Why Tanzania’s agricultural revolution depends on PPPs

Academics and students gathered for a public lecture themed: “The Role of Public-Private Partnerships in Agricultural Transformation.”

Delivering the keynote address, the PPPC executive director, Mr David Kafulila, provided a sobering look at fiscal limitations.

He argued that PPPs are the essential engine for agricultural transformation because traditional government funding has reached its practical limits.

He noted that Tanzania’s tax-to-GDP ratio has averaged 12 percent over 25 years, lower than the 15 percent Sub-Saharan average.

“If Tanzania had matched the regional tax average over the last 25 years, it would have collected an additional $40 billion in revenue,” Mr Kafulila calculated.

He explained that with global debt rising, the state must seek long-term marriages with the private sector.

“Because the nation cannot build its future solely on taxes and loans, it must look towards Public-Private Partnerships to execute its development agenda,” he told the audience.

Mr Kafulila framed these partnerships as a prerequisite for Vision 2050, which seeks to build a trillion-dollar economy and join 21 nations globally. He said achieving this requires increasing power generation from 5,000 to 70,000 megawatts.

However, he cautioned that this vision depends on human productivity, noting Tanzania’s human capital index stands at just 40 percent, meaning a child born today will only be 40 percent as productive as they could be with optimal health and education.

A central pillar of this transformation is the five-million-hectare irrigation dream, with Mr Kafulila noting that while the nation currently irrigates 800,000 hectares, the government aims for five million by 2030.

“Achieving this goal requires an investment of roughly Sh10 trillion per year for irrigation alone, a sum that far exceeds the entire annual agricultural budget,” revealed Mr Kafulila.

He provided a holistic view of the sector, defining it as a broad entity encompassing crop production, livestock, and fisheries.

He noted that the sector acts as the primary engine of the Tanzanian economy, providing 60 percent of national employment and contributing 25 percent of the gross domestic product (GDP).

“Within the framework of five year development Plan (FYDP IV), the broad agricultural sector requires a staggering investment of Sh47.9 trillion, which represents 10 percent of the total plan’s budget,” he said.

He stressed that the government expects at least 40 percent of this funding to originate from the private sector through Public-Private Partnerships.

In the realm of fisheries, he highlighted significant state interventions, notably the construction of the new, modern fish port in Kilwa.

“This multi-billion shilling facility, valued at over Sh270 billion, is recognised as the largest and most advanced fishing port in the East and Central African region,” he said. For livestock, he identified opportunities to revitalise aging infrastructure, such as communal dip tanks, and advocated for a national culture of milk consumption to drive demand.

Beyond capital, Mr Kafulila emphasised that PPPs provide vital managerial efficiency.

He cited Harvard research suggesting that a high-quality chief executive officer can contribute 39 percent of a company’s profit.

Using an anecdote of a specialist who charged a high fee simply to know which button to press on a broken ship engine, he illustrated that the public sector should recruit top-tier talent.

The PPPC chief also detailed the necessary shift from subsistence farming to modernised out-grower models.

He explained that modernisation involves moving labour into industrial sectors while linking smallholder farmers to large investors.

“In these out-grower schemes, smallholder farmers are linked to large investors who provide training, inputs, and a guaranteed market,” said Mr Kafulila.

He noted that FYDP IV dictates that 70 percent of its execution must come from the private sector.

In response to challenges, he confirmed that modernisation involves moving from subsistence to large-scale plantations, where working for a large entity is more productive than individual farming. Earlier, Prof Amandus Muhairwa, representing the Vice Chancellor, remarked that agricultural development is a central investment priority for productivity.

He highlighted China’s reforms as a primary example of how a rural economy could transform through strategic investments.

“SUA remains committed to implementing FYDP IV by translating knowledge into bankable opportunities,” he reaffirmed.

During the interactive session, extension officer Samuel Daha raised concerns about the mindset of free services, while student Juma Hemed inquired about the national strategy.

Student Irene asked if PPPs support labour shifts, while Mariam Masele questioned partner selection criteria to ensure value for money.