THE UNITED REPUBLIC OF TANZANIA PRESIDENT’S OFFICE REGIONAL ADMINISTRATION AND LOCAL GOVERNMENT ASSESSMENT OF INVESTMENT OPPORTUNITIES AND CHALLENGES AT KAKONKO DISTRICT FINAL REPORT EXECUTIVE SUMMARY The study on assessment investment opportunities and challenges was conducted by Kakonko District Council Director in collaboration with the private sector under the sponsorship of Local Investment Climate Project (LIC). The objective of this study was to assess the investment opportunities and obstacles to investments in Kakonko so that the District could have readymade document showing various investment opportunities available in the District and use it to inform prospective internal and external investors wishing to invest in the District. The study covered all 13 wards in Kakonko district. The methodology of data collection involved collection of both qualitative and quantitative information. Results of the study indicated high level of investment opportunities hinged in Agricultural and natural resource sectors. The potential investment was on increasing agricultural production, Agro- processing together with livestock sector. Good investment opportunities are also existing on exploitation of natural resources in terms of mining, beekeeping and establishment of Community Based Hunting Blocks in Moyowosi Game/Kigosi Reserve. However, in order to have good environment for investment, participants of the study suggested the government and other development stakes to improved local investment capital and improve access to credit. They also commented on the need to conduct community empowerment on entrepreneurship skills and improve market access especially for agricultural products. People also suggested the government review on tax and investment policies. Such motivating environment will improve the commitment of local community to investment into various existing investment opportunities. While most of agricultural investment opportunities were suggested to be invested by the local people, respondents on the interview suggested mining industry to be promoted to the external investors. TABLE OF CONTENT EXECUTIVE SUMMARY ............................................................................................................ 2 LIST OF TABLES .......................................................................................................................... 5 1. INTRODUCTION .................................................................................................................. 7 1.1 Background and Justification of the Study ........................................................................... 8 1.2 Overall Purpose of the Study ................................................................................................ 9 1.2.1 Specific objectives:- ...................................................................................................... 9 2. METHODOLOGY ................................................................................................................... 10 3. RESULTS OF THE STUDY .................................................................................................... 11 3.1 Profile of the Study Population ........................................................................................... 11 3.2 Economic Activities Undertaken by People in Kakonko District ...................................... 11 3.3 Sector of Urgent Investment ............................................................................................... 12 3.4 Investment Opportunities Existing in Kakonko District ..................................................... 14 3.4.1 Agriculture as Investment Opportunity ....................................................................... 14 4.4.1.1 Investment Opportunity in Rice Production .......................................................... 17 3.4.1.2 Gross Margin Analysis in Rice Value Chain ........................................................ 20 3.4.1.3 Distribution Cost and Income Between Chain Actors .......................................... 23 3.4.2Investment in Agro-Processing ..................................................................................... 23 3.4.3 Investment in Post-Harvest Management .................................................................... 24 3.4.5 Investment in Agricultural Value Addition ................................................................. 26 3.4.6 Investment Opportunities in Horticultural Production ................................................ 27 3.4.7 Livestock Sector as Investment Opportunity ............................................................... 28 3.4.8 Investment in Agricultural Marketing and Transporting ............................................. 29 3.5 Investment Opportunity in Natural Resources .................................................................... 29 3.5.1 Investment in Aquaculture ........................................................................................... 30 3.5.2 Natural Tourists Attraction as Investment Opportunities ............................................ 30 3.5.3 Cultural Tourism as Investment Opportunities ............................................................ 32 3.5.4 Mining as Investment Opportunity .............................................................................. 33 3.5.5 Beekeeping as investment opportunities ...................................................................... 34 3.5.6 Investment in Rural Energy Supply ............................................................................. 34 3.6 Investment in Commercial Infrastructure and Large Enterprises ....................................... 35 3.6.1 Investment into Bus Stand. .......................................................................................... 36 3.6.2 Investment into Market Infrastructures ........................................................................ 36 3.6.3 Investment for SMEs and Large Enterprises in Kakonko District .............................. 37 3.7 Investment in Social and Health Services ........................................................................... 38 3.7.1 Investment in Health Services ..................................................................................... 38 3.7.2 Investment Opportunities in Education ....................................................................... 39 3.8 Revenue Collection from Investment ................................................................................. 41 4. CHALLENGES FACING INVESTMENT IN KAKONKO DISTRICT ................................ 41 5. CONCLUSION ..................................................................................................................... 43 LIST OF TABLES Table 1: Investment Opportunities in Agricultural Sector ........................................................... 15 Table 2: Agricultural Investment Opportunities by Wards........................................................... 16 Table 3: Irrigation Areas in Kakonko District .............................................................................. 18 Table 4: Marketing of Milled Rice ............................................................................................... 19 Table 5: Investment Requirements for Rice in the Study Areas .................................................. 20 Table 6: Rice Producers Cost and Margin Selling at Farm Gate .................................................. 21 Table 7: Rice Processors Cost Margin - Processing and Trading (Per Bag of 72kg) ................... 21 Table 8: Rice Traders Costs Margins (per 100 Kg) ...................................................................... 22 Table 9: Transporters Cost and Margin (Per bag of 100) ............................................................. 22 Table 10: Investment in Value addition ........................................................................................ 27 Table 11: Investment Opportunities in Livestock Sector ............................................................. 28 Table 12: Investment Opportunity in Natural Resources ............................................................. 29 Table 13: Investment for SMEs and Large Enterprises in Kakonko District ............................... 37 Table 14: Investment Opportunities Health Sector ...................................................................... 39 Table 15: Investment Opportunity in Education Services ............................................................ 40 LIST OF FIGURES Fig 1: Main Occupation of People in Kakonko District .............................................................. 11 Fig 2: Main Business Activities Undertaken in Kakonko District .............................................. 12 Fig 3: Sector of Urgent Investment ............................................................................................... 12 Fig 4: Sectors that need external investors .................................................................................. 13 Fig 5: Proposed Ways to Exploit Investment Opportunities in Kakonko ..................................... 13 Fig 6: Investment Opportunities in Kakonko District by Priority. ............................................... 14 Fig 7: Agricultural Value Chain Operating Framework in Kakonko District .............................. 17 Fig 8: Distribution of Share Profit along the Value Chain. .......................................................... 23 Fig