Nurturing the seeds of prosperity of Tanzania Agriculture in the 2024/25 budget

As Honorable Minister of Agriculture Hussein Bashe concluded his budget proposal speech with, "Honorable Speaker, I would like to make a point.” It was evident the 2024/25 budget aims not only to ensure the long-term sustainability of our agricultural sector, but also to propel Tanzania onto the global stage as a competitive developing country in productivity, research and development, and trade.

The recent reforms in the agriculture sector have resulted in demonstrably increasing productivity in both food and cash crops. The expansion of the agricultural business sector, particularly for globally sought-after commodities has attributed in encouraging development of the sector. These positive trends in the growth of the agriculture sector are a combination of favorable agricultural policies and robust annual budgetary allocations.

An analysis of the Honorable Minister's speech reveals a clear focus on leveraging past experiences to shape a prosperous future. The budget prioritizes strengthening foundational elements, such as agriculture development through project development and national security against shortages and disasters. As evidenced by the challenges faced with sugar access in the year 2023/24 resulting from artificial shortages created by retailers and abrupt adverse changes in climate, consequently, the 2024/25 budget demonstrates a shift towards increased productivity, basic commodity production, and the exploration of high-quality, short-term seeds to mitigate agricultural disasters and challenges. 

In the government's vision towards the year 2050, the agriculture budget has increasingly emphasized its five priorities which are to increase production and productivity, increase in decent jobs and enhancing youth and women participation, to improve food and nutrition security, strengthen access to markets, agriculture financing and crop exports, and strengthen corporate development. This clearly shows that the 2024/25 budget is increasingly nurturing the present by ensuring that it does not reduce its priorities but increases strength in ensuring that we achieve the goals set in the agricultural sector.

To ensure that we continue to sow the seeds of future development, for the first time Tanzania has decided to incorporate technology (Agriculture Digitalization) in agriculture as one of our priorities. The speed of technological growth will require that agricultural growth involves technology. This will help to develop the agricultural sector since digitalization will bring positive changes in agricultural reform and facilitate efficiency in fulfilling our other priorities.

The 2022 population census revealed that 59.5% of Tanzania's 60 million people reside in rural areas, signifying a significant agricultural workforce. This demography positions Tanzania well to achieve its Vision 2050 goals. The continued focus on cooperatives in the 2024/25 budget, particularly through the strengthening of farmer cooperatives, demonstrates the government's commitment to ensuring farmers benefit from their endeavors.

The agricultural sector played a leading role in the 2023/24 budget year, contributing a significant 16.1% to the national income. Building on this success, the 2024/25 budget aims to further strengthen agriculture with a goal of increasing its contribution to 20%. This ambitious target reflects Tanzania's commitment to strengthen it is leading GDP contribution sector. 

The 2024/25 budget prioritizes development, with two-thirds (65.71%) of the requested funds allocated to completing the national development plan. This signifies a strong focus on initiatives that directly benefit the agricultural sector, such as research, access to essential inputs, and various agricultural programs.

Tax reforms are another pillar supporting agricultural growth. Recent changes include revisions to the Food Safety Law to better manage tax breaks for food imports, and adjustments to tax relief for industrialists. Notably, the year 2023/24 the government eliminated VAT on raw materials for essential agricultural inputs like insecticides and acaricides.

The 2024/25 budget marks a significant shift in focus towards agriculture. With an increased allocation exceeding 1.2 trillion shillings (representing a 23.71% increase from the previous year), Tanzania is set for significant agricultural growth. As Mwalimu Julius Nyerere envisioned, "The development of our nation depends heavily on agriculture. We cannot build a strong economy without strengthening our agriculture." The set priorities within the 2024/25 budget have the potential to position Tanzania as a leader in agricultural advancement among developing countries.

Alli Msangi is an Audit Associate with Deloitte Tanzania. The views presented are her own and not necessarily those of Deloitte. He can be reached at amsangi@deloitte.co.tz