The financial infrastructure and agricultural development in Tanzania

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Sokoine University of Agriculture


In any economy there is a sector which portrays the highest potential for the contribution to economic growth. In Tanzania, like in many non-oil producing African countries the agricultural sector is the most important. Development efforts in such an economy have to pay due weight to such a sector. This study looks on to the roles and contributions of a financial infrastructure to agricult­ ure development in Tanzania. The study has five chapters. Chapter 1 is an introductory one and gives the background of the economy and justifies the study. Chapter two establishes the basis of evaluation by reviewing and presenting the roles of the financial infrastructure. are evaluationary ones. Chapters three and four Whereas chapter three looks into the structure and set up of the financial system, the philosophical basis of establishment, objectives and roles of the financial instit­ utions, chapter four evaluates the achievements of this system in fulfiling four identified roles of a financial infrastructure; establishing a medium of exchange, mobilization of savings, issuing credit and acting as a tool of economic stabilization. There is evidence of a deliberate effort by the financial system to assist the agriculture sector. The philosophical basis of establishment of institutions, roles and provisions at the Central Bank portray the importance accorded to Agriculture. The weaknesses and low performance of financial institutions in assisting agriculture are attributed to the low level of financial widening and deepening - widening in terms of branch network and deepening in terms of serving more clients. Poverty, unwillingness and resistance by the rural populace are rejected as the reasons for failure in savings mobilization or use of credit. Stable developmental strategies are called upon for harmonious functioning of the financial system.




Financial infrastructure, Agricultural development, Economic growth, Agriculture sector, Tanzania