1. What is the SIP Project?
SIP stands for the SAGCOT Investment Project. The SIP Project supports select aspects of the overall SAGCOT Initiative. SIP works to benefit smallholder farmers through investments that are financially, socially and environmentally sustainable, in line with its development strategy for Tanzania and Tanzania’s own National Strategy for Growth and Reduction of Poverty (Mkukuta II), specifically Cluster I, which calls for the “modernization and commercialization of private sector-based agricultural activities, through accelerating productivity growth and removing bottlenecks along agribusiness value chains.”
The Project aims to support innovative strategies to generate agricultural growth and poverty alleviation, through building successful partnerships between smallholder communities and agribusiness investors. It is also intended to contribute to “catalyzing” the integration of smallholder farmers into competitive agribusiness value chains to help create the opportunity for technology acquisition, productivity improvement and income growth of farmers.
2. What is the SAGCOT initiative?
The SAGCOT Initiative is a public-private partnership launched at the World Economic Forum on Africa in May 2010 in Dar es Salaam, Tanzania, and in Davos, Switzerland in January 2011, as a means to implement the country’s transformational agricultural vision, the Kilimo Kwanza. As outlined in the SAGCOT Investment Blueprint, the Government of Tanzania (GoT) seeks to attract USD 2.1 billion of new agribusiness investment over the next 20 years. To bring at least 350,000 additional hectares into commercial production, incorporating Tanzanian smallholders into internationally competitive supply chains. The SAGCOT Initiative aims to create at least 420,000 new jobs and lift more than 2 million people out of poverty.
3. Which Components does SIP Fund?
SIP has three components:
Component 1: Strengthening of SAGCOT support institutions (total USD 14.33 million, IDA USD 95 million). The component will support two institutions: (a) SAGCOT Centre Ltd. (total USD 11.83 million, IDA USD3.45 million); and (b) Tanzania Investment Centre (total USD2.5 million, IDA USD 2.5 million)
Component 2: Strengthening smallholder business linkages (total USD 85.76 million, IDA USD 55.65 million). This component will comprise two sub-components:
(a) Fund Management (KPMG USD 7.79 million); and
(b) Matching Grants (USD 77.98 million, IDA USD 47.86 million).
Component 3: Project management and monitoring and evaluation (total USD 8.41 million, (of which USD 3.80 million have been provided as a Project Preparation Advance (IDA USD 8.41 million).
4. How long is a SIP Project?
The Project will be implemented over a period of 5 years; following its effective start in August 2016, it will run until August 2020, with Fund Manager contracted to manage the funds until 2022.
5. What should I know about SIP and Land issue in Tanzania?
The World Bank financed SAGCOT Investment Project is structured to increase commercial benefit flows to smallholder farmers derived from the growth of existing agribusinesses that have clear, undisputed land titles and land rights. Only such agribusinesses are eligible for World Bank financing. SIP does not support investments that involve the reallocation of land from smallholders to agribusinesses or that involve the acquisition of new land by private investors.
In supporting SIP, the World Bank recognizes that Tanzania has one of the strongest land law frameworks in Sub-Saharan Africa for the protection of rural land rights. Under the 1999 Village Land Act, most rural land (70 percent of total land available in the country) has been placed under the control of villages and the Act includes robust procedures governing the reallocation of land to private investors.
6. Have there been any concerns that increase commercial investment under the SAGCOT Initiative cold have impacts on Local land rights if proper procedure are not followed?
Yes, and the Government of Tanzania (GoT) has since provided a “Letter of Sector Policy on Land” confirming its commitment to protect the land rights of rural households and village communities. And further ensures any land allocation to agribusinesses within the wider Initiative, will be based on community consent, with appropriate compensation and well defined sharing of benefits and commitment to partnership between the community and the investor. The GoT is also committed to ensure land allocations are transparent and publicly-documented.
7. What should I know about SIP and Indigenous Peoples Policy?
As part of the discussions during preparation of the SIP, the GoT requested a waiver to the application of the World Bank Indigenous Peoples Policy (OP 4.10) stating that the policy was inconsistent with the Tanzanian Constitution which emphasizes unity and calls for equal treatment of all ethnic groups by not giving special preference to individual ethnicities.
The waiver requested was approved by the Bank’s Board of Executive Directors. A Vulnerable Groups Planning Framework (VGPF) was prepared to guide project implementation and includes measures to ensure that such groups would be involved in a process of free, prior and informed consultation; any adverse impacts on such groups are mitigated; that the groups benefit from the project in a socially appropriate manner; and a process for grievance redress is available to them. The VGPF includes monitoring and evaluation to assess the project’s impacts on and benefits for vulnerable groups.
The World Bank’s standard accountability mechanisms remain unchanged, including access to the Inspection Panel, the independent complaints mechanism for people and communities who believe they have been, or are likely to be, adversely affected by a World Bank-funded project.