a handover of 6,700 motorcycles to extension service officers, President Samia urged commercial banks to compete by providing a single digit interest rate on loans to the agriculture sector.
She said single digital interest rate is of paramount importance in making loans cheap and hence shaping the agriculture sector and up its contribution to the economy. Reports have it that the agriculture sector employs over 65% of Tanzanians, contributes 27% to the Gross Domestic Product (GDP), 60% of raw-materials and 25% of foreign currency.
“CRDB Bank is already changing a single digit interest rate to nine percent. I am positive NMB Bank, which is currently charging 10 percent, will follow a suit. Will be more than happy if you go to eight percent,” said President Hassan.
She also directed the ministry of Agriculture to establish a Revolving Fund for agricultural inputs and agricultural development.
“At a time when prices for agricultural inputs shoot due to external shocks, the Revolving Fund will be coming in to cushion farmers,” she said, suggesting that the Fund will be bearing the price burden.
