Abstract:
Tanzania’s forest sector has unrealized opportunities of contributing to socio-economic development and
carbon sequestration. Collectively, smallholder tree growers are becoming the most significant suppliers
to the industry. This paper provides a concise account of investment opportunities in the Tanzanian
forestry sector. It analyses demand, assesses supply, considers industrial capacity and infrastructure. It
identifies six potential forestry clusters and discusses investment opportunities. Mafinga cluster holds
massive but dispersed private smallholder plantation resources, in addition to significant plantation areas
under the government and large companies. There is an opportunity for the establishment of 30,000 ha
more of eucalyptus plantations for veneer production. In addition, investments in the utility pole treatment,
eucalyptus sawmilling, charcoal production, and eucalyptus veneer making will be viable. Njombe cluster
also holds massive but dispersed private smallholder plantation resources, in addition to significant
company plantations. There is an opportunity for investment in 263,000 m3
per year in pine sawmilling
capacity, in addition to smaller investments in utility pole treatment, veneer production, and charcoal
production, among others. The dispersed nature and small scale of most individual smallholder plantations,
poor road access and limited electrification are the challenges limiting utilisation of smallholder resources.
Infrastructure is however improving, and in the meantime, there are opportunities of building sustainable
local processing enterprises in vertical integration with nearby tree growers. The future of the sector will
largely depend on how smallholders are nurtured
