Agriculture is the backbone of the Tanzanian economy, providing about 26.7% of its GDP and employing approximately 67% of the workforce. However, over recent years, numerous significant challenges have hindered this, mainly due to the effects of climate change. Climate variability, such as erratic rains, rising temperatures, and degraded soils, has already adversely affected productivity. Nevertheless, agricultural innovation brings hope for building resilience and assuring long-term sustainability.

The World Bank report once again highlighted that agricultural productivity in Tanzania is threatened by natural stressors like land degradation, water shortage, and insect attacks—exacerbated by climate change events. Tanzania’s only hope of overcoming these challenges is to embrace innovative solutions that make its agriculture resilient to climate variations and sustainable in the long run. In return, investors have an avenue through which they might provide finances for projects that could change the agricultural landscape, improve productivity, and thus contribute to positive social and environmental impacts.

Climate change is already impacting Tanzania’s agricultural sector. For example, rainfall is increasingly unpredictable, increasing droughts and floods and reducing crop yields. According to the Ministry of Agriculture, maize production in Tanzania decreased by 14% in 2021 due to droughts, among other reasons, including the lack of proper irrigation systems. Unpredictable weather patterns affect staple crops like maize and high-value exports such as coffee and tea.

There is also the issue of rising temperatures, which are raising evapotranspiration and lowering soil moisture levels. This is stressing crops and further making them susceptible to infestation and disease. A good example includes the coffee borer beetle, whose populations, favored by higher temperatures, have risen significantly in most regions of Tanzania where coffee is grown, reducing yields quickly.

The future of agriculture in Tanzania will be driven by the adoption of innovations that would reduce vulnerability to climate change and improve the sustainability of agriculture. Several critical areas of innovation with significant investment opportunities include the following:

• Climate-Smart Agriculture (CSA)

Climate-smart agriculture is a farming practice that raises productivity while at the same time reducing greenhouse gas emissions and enhancing resilience to climate change. The practices of CSA will include:

Drought-tolerant crops: Breeding and disseminating drought-tolerant crop varieties is among the most effective ways to enhance resilience in water-scarce regions. For example, IITA has developed improved drought-tolerant varieties of maize with a specific curbing effect on rainfall deficit periods.

Agroforestry: Incorporating trees into farmland reduces soil erosion, improves the soil’s water retention capability, and maintains a microclimate for crops. Agroforestry also plays a role in carbon sequestration, hence offsetting climate change.

Conservation Agriculture: This approach aims to minimize soil disturbance, maintain cover, and use crop rotation to increase soil fertility and decrease erosion. According to the Food and Agriculture Organization, Conservation Agriculture has contributed up to a 50 percent increase in yields in some areas of Tanzania.

• Water-Efficient Irrigation Systems

With drought a regular occurrence in Tanzania, better water management will have significant and far-reaching consequences for productivity—traditional irrigation methods waste water due to inefficiency. Indeed, modern irrigation systems that use less water, such as drip irrigation combined with solar-powered irrigation pumps, can dramatically reduce water usage while increasing crop yields.

An example of this innovation space is the Tanzania Horticultural Association, which introduced small-holder farmers in the Kilimanjaro region to solar-powered drip irrigation systems. Such technologies guarantee transformative impact; for example, vegetable yields have increased by 30%. 

• Digital Agriculture and Data-Driven Farming: Technology is increasingly helping farmers become more climate resilient. Mobile applications can also help them make better decisions, reduce risks, and deliver weather forecasts, market prices, and crop management advice.

For example, M-Farm is an online platform that offers Tanzanian farmers real-time market prices and a line of contact with buyers, displacing intermediaries and increasing profitability. Similarly, other platforms, such as FarmDrive, use machine learning and satellite data to extend credit scoring to smallholder farmers, allowing them to access much-needed finance for climate-smart investments.

The ICRAF has been working in Tanzania to promote agroforestry practices among farmers to help them adapt to climate change. Planting trees and crops helps reduce soil erosion and improves water retention, maintaining productivity in a changing climate. Tree integration has raised living standards by increasing farmers’ income sources, such as timber and fruits.

Improving climate resilience while creating economic opportunities, work by ICRAF in Tanzania stands out as an excellent example of agroforestry at work. Investors interested in sustainable agriculture should link with organizations like ICRAF to scale these solutions.

Smart Agriculture with Kilimo Trust—Kilimo Trust is a regional agricultural development organization promoting climate-smart agriculture in East Africa, including Tanzania. Through its programs, Kilimo Trust aims to strengthen farmers’ capacities to adopt climate-smart practices like conservation agriculture and irrigation using minimal water.

Tanzania, for example, has successfully trained more than 10,000 farmers in climate-smart practices, increasing crop productivity by about 25%. It has also facilitated partnerships between farmers and markets to ensure that smallholder farmers can sell their produce at reasonable prices.

While there are great opportunities within Tanzania’s agricultural sector, investors face key challenges. These include:

Limited access to finance: Most smallholder farmers lack access to credit facilities at reasonable interest rates, which limits their ability to make needed investments in climate-smart technologies. Investors can help by offering innovative finance, including microfinance, impact investment, and blended finance models.

Market volatility: Changes in international commodity prices may be unfavorable to Tanzanian farmers, especially those dependent on export crops. However, these risks can be hedged through diversification into high-value crops like organic produce or niche markets.

By addressing these challenges through targeted investments, investors can realize the full potential of Tanzania’s agricultural sector and help drive its long-term sustainability.

Since climate change affects their country the most, Tanzania’s agricultural sector is at a crossroads. Investing in climate-smart farming practices, water-efficient irrigation techniques, and digital technologies will drive productivity and resilience as the country’s food security grows for better economic development.

Organizations like the World Agroforestry Centre and Kilimo Trust have already proven that innovative solutions work to build climate resilience. Scaling those models and addressing identified challenges in access to finance and infrastructure will position Tanzania as a leader in sustainable agriculture. Tanzania presents a compelling case in agriculture for investors seeking financial and social returns. Because of its commitment to innovation, strategic location, and growing demand for more sustainable food, Tanzania is well-positioned for investment in climate-resilient agriculture.