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ADF's Trade & Investment Program in Tanzania
 Commercial agriculture is a primary source of foreign exchange for most African countries and a keystone for Africa’s economic growth in the 21st century. This is especially true for Tanzania, where agriculture accounts for better than half of the country’s gross domestic product and 85 percent of exports. Agriculture is also the primary source of income for 80 percent of the country’s 37 million citizens.
Lacking oil or substantial mineral resources, the growth of Tanzania’s economy has long been driven by exports of high-value spices and specialty foods like tea and coffee. But until recently, family farmers and small producer groups earned few benefits from global exchange. During the 19th century, Tanzania’s clove plantations operated with slave labor, and the growth of Tanzania’s tea and coffee concessions under German and British colonial rule was fueled by regressive taxation imposed on rural families and by low wages for farm workers.
After independence, the government of Tanzania sought to deliver better opportunities to rural citizens by nationalizing the country’s privately owned plantations and channeling their revenues into new social programs and smallholder schemes. But strict price controls forced many farmers to abandon commercial farming, and declining earnings prevented the state from investing in key inputs like fertilizer, irrigation, and pest-resistant hybrids. As a result, the productivity of the country’s smallholder sector crashed in the 1980s.
Over the past decade, however, Tanzania has revitalized its agricultural sector, and the country now enjoys east Africa’s fastest economic growth rate. Recognizing the need for new investment, the government lifted commodity price controls in the 1990s and sold majority shares in most state-owned farms and processing plants to international buyers. A stream of foreign direct investment followed that rejuvenated commercial tea and coffee production, produced thousands of new jobs in commercial farming and agro-processing, and provided tens of thousands of small farmers with new opportunities to sell produce at a profit.
ADF Support for Trade and Investment in Tanzania
The focus of the African Development Foundation’s (ADF) trade and investment program in Tanzania is to work with small- and medium-sized Tanzanian-owned businesses and provide them with resources for the development and international sale of high-quality, valued-added products. ADF funding also helps independent producer associations, smallholder farmers, and outgrower farmers enhance the quality and quantity of their production, capture additional profits through value-added processing, negotiate better prices with regional and international buyers, and build profitable connections to the global economy.
ADF provides producer associations and farmer groups with direct access to capital that finances revolving loan funds, helps small farmers buy essential agricultural inputs, and helps producer associations purchase transportation to ensure the delivery of product to processors at its peak value. Foundation funds also purchase technical assistance for essential training in business management, accounting, and price negotiation. The ultimate goal of each ADF project is to support the growth of African-owned enterprises that have well-designed plans for achieving profitability and can deliver significant and sustainable economic benefits to low-income participants.
ADF's work in Tanzania is assisted by an independent partner organization, the Centre for Sustainable Development Initiatives. CSDI is led by highly qualified professionals who are citizens of Tanzania and possess decades of on-the-ground experience in developing, supporting, and evaluating successful projects on behalf of ADF and other funders. CSDI's mission is to help implement effective strategies for reducing poverty and promoting sustainable economic and social development across Tanzania.
In This Issue
The May 2005 issue of ADF e-news offers profiles of six new ADF trade and investment grants in Tanzania and features an interview with David Robinson, son of legendary Hall of Fame second basemen Jackie Robinson. In the 1980s, Mr. Robinson settled in Tanzania and started a commercial coffee farm in partnership with local families. Today, he serves as business officer for the Mshikamano Farmers Group (MFG), an independent association of 300 Tanzanian coffee producers who sell their Arabica harvest to American distributors under the Sweet Unity Farms brand. MFG recently received $210,000 from ADF to purchase new pulping and fermentation equipment and finance a revolving loan fund for its members. Mr. Robinson spoke with ADF e-news in March about his life’s work in Africa, his efforts to expand economic opportunity for Tanzanian farmers, and what African farming groups must do to build direct trading partnerships with American buyers.
For more information on ADF's work in 15 African countries, go to www.adf.gov.
[PRINTER FRIENDLY VERSION]
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