The 20 Most Promising Businesses in the SAGCOT Region, Tanzania

The Southern Agricultural Growth Corridor of Tanzania (SAGCOT) is an ambitious initiative that aims to increase agricultural productivity and boost economic growth in southern Tanzania. Spanning eight regions—Morogoro, Iringa, Mbeya, Ruvuma, Njombe, Songwe, Katavi, and Manyara—SAGCOT covers about one-third of Tanzania’s total land area. With a focus on enhancing food security, improving farmer incomes, and promoting industrial growth, the region is positioning itself as a key player in Tanzania’s agricultural transformation.

Below are 20 promising business sectors contributing significantly to this vision:

1. Maize Production and Processing

Maize is a staple crop in Tanzania, and the SAGCOT region has vast potential for its cultivation. The region produces over 2.5 million tons of maize annually, with a significant portion processed into flour and animal feed. The maize sector supports food security in Tanzania and contributes to regional exports, especially to neighboring countries such as Kenya and Uganda.

2. Rice Cultivation

The Kilombero Valley, one of Tanzania’s most fertile regions, contributes about 25% of the country’s total rice production. The region’s irrigation systems enable year-round rice farming, and modern mechanized farming methods are pushing yields to over 4 tons per hectare. The local rice industry has become competitive, supplying both the domestic market and regional exports to countries such as Kenya and Rwanda.

3. Sugarcane Plantations

Sugarcane is a major agricultural product in the SAGCOT region, with over 500,000 hectares dedicated to its cultivation. The region contributes significantly to Tanzania’s sugar industry, which produces more than 400,000 tons of sugar annually. This sector also supports downstream industries like ethanol production, helping reduce dependence on imported fuel.

4. Horticulture Exports

The SAGCOT region is a major player in the horticulture export market, focusing on crops like avocados, mangoes, and green beans. With increasing demand from international markets, the region is poised to expand its exports, which currently stand at around $40 million annually. This growth provides a direct source of income for farmers and helps diversify Tanzania’s export base.

5. Coffee Plantations

The SAGCOT region’s coffee-producing areas, especially in Mbeya and Songwe, produce high-quality beans, contributing approximately 30% of Tanzania’s coffee exports. The region’s coffee yield averages around 600 kg per hectare, and the industry has seen a steady increase in global demand, with premium beans fetching higher prices on international markets.

6. Dairy Farming

Dairy farming is growing in response to rising demand for milk and dairy products in urban areas. The SAGCOT region produces over 1 million liters of milk per day, with dairy farmers supplying both local markets and major processors. The industry is expanding through the adoption of improved livestock management practices and the establishment of dairy cooperatives.

7. Oilseed Processing

The SAGCOT region is increasing its oilseed production, particularly for sunflower and soybean. Sunflower production alone in the region exceeds 200,000 tons annually, providing raw material for oil extraction. The local oilseed processing industry is becoming more integrated, producing both edible oils and animal feeds, with a strong potential for export growth.

8. Cassava Value Chains

Cassava plays a crucial role in food security and income generation in the region, with annual production exceeding 2 million tons. The transformation of cassava into high-value products, such as flour and fortified foods, is helping to address malnutrition. Innovations in cassava processing are also creating opportunities for export to neighboring countries.

9. Aquaculture

Aquaculture is rapidly expanding in the SAGCOT region, with fish farming contributing to the production of over 50,000 tons of fish annually, primarily tilapia and catfish. This growth is due to the increasing demand for fish in local and regional markets, as well as improvements in farming techniques and infrastructure, such as fish feed production.

10. Cotton Revival

Tanzania’s cotton industry is being revived, with a goal of increasing production to over 200,000 tons annually. This revival is driven by efforts to improve cotton yields and quality, alongside a focus on organic and sustainable farming practices. Cotton exports are steadily increasing, and the industry is seen as a key growth sector in the SAGCOT region.

11. Bioenergy Production

Bioethanol production from sugarcane molasses is a key renewable energy initiative in the region. The bioenergy industry in SAGCOT is capable of producing over 50 million liters of bioethanol annually, which is used for domestic energy consumption and contributes to Tanzania’s energy security. Bioenergy is also reducing reliance on imported fossil fuels.

12. Agro-Processing Hubs

Agro-processing hubs are integral to adding value to raw agricultural products. The SAGCOT region is home to several agro-processing parks, with facilities focusing on reducing post-harvest losses and increasing productivity. These hubs are expected to process over 1 million tons of agricultural products annually, helping small and medium enterprises (SMEs) scale up their operations.

13. Fertilizer Manufacturing

To support sustainable agricultural growth, fertilizer manufacturing has become an essential industry in the SAGCOT region. The region produces over 300,000 tons of fertilizers annually, primarily nitrogen-based, helping to lower costs for farmers and improve soil fertility, thereby boosting crop yields.

14. Seed Production

Quality seeds are a critical input for enhancing agricultural productivity. The SAGCOT region produces over 50,000 tons of high-quality seeds annually, including maize, rice, and sunflower varieties. These seeds are specially developed to thrive in the region’s diverse climatic conditions and are sold both domestically and for export to neighboring countries.

15. Renewable Energy Solutions

Renewable energy solutions, particularly solar power, are expanding rapidly across rural areas. By 2025, it is projected that over 500,000 rural households will be equipped with solar-powered systems for irrigation and cold storage. This expansion will significantly enhance agricultural productivity and help reduce post-harvest losses.

16. Cold Storage Facilities

Cold storage infrastructure is crucial to reducing food waste and improving market access for perishable goods. The SAGCOT region is seeing a significant increase in cold storage capacity, with facilities now able to store over 100,000 tons of perishable products annually, extending shelf life and enabling farmers to access higher-value markets.

17. Digital Agriculture Platforms

Technology-driven platforms are transforming agriculture in the SAGCOT region. Over 100,000 farmers are currently using digital platforms for accessing markets, obtaining financial services, and receiving agricultural advice. These platforms are enhancing farm productivity and linking smallholder farmers directly to buyers, reducing intermediaries and improving prices.

18. Textile Manufacturing

The revival of the textile industry is helping to add value to cotton and other agricultural raw materials. The SAGCOT region has the capacity to produce over 10 million garments annually, catering to both domestic and international markets. The industry is also creating significant employment opportunities in the region.

19. Apiculture (Beekeeping)

Beekeeping is a growing industry in the SAGCOT region, with honey production reaching over 5,000 tons annually. This sector is empowering local communities, particularly in rural areas, and is seen as a key income-generating activity. The region’s diverse flora supports the production of high-quality honey that is sold both domestically and for export.

20. Tourism and Eco-Agriculture

The SAGCOT region’s rich biodiversity and stunning landscapes are becoming central to eco-tourism. The region attracts over 500,000 visitors annually, many of whom are interested in experiencing agricultural tourism. This sector is integrating sustainable farming practices with tourism, offering visitors the opportunity to learn about local agricultural innovations while enjoying nature.