The Ministry of Agriculture reported a significant surge in sunflower oil production, now comprising 52% of the nation’s oil output in 2023/24. (Photo: Courtesy)
Tanzania Hikes Import Taxes to Boost Local Edible Oil Production and Empower Farmers
By Adonis Byemelwa
In a bold strategy to bolster local agriculture, the Tanzanian government is set to hike import taxes on edible oils in the upcoming 2024/25 budget.
Minister of Agriculture, Hussein Bashe, unveiled this decisive move during a high-profile meeting with Chama cha Mapinduzi (CCM) Secretary General, Dr. Emmanuel Nchimbi, in Itaja, Singida on May 31st, 2024.
This pivotal decision aims to protect and empower the nation’s sunflower farmers, ensuring their produce thrives in a competitive market.
Minister Bashe disclosed that he has discussed the matter with the Minister of Finance, Dr. Mwigulu Nchemba, who will present the new budget on June 13, 2024.
“We are going to increase taxes on imported edible oils to protect our sunflower producers,” stated Bashe. This measure is expected to boost the local agricultural sector by providing a more secure market for sunflower farmers.
Minister Bashe announced plans to construct a modern market for onions in Singida and develop a major irrigation project worth over Sh10 billion in the region. These initiatives are part of a broader effort to support local agriculture and improve market access for farmers.
The announcement came after Dr. Nchimbi, who is touring the region to oversee the implementation of the CCM election manifesto and address local concerns, relayed a request from Singida North MP, Ramadhan Ighondo.
Ighondo highlighted the need for a reliable market for local produce, especially for sunflower farmers.
Responding to these concerns, Minister Bashe emphasized the importance of securing land for the market to prevent future disputes.
“I’ve directed that the market area be allocated and titled under Singida Rural District and the municipal council,” Bashe said. Dr. Nchimbi urged that the market be completed before the next general election in 2025, to which Bashe affirmed his commitment.
The Ministry of Agriculture reported significant growth in sunflower oil production, which accounted for 52% of the nation’s oil production in 2023/24, followed by groundnut oil at 27%.
Despite this progress, local production still meets only half of the national demand, necessitating imports to fill the gap.
The ministry’s data shows a remarkable increase in sunflower production, from 425,653.1 tons in the 2021/22 season to 1,132,298.34 tons in 2022/23.
To further boost production, the government has distributed 725 tons of high-quality sunflower seeds through a subsidy program in several regions, including Singida, Dodoma, Manyara, Arusha, Kilimanjaro, Tanga, Ruvuma, Rukwa, Katavi, and Geita.
Agriculture Minister Hussein Bashe. Photo: File
Regarding irrigation, Bashe revealed that over TZS 10 billion has been allocated for the construction of the Msangi Dam, aimed at supporting agriculture independent of rainfall.
“The contractor is already on site, and I assure you, Secretary General and the people of Singida, that the project will be completed on time,” he affirmed.
In response to MP Ighondo’s request for a health center, Dr. Nchimbi directed the Minister of State in the President’s Office for Regional Administration and Local Government to ensure construction begins by August 2024. He committed to inspecting the site to ensure compliance with the party’s directives.
These initiatives reflect the government’s ongoing commitment to enhancing the agricultural sector and improving the livelihoods of farmers across the country. Tanzania imports 320,000 tons of edible oil per year, with an annual demand of 500,000 tons, forcing the country to bridge the gap through imports. This shortfall presents significant opportunities for import substitution, according to the Tanzania Investment Centre’s statistics of 2022.
The edible oils market is poised for growth, with revenue projected to reach $126 billion in 2024 and an annual growth rate of 6.50% expected from 2024 to 2028.
Globally, India leads in revenue generation, but Tanzania is keen on attracting investors to mitigate its substantial import bill, which stands at $294 million.
The country’s demand for edible oil is expected to rise from 500,000 to 700,000 tons by 2030, guaranteeing a growing market for investors.
Tanzania, the second largest producer of sunflower seeds in Africa, primarily sources its edible oil from sunflower, palm, groundnuts, sesame, soybeans, and cotton.
However, the nation is at odds with other East African Community (EAC) members, particularly Kenya, over import duties.
Tanzania has imposed a 35% duty on semi-refined and double-refined edible oil, and a 25% duty on crude palm oil and other crude edible oils, actions that Kenya argues contravene the EAC Common Market protocol.
Tanzania seeks to bolster its edible oil production and reduce dependency on imports, actively courting investors to tap into this burgeoning market. The government promises substantial returns and a secure future for the sector. With the demand for edible oil on the rise, Tanzania stands at the cusp of a transformative era in its agricultural and economic landscape.
