Dar es Salaam. A new study funded by the Bank of Tanzania (BoT) has called for urgent reforms to unlock the potential of Tanzania’s horticulture industry, warning that despite impressive growth in recent years, the sector continues to be held back by structural, logistical and regulatory challenges.
The working paper, titled Horticulture Exports in Tanzania: A Review on Possible Influencing Factors, shows that horticulture has become one of the fastest growing subsectors of agriculture, with an average annual growth rate of 4.9 percent between 2011 and 2019. By 2020, horticulture accounted for 33.5 percent of all agricultural exports and employed about 4.5 million people.
Yet, despite these achievements, about 90 percent of Tanzania’s horticultural produce is still consumed locally, leaving significant untapped potential in regional and global markets.
The study highlights that horticultural exports have shown upward growth since 2014, with vegetables accounting for nearly three-quarters of export earnings, followed by flowers at 13 percent. Fruits, despite being widely grown across the country, contribute relatively little to export income.
However, the gains have been marked by volatility, largely driven by unpredictable production and fluctuating prices. According to the report, heavy reliance on rain-fed farming exposes smallholder farmers to weather shocks, while post-harvest losses—estimated at 40 percent of production—are double those of peer countries like Ghana.
“Exporters are constrained by multiple challenges, including low-quality seeds, pests and diseases, poor storage and packaging, high transport costs, and limited access to long-term credit,” the study states.
It further notes that most exporters rely on foreign agents to access overseas markets, a system that locks them into pre-arranged contracts and limits diversification.
Bottlenecks unveiled
The BoT-funded review identifies a range of domestic factors that continue to impede export competitiveness. These include scarcity of land in traditional horticultural hubs such as Arusha and Kilimanjaro, uncoordinated local markets, and weak contract farming arrangements.
Contract farming, which could help farmers secure markets and inputs, is practised by less than 10 percent of players in the subsector. This leaves smallholders vulnerable to price shocks and market exclusion.
Meanwhile, inadequate value addition remains a key weakness. Although some companies process avocado oil, spices, or dried fruits, the bulk of Tanzania’s horticultural produce is still exported raw. The report argues that investment in processing would not only preserve products for lean seasons but also increase their market value.
On quality standards, the paper observes that while Tanzanian products are considered competitive domestically, exporters still struggle to meet strict international certification requirements such as HACCP and ISO.
The absence of local certification bodies, coupled with the high cost of foreign compliance audits, is said to discourage small players.
The lack of reliable cold-chain logistics is flagged as a critical barrier to horticultural exports. At present, Julius Nyerere International Airport (JNIA) and Kilimanjaro International Airport (KIA) have limited cold storage facilities that are either inadequate or outdated.
Songwe Airport, which was intended to serve the Southern Highlands, lacks a cargo terminal, while the new cold room at Mwanza Airport has failed to meet international standards.
“Exporters often have to rely on Kenya’s facilities, which increases costs and dilutes the ‘Made in Tanzania’ brand,” the report warns.
The government’s acquisition of a cargo plane was welcomed as a positive step, but researchers stress that more investment is needed to scale up cargo flights, expand pack houses at exit ports, and speed up cargo clearance procedures.
Although the government has introduced several reforms, including reducing crop cess from five to three percent and exempting agricultural inputs from VAT, the study says taxation remains unpredictable and fragmented.
Producers cited withholding taxes on inputs, high corporate tax rates, and multiple local government levies as constraints that undermine competitiveness. Some stakeholders proposed preferential tax treatment for agribusiness start-ups, as well as harmonisation of fees across local authorities.
Lessons from peers
The study draws lessons from Kenya, Ghana and Ethiopia, which have made significant progress in horticultural exports. Kenya, for instance, earned over $1 billion from the sector in 2022 by leveraging foreign direct investment, modern irrigation, and year-round production.
Ghana has halved its post-harvest losses through better storage, while Ethiopia has invested heavily in flower production for export.
“These examples demonstrate the importance of modern technology, foreign investment, and robust infrastructure in driving horticulture exports,” the report notes.
The authors argue that Tanzania could achieve similar results if it addressed long-standing weaknesses in its horticulture value chain.
They emphasise the need to reduce dependence on rain-fed agriculture, strengthen linkages between producers and international markets, and improve transport and logistics systems.
Equally, better branding and certification could help Tanzanian products capture premium markets abroad, while a more predictable tax regime would attract new investment into the industry.
The report suggests that stronger institutional support, including the role of embassies in trade promotion, would be vital in enabling exporters to diversify away from traditional markets and expand into emerging ones.
Overall, the study concludes that horticulture is well placed to become a leading foreign exchange earner for Tanzania if the barriers are addressed.
Beyond boosting export revenues, growth in the sector would create jobs, enhance rural incomes, and contribute to the government’s broader industrialisation agenda.
“With the right policies, the sector can help narrow the current account deficit, improve rural livelihoods, and position Tanzania as a regional leader in agribusiness,” the report affirms.
Experts react
Tanzania Horticultural Association (Taha) chief executive officer, Ms Jacqueline Mkindi, said the sector is among the fastest-growing in the country and is rapidly expanding its export base.
“The focus now is on opening new international and regional markets by ensuring exporters understand global trends and participate in trade fairs,” she said, citing a planned product exhibition in Hong Kong this September.
She added that Taha is working to improve quality standards, certification, transportation and farmer training, while also collaborating with government and technology providers to ensure access to modern inputs.
“This industry holds enormous potential. We are seeing more women and youth engaging in regional markets. Our aim is to keep learning, growing, and gaining valuable experience,” she said.
Agricultural trade economist Dr Lutengano Mwinuka of the University of Dodoma noted that the sector remains diverse, with exports fluctuating according to demand. He said new processing industries are boosting value addition, citing avocado oil and green beans for hotels as examples.
“While a fall in exports may reduce foreign exchange earnings, stronger local sales still benefit farmers as money stays within the economy. Meeting local demand through value addition may explain the current drop in exports,” he said.
Dr Mwinuka added that crops such as avocados are now taking the lead in exports, while flowers have declined. “The potential is still significant if we explore new markets and invest more in value chains,” he said.
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