TANZANIA – The Tanzania Investment Center (TIC), the Tanzania Fertilizer Regulatory Authority (TFRA) and the Petroleum Development Corporation (TPDC) have signed a Memorandum of Understanding (MoU) with ESSA in Indonesia to develop a new fertilizer plant in Tanzania.
The ambitious project, with an estimated cost of Sh3.5 trillion (US$1.3 billion), is scheduled to span five years, from 2024 to 2029. It aims to reduce Tanzania’s heavy reliance on fertilizer imports, which currently constitute 90% of the country’s needs.
This strategic partnership will lead to developing a fertilizer plant based on natural gas and urea in the Mtwara region.
“The natural gas reserve in Tanzania is 54.57 trillion standard cubic feet. But since we started exploiting natural gas, we have not even consumed more than 1 trillion cubic feet, so supply to the plant will not be a problem,” said Francis Mwakapalila, Acting Managing Director of TPDC.
Once operational, the plant will allocate 60% of its production to the local market, significantly reducing dependency on imported fertilizers and enhancing agricultural productivity.
The remaining 40% of the production will be exported, contributing to Tanzania’s economic growth and positioning it as a key player in the international fertilizer market.
The Tanzanian government anticipates that this investment will generate over 400,000 new jobs, bolstering the national economy and providing a substantial boost to the local workforce.
Recently, statistics from the Bank of Tanzania (BoT) showed that the import value of fertilizers in Tanzania surged by a staggering 155 percent, from US$237 million in the 2020/21 fiscal year to US$605.4 million in the 2022/23 fiscal year.
Despite this significant increase in import value, the volume of fertilizer imports decreased by 40 percent, from 662,868 metric tonnes in 2020 to 395,033 metric tonnes in 2021.
According to the data, one major contributing factor to the decline in import volume was the soaring prices of fertilizers in the global market, affecting both supply and demand.
In 2022, Tanzania’s apparent fertilizer use stood at over 584,300 tonnes, according to the International Fertilizer Development Center (IFDC).
The new plant is expected to significantly increase this capacity, aligning with the country’s broader agricultural and economic development goals, given that Tanzania is the third-largest fertilizer market in East Africa after Ethiopia and Kenya.
Sign up to receive our email newsletters with the latest news updates and insights from Africa and the World HERE.
