Agricultural bank to link Tanzanian farmers with Norwegian markets
TADB Managing Director, Japhet Justine revealed this yesterday in Dar es Salaam when he met with chief executive officer (CEO) of the Norwegian Investment Fund for Developing countries (Norfund), Tellef Thorleifsson.
Thorleifsson and his delegation were in the country for four-day working visit. While in the country, the Norfund delegation visited the Kilimanjaro-based avocado farm (Africado), which is part of Norfund investment. The farm was established in 2007 and sells its avocados in the European market.
Tanzania is the fourth largest investment country in Africa for Norfund, whereby the 26 investments are mainly in the energy, financial sector, food and agriculture and amounts to about USD 160 million.
Being a state-owned development finance institution (DFI), TADB established to serve as a catalyst for strategic projects in the agriculture and with a mandate to mobilise capital for innovative financial products.
TADB discussions with Norfund came as an effort to open opportunities for agricultural projects and link farmers with direct market and particular with that of Europe.
During the meeting with Norfund, TADB managing director presented the massive opportunities to invest in the agriculture sector in Tanzania, citing that the country has a total of 44 million hectares of arable land of which only 23 percent is currently in use.
“Limited capital being one of the main reason for under utilisations,” he said. According to him, despite positive growth in financial service in recent years, the 2018 National Financial Inclusion Framework (NFIF) identifies the level of financial exclusion to remain at 27percent, (lower on the production), with the majority of the excluded being rural dwelling people who are mostly smallholder farmers.
Justine further said: “There is a need for technical support for retail and wholesale partner financial institutions to develop appropriate value chain financing strategic plans, define customer centric products that help and matches the famers demand and link smallholders farmers with market.”
He also suggested the need for capacity building implementation agencies and agribusinesses including aggregators and processors in various areas of effective business support, so as to improve their production efficiency, business and financial literacy skills as well as visibility and accessibility to finance.
For his part, Thorleifsson said that they do provide financial instruments, which gives priority to equity investments because equity is the scarcest type of capital in most developing countries.
He said: “Norfund also offers loan to selected companies. And that Norfund is looking for experienced partners who have defined projects and expertise within Norfund's priority regions and business areas.
“Norfund has a long-term investment perspective and supports its investees in their efforts to become sustainable business. And that currently, Norfund support in Tanzania avocado farming project named Africado based in Kilimanjaro, the farm was established in 2017 and sells its produce in European market.”
Norfund is the Norwegian institutions offering risk capital and expertise to help building sustainable businesses in developing countries and thereby contribute to economic and social development.
