TZ secures 354bn/- soft loan
DAR ES SALAAM: THE government yesterday signed a concession loan worth 22.742 billion Japanese Yen (about 354.45bn/-) for the implementation of the agriculture and rural development Two Step Loan project.
The loan will be administered through the Japan International Cooperation Agency (JICA) on behalf of the Government of Japan, while in Tanzania, the project will be managed by the Tanzania Agricultural Development Bank (TADB).
The objective of the project is to support the improvement of financial access and farmer productivity for realising industrialisation and commercialisation by providing two-step loan to farmers and stakeholders through medium and longterm financing to TADB.
During the signing ceremony in Dar es Salaam, the Minister for Finance, Dr Mwigulu Nchemba, said that the project’s implementation would stimulate growth in the agricultural sector by enhancing farmers’ productivity through access to affordable capital.
“This initiative will provide medium and long-term sub-loans to farmers, production groups and agriculture-related enterprises, enabling them to invest in modern farming practices, quality inputs and advanced technologies,” Dr Nchemba said.
He further noted that the increased financial support would promote crop diversification, the adoption of climate-smart agricultural practices and contribute to food security, rural development and overall economic stability.
The minister said that the support is aligned with the current National Five-Year Development Plan, which focuses on boosting competitiveness and industrialisation for human development.
“This plan aims to increase efficiency and productivity by utilising available resources,” he said.
He added: “It also aligns with the Agricultural Sector Development Plan II, which emphasises strengthening and promoting agricultural mechanisation, ensuring food and nutrition security, improving market access and increasing value addition,” Dr Nchemba said.
He noted that the agreement represents a continuation of growing support, as reflected by the increasing number of bilateral development projects funded by the government of Japan through Official Development Assistance.
Dr Nchemba explained that Tanzania has benefited from Japanese support for over 60 years, particularly in sectors such as agriculture, water, health, energy, transportation and education, with a strong focus on capacity building.
Executive Senior VicePresident, Ms Katsura Miyazaki explained that the support aims to improve agricultural productivity and farmers’ incomes by promoting mechanisation within the value chains of key crops.
“The main focus of this Two-Step Loan Project is on four priority crops: rice, maize, wheat and sunflower, which are featured in Tanzania’s Five-Year Development Plan, FYDP III. The project will strengthen value chains and contribute to food security,” said Ms Miyazaki.
She added that the project will also support the horticulture sector, creating employment opportunities for women and youths while fostering financial inclusion.
Ms Miyazaki highlighted that through the promotion of agricultural technology, JICA will contribute to Climate-Smart Agriculture, in alignment with the prioritised policies of the Tanzania Agricultural Development Bank (TADB).
“JICA has been actively supporting FYDP III and the Agricultural Sector Development Programme Phase II and we will continue to collaborate with Tanzania to align with the Tanzania Development Vision 2025,” Ms Miyazaki said.
She added that JICA is ready to move forward with another key financial initiative for agricultural development, the Tanzania Food Systems Resilience Programme (TFSRP), a co-financing project with the World Bank.
TADB Managing Director, Mr Frank Nyabundege said the five-year project is designed to tackle key challenges by facilitating financial intermediary functions related to agricultural and rural development finance.
“Through this partnership, TADB will provide medium and long-term sub-loans to farmer groups, cooperatives, agribusinesses and other beneficiaries nationwide. Our goal is to increase agricultural productivity, enhance value chains, promote rural development, strengthen food security and foster the commercialisation and industrialisation of the agricultural sector,” said Mr Nyabundege.
He also highlighted that the loan interest rate is a favourable single-digit rate of 9 per cent. The project aims at improving agricultural productivity and promote sustainable farming practices across Tanzania, focusing on crops such as maize, rice, wheat, sunflower and horticulture with an emphasis on youths and women.
Maize will be targeted in the regions of Iringa, Njombe, Songwe, Rukwa, Katavi and Ruvuma. He added that rice in Arusha, Kilimanjaro, Manyara and Mbeya while sunflower will be targeted in the Central Corridor and Southern Highlands.
“By focusing on these specific regions and crops, the project will not only enhance productivity but also contribute to sustainable agricultural practices, improve farmers’ livelihoods and strengthen local economies,” he said.
