The Southern Agricultural Corridor

The Southern Corridor links the port of Dar es Salaam at the Indian Ocean to the interior of Tanzania as well as Malawi, Zambia and the Congo. The corridor covers approximately one third of mainland Tanzania and passes through some of the richest agricultural lands in Africa.

It has huge potential to become a sustainable commercial farming sector in the country, serving regional and international markets, in addition to enhancing local food security and economic development. The Blueprint for Investment aims to put more than 350,000 hectares under commercial production, much of it farmed by emergent and smallholder farmers. This increase in agricultural production will ensure food security for Tanzania and the wider region, lifting two million people out of poverty, and bring in annual revenues of an estimated USD 1.4 billion.

The SAGCOT was initiated by Yara in close cooperation with several key stakeholders from the public and private sectors, including the Government of Tanzania. Financing came from the Norwegian government and its development fund Norfund; African Development Bank; World Bank; FAO; ACT; TAP; ProRustica; AdDevCo; InfraCo. These stakeholders established a working group to develop the concept note which will lead to the preparation of an investment blueprint.

The SAGCOT fits well with regional and local policy priorities, including ‘Kilimo Kwanza’ (‘Agriculture First’), a policy initiative of the Tanzania National Business Council (TNBC) supported by the country’s government. Both call for a transformation of smallholders into commercial farmers, including the approach of an agricultural growth corridor involving the development of clusters of commercial farms and agribusinesses in areas with high agricultural potential and access to backbone infrastructure.

The SAGCOT aims to develop three or four clusters of profitable, small-, medium- and large-scale farms and associated agribusinesses in the corridor area. Building on existing operations and planned investments, the clusters will be centered on areas of particularly high agricultural potential. They will include nucleus commercial farms and outgrower schemes, serviced farm blocks, processing and storage facilities, and improved infrastructure to farms and local communities. The partnership points at a number of benefits for the Tanzanian economy but emphasizes that developing the corridor shall benefit smallholder farmers specifically.

Building on Tanzania’s Kilimo Kwanza (“Agriculture First”) strategy, the SAGCOT Investment Blueprint describes how USD 2.4 billion of private investment will be catalyzed over a 20-year period, alongside public sector commitments. The result will be a tripling of the area’s agricultural output. 

The SAGCOT initially focuses on high-potential agricultural land, especially the areas stretching either side of the infrastructure back-bone from Dar es Salaam through Morogoro to Mbeya. The corridor has a varied range of climates and altitudes and a diversity of soil qualities, which allows for a broad scope of crop production, including cereals, horticulture, coffee, tea, potatoes, banana, beans, vegetables and sunflowers, as well as for beef, poultry and dairy operations.

In the Southern Corridor area there is hardly any commercial farming of scale going on. Reasons for the underdevelopment of the agricultural sectors are largely the same as elsewhere in Africa, including poor infrastructure (also resulting in limited access to markets) and lack of access to finance, which are the constraints the partnership has in focus.

The Southern Corridor could deliver benefits to more than two million people and provide opportunities for at least 20,000 smallholders to become fully commercial farmers with internationally competitive yields and a competitive cost structure. It could also create nearly half a million jobs in the agricultural value chain and generate significant tax revenues for the government.