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National Investment Profile Water for Agriculture and Energy -Final Draft NATIONAL INVESTMENT PROFILE WATER FOR AGRICULTURE AND ENERGY -FINAL DRAFT- TANZANIA National Investment Profile. Water for Agriculture and Energy: Tanzania EXECUTIVE SUMMARY Tanzania’s vision for using water resources for agriculture and energy are firmly embedded in both irrigation and hydropower development policies respectively. These issues are both part of the Tanzania poverty eradication agenda in line with the Tanzania Development Vision 2025 and the five year National Strategy for Growth and Reduction of Poverty, commonly known as MKUKUTA I (2005-2010) and MKUKUTA II (2010-2015) which is currently underway. The key policies which are followed for agriculture and hydropower are further supported by the Continental movement towards Africa’s Green revolution. Tanzania has signed the Comprehensive Agriculture Development Programme (CAADP) compact and has initiated a number of programs and reforms to increase the investment in the agricultural sector. These programs have a strong emphasis on irrigation. Despite a total irrigation development potential in Tanzania of 29.4 million ha, only 450 392 ha have been irrigated thus demonstrating the need to develop the sector. Furthermore, irrigation practices in Tanzania show low water use efficiency, low water productivity and over dependency on surface water as a major source for irrigation development. The increased investment via the CAADP Compact should be able to support the development of the sector. Hydropower in the country contributes almost 50 percent of the energy produced. On a large scale, hydropower is being developed as a combined hydro-thermal system. On a smaller scale, hydropower is used as a source of renewable energy and a way to increase rural electrification. Frameworks have been developed to encourage the development of small hydropower power plants. To translate those goals into reality, Tanzania is currently implementing and planning to implement a number of irrigation and hydropower projects for a total of US$1 303 million, where US$106.26 million are allocated to the development of small scale irrigation systems, US$183 million to the rehabilitation and modernization of irrigation schemes, US$50 million to large scale irrigation development, US$2.26 million to the rehabilitation of hydropower plants and US$952 million to the development of large scale hydropower (Table 3). There is a total of almost US$10 million dedicated to the category Others, which in the case of Tanzania mainly refers to topographic studies, environmental impact assessments and other studies to conduct prior to project implementation. These figures show that the country is supporting small holders by placing more emphasis in investing in small scale irrigation as opposed to large scale irrigation. When looking into hydropower project the opposite trend is observed, since Tanzania is only investing in large scale projects. Investment figures also show a balance between irrigation development and rehabilitation. The financial analysis of projects highlighted that investment is mostly executed by public sources and that the country has a short term standpoint for irrigation projects, since investment in the long term is not planned. It would be important for the country to ensure that the institutional and political environment is adequate for the success of these investments. In addition to this, it is recommended that mechanisms are put in place to encourage the participation of the private sector in developing water resources and to support project formulation in the longer term. 2 National Investment Profile. Water for Agriculture and Energy: Tanzania TABLE OF CONTENTS EXECUTIVE SUMMARY .................................................................................................................... 2 TABLE OF CONTENTS....................................................................................................................... 3 1. CONTEXT ................................................................................................................................. 4 1.1 AGRICULTURE AND FOOD SECURITY ................................................................................ 4 Agriculture .............................................................................................................................. 4 Irrigation and Water Control .................................................................................................. 4 Food security ........................................................................................................................... 5 Food self sufficiency ................................................................................................................ 6 1.2 WATER RESOURCES AND HYDROPOWER ........................................................................ 7 1.3 CLIMATE CHANGE ............................................................................................................ 9 2 NATIONAL STRATEGIES FOR WATER, AGRICULTURE AND ENERGY ....................................... 9 3 INVESTMENT ENVELOPE ....................................................................................................... 13 4 PROJECT PORTFOLIO AND THE AGRICULTURE AND FOOD SECURITY INVESTMENT PLAN .. 19 5 CONCLUSIONS ....................................................................................................................... 20 ANNEX 1. PROJECT PORTFOLIO .................................................................................................... 21 TABLE 1.1. ON-GOING PROJECTS .............................................................................................. 21 Table 1.2. PIPELINE PROJECTS .................................................................................................. 28 ANNEX 2. MAP OF TANZANIA ....................................................................................................... 40 REFERENCES .................................................................................................................................. 41 3 National Investment Profile. Water for Agriculture and Energy: Tanzania 1. CONTEXT 1.1 AGRICULTURE AND FOOD SECURITY Agriculture The overall agriculture sector comprises of crops, livestock, fisheries, forestry and hunting sub sectors however the focus of this report will be on crop production. Tanzania is endowed with about 44 million hectares of land suitable for agricultural production, which represents almost half of the country’s area (94.5 million ha). Of the total cultivable land, about 10.8 million hectares (equivalent to 24 percent), is under crop production (Tanzania National Website 2013). The Tanzanian economy is highly dependent on agriculture, contributing to 27 percent of the GDP, with crop production alone contributing to about 17.6 percent (MAFC 2013). The sector continues to be fundamental to the country’s economic development. From 2011 to 2012, growth in the agriculture sector increased from 3.6 percent (2011) and 4.3 percent (2012) (Ministry of Finance, 2012). The sector employs over 75 percent to the working population (Tanzania National Website, 2013). Farmers in Tanzania can be placed in three categories: 1. Small-scale subsistence crop producers: They compromise more than 90 percent of the farming population cultivating between 0.2 and 2 hectares. 2. Medium-scale farmers (also known as commercial farming). 3. Large-scale farmers (also known as commercial farming). The major staples include maize, sorghum, millet, rice, wheat, pulses (mainly beans), cassava, potatoes, bananas and plantains. Maize production dominates much of the country, particularly the highlands in north and south. The tropical coastal belt is dominated by cassava, with rice also grown in an area spreading westwards from Dar es Salaam. Drought resistant millet and sorghum are grown in the central plateau where temperature and rainfall are highly variable, although aside from these arid plains, rainfall is fairly well spread throughout the year, peaking between March and May, with another, shorter rainy season between November and early January. Additionally, Tanzania's farmers grow a huge variety of fruit, vegetable and spice crops (Ministry of Finance 2009). Irrigation and Water Control Tanzania’s National Irrigation Master Plan (URT 2002) identifies a total irrigation development potential in Tanzania of 29.4 million ha. Of this total area, 2.3 million ha are classified as high potential, 4.8 million ha as medium potential and 22.3 million ha as low potential. FAO’s AQUASTAT provides a more conservative figure of 2.1 million ha derived from an early 4 National Investment Profile. Water for Agriculture and Energy: Tanzania Tanzanian government assessment. The current irrigated area is about 450 392 ha (URT 2013). Less than 5 percent of farming households use irrigation (URT 2013). Tanzania’s current irrigation typology as per National Irrigation Policy 2010 (URT 2010) is below: 1. Traditional Irrigation Schemes: These schemes are characterized by poor infrastructure, poor water management and low yields. The existing infrastructure are all temporal, poorly constructed and pose difficulty in overall water management resulting in low water use efficiencies. 2. Rain Water Harvesting (RWH) Irrigation Schemes: These are schemes whereby farmers either directly tap rain water in bunded fields or diversion of rainwater run-offs from seasonal and ephemeral rivers. The farmers irrigating using these techniques suffer from poor infrastructure
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