Prime Minister Applauds CRDB Bank's Agricultural Empowerment Initiatives

By: Niels Malangalila | Blog | April 28, 2024 13:03

The Prime Minister of the United Republic of Tanzania, Kassim Majaliwa, has commended CRDB Bank for its efforts in empowering the agriculture, livestock, and fisheries sectors in the country, which contribute to increasing the income of citizens and fostering the nation's economy.

Prime Minister Kassim Majaliwa delivered the congratulations during the opening of a special seminar for CRDB Bank Investment Day held in Dar es Salaam and attended by hundreds of stakeholders in the agriculture sector. During the event, the CEO of CRDB Bank, Abdulmajid Nsekela, urged the government to collaborate with stakeholders to increase support for the agriculture sector in the country.

Nsekela noted that although the amount of loans provided to the agriculture sector is increasing, the number of beneficiaries remains low. Therefore, more efforts are needed to increase investment, which will enhance productivity and increase income for farmers, consequently boosting both the farmers' livelihoods and the nation's economy as a whole. In delivering the congratulations, Prime Minister Kassim Majaliwa stated that CRDB Bank's initiative to convene agricultural stakeholders to discuss available opportunities and devise plans to address the challenges they face aligns with the government's efforts to integrate Tanzanians into the economy.

Explaining the government's strategies, the Prime Minister said deliberate efforts are being made to increase opportunities for citizens to benefit from investment incentives through the Tanzania Investment Centre (TIC), which has reduced the capital requirement for obtaining a (Certificate of Incentives) by half, compared to what foreign investors pay.

"Previously, for a Tanzanian project to obtain a Certificate of Incentives, it was required to have a value of not less than $100,000 (equivalent to 250 million Tanzanian shillings), which we have now reduced by half. Currently, a project with a value of $50,000, equivalent to 125 million Tanzanian shillings, can obtain a Certificate of Incentives from our Investment Centre," said Majaliwa.

The Prime Minister acknowledged the importance of collaborating with the private sector, especially CRDB Bank, which has designated a special day to showcase investment opportunities in the agriculture sector and demonstrate its readiness to provide financial services to facilitate investments in agriculture.

He said the government is prepared to collaborate with the private sector to facilitate investment in the agriculture sector. Additionally, Majaliwa stated that climate change poses significant challenges in modern times, including effects such as droughts, floods, increased temperatures, strong winds, hurricanes, reduced groundwater levels, increased outbreaks of plant and animal diseases, and destructive pests. Consequently, new challenges arise, hindering the efforts of farmers and herders to increase productivity. Thus, the government will lead efforts to ensure the resilience and growth of this crucial sector for the benefit of the nation. "I urge you as you continue with this seminar to think and discuss how more Tanzanians can enter these sectors to increase productivity and efficiency. Consider and discuss how we can all increase the use of skills, inputs, and better technologies that enable sustainable agriculture during this era of climate change. Think about how we can increase cooperation between the government and all agricultural stakeholders," emphasized Majaliwa.

Demonstrating the level of loans provided in the agriculture sector, Nsekela said in 2023, the agriculture sector was loaned $686 million (equivalent to 1.715 trillion Tanzanian shillings), which is more than three times the amount loaned in 2022, $218 million (equivalent to 545 billion shillings). In 2021, the sector was loaned $21 million (equivalent to 52.5 billion shillings), up from $16 million (equivalent to 40 billion shillings) loaned in 2020. "Our agriculture sector is still dominated by many small-scale farmers, accounting for 91%. Out of over 44 million hectares suitable for farming in the country, only 2.5% of that land has irrigation infrastructure. This is a small amount, so we need joint efforts from both the government and the private sector," Nsekela said.

Among the challenges that need to be addressed, Nsekela mentioned the lack of inputs, production that does not meet internationally accepted standards, and a lack of accurate information on crop and commodity markets. Others include a shortage of investment funds, a lack of research information, and a lack of training for farmers. In collaboration with various local and international partners, Nsekela said CRDB Bank has begun to address some of these challenges by designing services and products tailored to the needs of farmers in the country, particularly to meet their credit needs.

"We provide various types of loans ranging from purchasing farming machinery and irrigation equipment to operational costs. Through the warehouse receipt system, we provide up to 80 billion Tanzanian shillings. From small-scale to large-scale farmers, we offer crop insurance, drought or flood insurance, and coverage for climate change-related impacts," Nsekela said. Explaining CRDB Bank's capacity, which has already loaned over 1.6 trillion Tanzanian shillings to finance agricultural projects, Nsekela said they are collaborating with more than 200 partners to strengthen their ability to provide agricultural loans.

"CRDB Bank alone can loan up to $107 million (equivalent to 267.5 billion Tanzanian shillings), but a client coming through the window we share with the Green Climate Fund (GCF) can access up to $250 million (equivalent to 625 billion Tanzanian shillings), and for projects financed by our other partners, the borrowing limit is unlimited for any agricultural project they have," Nsekela said.

The CRDB Bank Investment Day seminar was preceded by an exhibition of products from entrepreneurs in the agriculture, livestock, and farming sectors who are clients of CRDB Bank. These entrepreneurs included sellers and distributors of agricultural inputs, veterinary drugs and vaccines, as well as animal feed and fodder.

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