Horticulture Storage and Transport Infrastructure
Develop and operate storage and transport infrastructure systems to handle perishable horticulture products destined for domestic and export markets through a public-private partnership model, including through packhouses and cold storage facilities for transit products. The government establishes special infrastructure and dedicated zones, such as green belts at the port, to fastrack clearance of products.Expected Impact
Improve handling of perishable products and reduce incidences of post-harvest losses.Regions
Development need: Infrastructure is both a facilitator for development and an attractive investment channel. However, the sector is faced with persistent structural challenges, including a heavy dominance of inefficient parastatals in infrastructure provision, accompanied by a poor track record for privatization and private involvement in utilities in the past (1).
Policy priority: The government is committed to develop quality and reliable infrastructure that promotes socio-economic development of Tanzania. Particular emphasis is placed on the provision of quality and safe construction works of roads, bridges, ferries, airports, buildings, mechanical, electrical and electronics in collaboration with private stakeholders (2).
Gender inequalities and marginalization issues: Despite legal protection granted by laws and enforcement mechanisms, discrimination against women in accessing infrastructure and especially land persists in Tanzania. It emanates from the frequent application of customary laws, and an unfamiliarity with formal laws among local leaders and authorities (3).
Investment opportunities introduction: Tanzania’s strong growth in real GDP from 4.1% in 2021 and 5.8% in 2022 is expected to promote significant development in infrastructure needs, including human settlement and particularly modern housing facilities as well as waste and agricultural storage solutions (4, 5).
Key bottlenecks introduction: The growth rate of urban areas in Tanzania has often been higher than the capacity of authorities to cope with the provision of basic services, including delivery of planned, surveyed and serviced land for housing development as well as waste management and horticulture infrastructure (6).
Development need: Tanzania’s horticulture subsector wastes 50-70% of products after harvest due to lack of efficient infrastructures, such as transport, collection and storage centers. Critical logistics issues at the ports, airports, railways, road and cold transport infrastructure require attention in order to cater for the specific needs of the horticulture industry (7 ).
Policy priority: The government is committed to strengthen the logistical infrastructure related to packaging, storage and transport of perishable horticulture produce. It places an emphasis on fast-tracking the handling and clearance systems for horticulture products at the exit points (8, 9).
Gender inequalities and marginalization issues: Although organizations that promote exports exist in Tanzania, they do not actively engage women entrepreneurs in terms of capacity building to make use of export opportunities for example for horticulture produce, including marketing and transport infrastructure (10).
Investment opportunities introduction: Infrastructure opportunities for horticulture produce include refrigerated trucks and railway wagons, packhouses, green channelling systems at the ports, market infrastructure at strategic road transit locations, and cargo freighter operations (7, 11, 12, 13).
Key bottlenecks introduction: Challenges include inadequate electricity supply, lack of appropriately sized and affordable refrigerated trucks and limited cargo airfreighting, underdeveloped export facilities with inefficient clearance systems at exit points, and a lack of reliable data on production and inadequate off-taking activities (14,15).
Critical IOA Unit
Total importation of various cold storage facilities into Tanzania averaged USD 25,908,000 per year between 2016 and 2020, growing at CAGR of 5.2% (17). The country already has several commercial packhouses and collection centres, for example in Tengeru (Arusha), Njombe, Zanzibar, Kilimanjaro and Dar es Salaam (14).
Horticulture is the fastest growing industry within the agricultural sector with an annual average growth of about 11%. External market share has been increasing overtime. In 2019, total horticultural exports averaged USD 779 million, up from US 764 million in 2017 and US 618 million in 2016 (20, 22).
Positive retained earnings (in terms of EBITDA) for investors using cold storage technology to preserve horticulture produce materialize progressively from the second year of investment with the increase in sales from farmers (18).Ticket Size
Business – Supply Chain Constraints
Capital – CapEx Intensive
Over 90% of the horticultural products produced in Tanzania are consumed in the country with only small percentage (about 10% or less) exported. This, is largely due to poor transport and storage infrastructure necessary to enhance their abilities to access markets (regional and international). This makes it difficult for the country to promote competitiveness of productive sectors (5,19,21)
The level of food insecurity is high in Tanzania. 15% of rural households are food insecure, with 15% more at risk of becoming food insecure. Malnutrition also remains high despite the steady economic growth over the past decade. 16.8 million Tanzanians are chronically undernourished. Over 34% of children under the age of five are stunted and nearly 45% of women of reproductive age are anemic (18,34,35).
Horticulture storage and transport infrastructure enhances the shelf life of the commodities and expand the volume of exports accessing the premium export markets. This ultimately increase earnings for all actors in the value chain. (5,18,19,32).
“Improved storage and transport infrastructure has potential to create new employment opportunities particularly to some of the 800,000 youth that enter Tanzania’s workforce each year. The opportunities can be in various segments of the value chain-sorting and grading, packaging, delivery to exporters ‘factories or collection centers (19, 20).
Improvements in distribution networks and processes would reduce transport-related losses, so that greater quantities of food reach market, while also improving end-product quality (19,20,33)
Improved storage and transport infrastrucure for horticulture products improves the food security and nutrition situation among the Tanzanian population (18).
People: Farming communities, especially those living in the hinterlands, benefit from storage and transportation options enhancing the utilisation of their produce.
Gender inequality and/or marginalization: Women, and youth are able to sell increased volume of products due to expanded sehld life
Planet: The environment benefits from waste management, particuarly from reduction of food waste (reduced post harvest losses) which reduces damage and conserves scarce resources.
Corporates: Companies involved in the manufacture and selling of machineries, accessories and facilities for cold storage and transport infrastructure (e.g., cold rooms, freezer units, refrigerated wagons and containers) will get business opportunities from the ongoing infrastructure projects.
Public sector: The government benefits from increased ability to promote infrastructure efficiencies which in turn will lead to additional tax revenue from increased exports
People: The general population obtains greater access to horticulture products as well as job opportunities in the employment intensive industry.
Gender inequality and/or marginalization: Women, the rural and urban poor communities as well as youth are able to secure employment opportunities in different segments of value chain as a result of expanded activities in storage and transport infrastructure
Planet: The planet enjoys safe management of horticulture products and less environmental polution.
Corporates: Small companies particularly SMEs get expanded opportunity to sell products to the Corporates from their small shops.
Failure to adhere to good quality practices in handling horticulture products on transit and exit points may produce negative effects on the product, ultimately contributing to food losses (7, 13).
With expanded activities and modernization of the horticulture sector in Tanzania, there is a likelihood of increased GHG emission. This is largely because fresh food transport system is a cold chain where huge volume of energy is needed to keep raw food in safety condition. Research has shown that the environmental impact of energy use particularly in GHG emission will continue to be felt in developing countries as they upgrade their cold storage infrastructure systems (38).Impact Risks
Low volumes of horticulture products may lead to suboptimal utilisation of storage and transport infrastructure, which may limit the expected impact (17, 19).
Lack of parallel efforts to improve the normal distribution networks (e.g., roads, airports, rail transportation systems) and energy sources (e.g electricity, solar power etc) may limit the expected impact because they are the bedrock on which the cold storage and transport infrastructure is yoked. The two systems complement each other (33).
Poor accessibility and low affordability for small-scale farmers may limit the expected impact because the storage and cold transport infrastructure requires heavy capital expenditure which are ordinarily beyond the reh of small-scale farmers (18, 33).
Horticulture storage and transport infrastructure improves handling of perishable products and reduces incidences of post-harvest losses, contributing towards a competitive horticulture industry.
Farming communities, especially those living in the hinterlands, storage and transportation businesses, food sellers and the planet benefit from horticulture storage and transport infrastructure.
While the model is proven, other factors need to be considered: product volume; quality of distribution network and farmers accessibility and affordability.
Improve handling of perishable products and reduce incidences of post-harvest losses.
Tanzania Horticulture Development Strategy 2012-2021: Emphasises on infrastructure investment as a means for developing a robust competitive horticultural sector capable of supplying high quality produce for domestic, regional and international markets (8).
Third National Five-Year Plan (FYDP 3): Aims to address the challenges of horticulture by investing as well as creating an enabling environment for the private sector to invest in storage, transport and logistics, (5).
National Construction Policy, 2003: Aims at improving the capacity and effectiveness of the construction industry to meet the national economic demand for infrastructure facilities, including for the horticulture industry (25).
National Transport Policy, 2003: Supports appropriate development strategies and establishes a strong infrastructure base and services in all major towns and other centres of socio-economic activities and growth (27).
Fiscal incentives: Tanzania offers import duty and VAT exemption on deemed capital goods, including building materials, utility vehicles and equipment that is required for horticulture storage and transport infrastructure, among other things (33, 34).
The Bagamoyo Special Economic Zone provides quality infrastructure complemented by an attractive fiscal package, business support services, cluster formation and minimal regulations, which is particularly for horticulture activities, including storage and transportation (26).
Plant Protection Act 1997: Governs the importation and export of plant and plant products and ensure fulfillment of international commitment on agriculture trade (39).
Export Processing Zones Act 2002: Facilitates the creation of international competitiveness for export growth. Issues related to the horticulture sector, particularly for the establishments of large-scale production and infrastructure facilities are guided by the Act as well. (40)
Surface and Marine Transport Regulatory Authority Act: Provides regulations and the code of conduct for clearing and forwarding agents (30).
National Institute of Transport Act, 1983: Provides for the establishment of the institute to provide facilities for training in techniques of transport management, automobile mechanics and transport operations (31).
The Tanzania Horticulture Association (TAHA) has developed strategic storage infrastructure for horticulture produce, including packhouses and collection centers at critical loss points in Njombe, Kilimanjaro, Arusha, Dar es Salaam and Zanzibar. They also serve as convenient sites for farmer training (14).
TAHAFresh, a company established in 2008 through the Tanzania Horticultural Association (TAHA), is a premier logistics service provider in Tanzania. It offers integrated logistics services covering airfreight, sea and ocean freight forwarding, trucking, customs clearing and insurance (14).
The construction of a packhouse by the Tanzania Horticulture Association (TAHA) in Njombe triggered improvement of quality of avocados and stimulated demand in the export market. To the farmers, the increase in quality and demand influenced prices, which doubled from TZS 600 (USD 0.26) per kilo in 2015 to TZS 1,225 (USD 0.53) per kilo in 2017 (7).
The construction of a collection centre by TAHA with charcoal coolers greatly minimized the incidence of post-harvest losses in Midawe in Arusha. The losses have reduced from 40% to 8% with the subsequent impact of increasing farmers income. In addition, the collection centre has significantly improved the efficiency with which the buyers operate and relate to the farmers (7).
TAHA Fresh. Farm to Fork Ltd, BRAVO Logistics (T) Ltd,East Africa Fruits Farm & Company Limited, EAT Fresh Ltd
Ministry of Agriculture, Ministry of Industry and Trade, TanTrade, Tanzania Ports Authority, Tanzania Railways Authority, Tanzania Road Transport Agency, Tanzania Horticulture Association (TAHA), Tanzania Investment Centre (TIC), Tanzania Export Processing Zones Authority (TEPZA).
World Bank Group (WBG), African Development Bank (AfDB), European Union (EU), United Nations Development Programme (UNDP).
Tanzania Agriculture Council, Tanzania Food Gardening Network)TaFoGa Net), FinTrack, Technoserve, Enterprise Works, Private Agricultural Sector Support Trust (PASS)
Sector & Subsector Sources
1) TanzaniaInvest.com, 2022, https://www.tanzaniainvest.com/construction/realestate
2) United Republic of Tanzania, Ministry of Works and Transport Strategic Plan, 2021/22 – 2025/26
3) Kerbina Joseph Moyo, Women’s Access to Land in Tanzania, The Case of the Makete District, Royal Institute of Technology (KTH) Stockholm 2017
4) Kerbina Joseph Moyo, Women’s Access to Land in Tanzania, The Case of the Makete District, Royal Institute of Technology (KTH) Stockholm 2017
5) United Republic of Tanzania, Third National Five-Year Plan (FYDP 3), 2021
6) International Journal of Social Science Studies Vol. 6, No. 12; December 2018
7) Tanzania Horticulture Association (TAHA), The Horticulture Industry in Tanzania, Opportunities, Challenges and Way Forward, 2019
8) Horticultural Development Council of Tanzania (HODECT), Tanzania Horticultural Development Strategy 2012- 2021)
9) The United Republic of Tanzania, Ministry of Agriculture, National Horticulture Development Strategy & Action Plan 2021-2031
10) International Labour Organization (ILO), Women’s Entrepreneurship Development in Tanzania: Insights and Recommendations, 2014
12) United Republic of Tanzania, Third National Five-Year Plan (FYDP 3), 2021
13) Tanzania Investment Centre (TIC), Tanzania Investment Guide, 2021
14) USAID, Case Study Growth of Tanzania’s Horticulture Sector: Role of TAHA inn Reducing Food Loss, 2020
15) USAID, Case Study Growth of Tanzania’s Horticulture Sector: Role of TAHA inn Reducing Food Loss, 2020
16) Tanzania Horticulture Association (TAHA), The Horticulture Industry in Tanzania, Opportunities, Challenges and Way Forward, 2019
17)ITC-TradeMap Trade Statistics, Accessed on February 07,2022
18) Tanzania Horticulture Association (TAHA), Feasibility Study for Cold Storage Technology in Zanzibar, 2021
19) (EAC Secretariat, Fruits and Vegetable Strategy and Action Plan, 2021-2031
20) Tanzania Horticulture Association (TAHA), Feasibility Study for Cold Storage Technology in Zanzibar, 2021
21) EAC Secretariat, Fruits and Vegetable Strategy and Action Plan, 2021-2031
22) Tanzania Horticulture Association (TAHA), Tanzania Market Access Strategy for the Horticulture Industry (HIMAS), 2021
23) EAC Secretariat, Post Harvest Loss Management Strategy and Action Plan for the Fruits and Vegetables Value Chain, 2021
24) Kingdom of Netherlands: Horticulture Study: Mapping of Production of Fruits and vegetables in Tanzania, 2017
25) URT, Construction Industry Policy, 2003
26) URT, Bagamoyo SEZ Master Plan, 2013
27) URT, National Transport Policy 2003
28) Investment Promotion Act No. 6 of 2004
“29) URT Land Act, 1998”
30) URT, Surface and Marine Transport Regulatory Authority Act (Cap. 413):
“31) URT, The National Institute of Transport Act 1983”
32) EAC Investment Guide, United Republic of Tanzania Standard Incentives for Investors
33) EAC Investment Guide, United Republic of Tanzania Standard Incentives for Investors
34) EAC Investment Guide, United Republic of Tanzania Standard Incentives for Investors
35) USAID, Agriculture and Food Security Program in Tanzania:
37) UN Environmental Programme, Food Waste Index Report, 2021
38) Alexandria Engineering Journal, Sustaining the shelf life of fresh food in cold chain – A burden on the environment, 2016
39) URT, Plant Protection Act, 1997
40) URT Export Processing Zones Act 2002: