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Tanzania is set to revolutionize its agriculture sector with a landmark USD 1.2 billion deal with Indonesian firm ESSA Industries. The agreement aims to utilize the country’s abundant natural gas reserves to produce urea fertilizer, ending its reliance on imports and boosting agricultural production.
This initiative is part of the Tanzanian Government’s plan to make the East African country self-sufficient in fertilizer production by 2030. Beyond domestic needs, the administration aims to establish Tanzania as a regional fertilizer hub, supplying neighbouring countries such as Zambia, Congo, Uganda, Kenya, Rwanda, Burundi, and Malawi.
The partnership, involving the Tanzania Petroleum Development Corporation (TPDC) and the Tanzania Fertilizer Regulatory Authority (TFRA), is expected to create hundreds of thousands of jobs and reduce the government’s fertilizer subsidy burden. It is also expected to position Tanzania as a regional leader in fertilizer production and distribution.
The Tanzanian Government has been shouldering a substantial subsidy to ensure that farmers have access to fertilizers since the COVID-19 pandemic. Implementing Essa Industries’ gas pricing model can eliminate this subsidy and provide considerable relief to the national treasury, stated Rahul Puri of ESSA. He noted that the project, set to be operational within five years, will leverage Tanzania’s natural gas reserves to produce urea fertilizer, effectively ending its dependence on expensive imports.
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The initiative is expected to meet the country’s growing fertilizer demand, which has been increasing at an average annual rate of 30%. By 2030, Tanzania aims to be self-sufficient in fertilizer production. According to TFRA executive director Joel Laurent, this shift will not only enhance agricultural productivity but also generate significant foreign currency from exports, boosting Tanzania’s financial resources.
