On January 14, 2025, Tanzania secured a concessional loan of JPY 22.742 billion (approximately TZS 354.45 billion) from the Government of Japan to support the Agricultural and Rural Development Two-Step Loan Project.
The agreement, signed between Tanzania and Japan through the Japan International Cooperation Agency (JICA) in Dar esSalaam, is a significant step in transforming the country’s agricultural sector, which remains a cornerstone of its economy.
The loan will provide medium and long-term sub-loans to farmers, production groups, and agribusinesses, enabling them to access affordable capital for modern farming techniques, high-quality inputs, and advanced technologies.
The primary objective of the loan is to increase agricultural productivity, promote crop diversification, and encourage climate-smart farming practices while driving rural economic growth. This initiative aligns closely with Tanzania’s broader development goals, particularly the National Five-Year Development Plan and the Agricultural Sector Development Plan II.
These frameworks stress the importance of mechanization, food security, market access, and value addition, all of which the project is designed to support.
“Given that agriculture remains the backbone of Tanzania’s economy, the project will help address challenges such as low yields, outdated farming practices, and limited market access,” stated Finance Minister Dr. Mwigulu Lameck Nchemba Madelu during the signing ceremony.
By improving farmers’ access to financing, the loan is expected to enhance agricultural productivity and equip farmers with the necessary tools to modernize their practices.
This is crucial for the country, where the agricultural sector employs a large portion of the population.
The loan also presents significant social benefits, especially for women and youth in rural areas. By prioritizing these groups, the project aims to foster job creation and financial inclusion.
“This project will empower women and youth by facilitating access to financing and creating sustainable jobs within the agricultural value chain,” Minister Nchemba added.
This aspect of the project could be transformative for rural communities, where economic opportunities are often limited.
The expected result is a more inclusive rural economy and a shift toward modern, sustainable farming practices that can withstand the growing effects of climate change.
Japan’s ongoing support of Tanzania, which spans over 60 years, is built on a partnership that has extended across multiple sectors, including water, health, education, and transportation. This new loan agreement demonstrates Japan’s continued commitment to fostering Tanzania’s economic development.
“We are confident that this initiative will not only increase agricultural productivity but also improve the livelihoods of Tanzanians by ensuring greater access to modern agricultural technologies and practices,” said Ms. Katsura Miyazaki, JICA’s Executive Senior Vice President.
The loan builds on previous successful projects, including the Tanzania Agricultural Inputs Support Project, signed in April 2023.
It complements other initiatives, such as the upcoming “Tanzania Food Systems Resilience Program,” which will be launched in collaboration with the World Bank.
As Japan prepares for TICAD 9 in August 2025, these projects signal strengthened ties between the two nations and highlight their shared commitment to promoting sustainable and inclusive growth.
“This collaboration exemplifies the long-standing friendship and shared vision between Japan and Tanzania,” Ms. Miyazaki said.
By working together, the two countries hope to address the challenges that have long hindered the agricultural sector while laying the groundwork for sustainable, long-term growth.
This financial partnership represents more than just a loan—it is a strategic investment in Tanzania’s future.
By enabling farmers to modernize their practices, improve yields, and diversify crops, the project addresses immediate challenges while contributing to the broader goal of long-term, sustainable economic development.
The project’s success will depend on effective implementation, but if it delivers on its promise, it could serve as a model for other nations in the region. With Japan’s continued support, Tanzania is poised to emerge as a leader in agricultural transformation in East Africa.