Additional Financing for Agricultural Sector Development Project

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This emergency program paper provide credits to the Tanzania in support of its Accelerated Food Security Program. The program responds to an urgent request from the Government of Tanzania (GoT) to support its efforts to achieve greater food security by increasing food production and productivity and providing social protection for vulnerable groups and the rural poor. Tanzania is expected to feel the effects of the global economic crisis mostly through export channels (mainly tourism, regional manufacturing exports, cash crops, and natural resources) and lower capital flows from private and possibly official assistance. Because of the structure of its trade balance, which is heavily influenced by oil on the import side and gold on the export side, the net impact is likely to be lower in Tanzania than in other countries. The financial sector is mainly sound and not exposed to global toxic assets. Tanzania's agricultural sector makes major contributions to the economy and is central to food security, household income, and poverty reduction. Any slowdown in agricultural growth will affect the country's overall gross domestic product (GDP) growth and drive up food prices. Agriculture accounts for 26.5 percent of national GDP, 80 percent of employment, and 75 percent of rural household incomes. Agriculture also provides more than 95 percent of Tanzania's annual food requirement.