Whether for profit or social motives - and often both - an increasing number of investors are targeting opportunities in African agriculture. At the same time innovative approaches for deploying aid to support farming businesses linked to smallholders are emerging. This blog provides a snapshot of who is doing what, where and how.

13 January 2011

Tanzania to become a global player in agriculture: Investment Blueprint launched

Today in Dar es Salaam, Prime Minister Pinda of Tanzania launched the Southern Agricultural Growth Corridor of Tanzania (SAGCOT) Investment Blueprint (see Executive Summary). It promises to make Tanzania internationally competitive in agriculture within a generation, to compete with global players like Brazil.

Later, at the ground-breaking ceremony for a $20 million investment by Yara International in a fertiliser terminal at Dar es Salaam port, President Kikwete said:
"SAGCOT is an initiative which I believe personally is the best model to fast track the green revolution in Tanzania".

Initiated at the World Economic Forum on Africa in May 2010, SAGCOT is an international partnership of global agriculture businesses (e.g. Unilever , Yara International, Diageo, Syngenta, Dupont, Monsanto), development agencies (e.g. USAID, the Alliance for a Green Revolution in Africa, Food and Agriculture Organisation), Tanzanian businessess and the Tanzanian government.

In a foreword to the Blueprint, President Kikwete of Tanzania said:
“Tanzania has immense opportunities for agricultural development….The southern agricultural corridor can be the breadbasket of Tanzania and beyond.”

By catalysing $3.4 billion of socially responsible private investment, the SAGCOT initiative will deliver rapid and sustainable agricultural growth in Tanzania – with major benefits for small-scale farmers and rural communities.

Keith Palmer, Executive Chairman of AgDevCo, a social impact investment company which prepared the report, said:
“Profitable agriculture with strong links to markets is the best route out of poverty for the majority of Africa’s rural poor. As a business-driven initiative with the full backing of the Tanzanian government, SAGCOT can deliver transformational change within a generation”.

The result will be a tripling of the area’s agricultural output, with anticipated benefits including:
• approximately 350,000 hectares brought into profitable production,
• tens of thousands of smallholders becoming commercial farmers, with access to irrigation and weather insurance,
• at least 420,000 new employment opportunities created in the agricultural value chain,
• more than two million people permanently lifted out of poverty, and
• annual farming revenues of $1.2 billion

To achieve these results, new financing facilities will be established including a $50 million catalytic fund, backed by the Tanzanian government and international donors, to provide start-up capital for new agriculture businesses. There will also be a SAGCOT partnership organisation to coordinate public and private sector investments.

At the launch event Prime Minister Pinda said:
"SAGCOT will show the way by demonstrating that smallholder agriculture pays and can be a business...The Tanzanian government will commit resources to the Catalytic Fund".

Pinda urged the country's development partners to incorporate SAGCOT in their country assistance strategies and support the fund.

AgDevCo is a not-for-profit agricultural development company operating in sub-Saharan Africa. AgDevCo is managing a catalytic fund for the Beira Agricultural Growth Corridor in Mozambique, where it has made investments in a number of early-stage agriculture businesses including seed production, mangoes, bananas, honey and livestock.

For media enquiries please contact Keith Palmer, Executive Chairman of AgDevCo, or Chris Isaac, Director for Business Development. Tel: +44 (0)20 7841 2821