Private Sector

Southern Agricultural Growth Corridor of Tanzania (SAGCOT)

Water irrigation systemSAGCOT

Small-scale farmers in Tanzania, as in many other parts of Africa, lack access to modern inputs, are at risk from climate change, and remain locked out of international markets.

 

The Southern Agricultural Growth Corridor of Tanzania (SAGCOT) addresses these issues by linking farmers to modern supply chains and making agriculture a profitable activity in a country where more than 75 percent of the population is engaged in the sector.

 

The SAGCOT promises a transformation in the fortunes of hundreds of thousands of Tanzanian farmers working in the corridor, which boasts rich farmland and infrastructure including roads, rail, power and an international port at Dar es

Salaam. The corridor could feed the East Africa region and become a major agricultural exporter to rival the likes of Brazil.

 

The initiative is supported by a public-private partnership of global agriculture businesses, international development agencies, farmers' groups, and the government of Tanzania.


Promoting profitable agribusiness

Tanzanian President Jakaya Kikwete launched an investment blueprint at the World Economic Forum in Davos, Switzerland, in January 2010, showing how to achieve a green revolution in East Africa by promoting "clusters" of profitable agribusinesses which incorporate small-scale farmers. At the launch, USAID Administrator Rajiv Shah announced a $2 million investment into the corridor's $50 million Catalytic Fund.

 

USAID will dedicate a large portion (50-80 percent) of the overall Feed the Future funding for Tanzania to activities in the corridor. The investment blueprint was developed with support from AgDevCo, a social impact investor, and Prorustica, a consultancy, with support from global corporate partners Unilever, Yara International, Dupont, Stanbic Bank, Monsanto, SABMiller, Diageo, Syngenta, and General Mills. Tanzanian businesses and farmer groups were also involved.

 

The blueprint's main findings and suggestions included:

  • $3.4 billion of public and private sector investment could triple agricultural output over a 20-year period, achieving food security for the region, creating 420,000 jobs and lifting two million people out of poverty
  • Tens of thousands of subsistence farmers would have opportunities to become profitable, commercial farmers in their own right, with access to modern inputs, irrigation and international markets
  • New financing facilities will be established in order to achieve these results, including a $50 million Catalytic Fund—backed by the Tanzanian government and international donors—to provide low-cost capital for start-up agriculture businesses
  • "Early wins" in the corridor include agricultural investments, which could achieve rapid results in terms of increased output and benefits for small-scale farmers and local communities
  • A SAGCOT partnership organization, with a professional Secretariat, will help coordinate and monitor public and private sector investments along the corridor

Global fertilizer company Yara International announced one of the first major investments in the corridor in January 2011 with a $20 million investment into a new fertilizer terminal by the port in Dar es Salaam.

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