Posted on July, 24, 2024 at 08:46 am
TWO weeks ago, we had an enriching discussion on the trade agreement between Tanzania and Zambia, where Tanzania is set to sell 650,000 tonnes of maize to Zambia due to a severe food grain shortage caused by drought, which destroyed nearly one million hectares—potentially halving the production.
This deal is advantageous for Tanzania as it could transform the agricultural sector from subsistence to commercial farming—a recurring topic in the sector.
It also aids Zambia by providing a reliable supply of maize at an affordable price. The deal has gained significant attention, with agricultural players who previously showed little interest in maize trading now actively discussing it.
A key lesson from this experience is that vibrant private sector opportunities must be created before implementing structures. Currently, Tanzanian businesses are struggling due to poor cashew nut export performance last year, which saw the lowest export value in a decade.
This was caused by low global prices and increased operational costs from a government directive that limited exporters to the less-maintained Mtwara port.
One trader noted, “No company made any profit from cashew exports last year.” Although it’s unclear if this reflects a comprehensive survey, last year’s export data confirms a challenging period.
The cashew nut industry is a major foreign currency earner for Tanzania, so the maize opportunity from neighbouring countries is seen as a potential boon.
Today’s discussion highlights varied and strong reflections from readers. One trader shared his frustration over being granted only 200 tonnes of maize export permits in June, despite applying for 3,000 tonnes in February 2024.
He expressed doubts about the logistics required to transport 650,000 tonnes, questioning if Tanzania Zambia Railway (TAZARA) could handle it, as it can manage only 100,000 tonnes.
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Another concern was raised by a citizen questioning why the National Food Reserve Agency (NFRA), which is not a business entity, is handling such a large tender instead of the Cereals and Other Produce Board (CPB), which is established for this purpose.
The citizen also questioned NFRA’s capacity to store the required 650,000 tonnes. These concerns fuel skepticism about whether the ministry will fairly allow private companies to export maize to Zambia, given that the same institution controls export permits and NFRA.
Overall, Tanzania’s agriculture sector is undergoing significant changes, and all stakeholders—from farmers to traders to government— must navigate these challenges with thorough study and consultation.
Source: Daily News