Tanzania launches five-year plan to boost agriculture insurance

TANZANIA – The government of Tanzania through the Tanzania Insurance Regulatory Authority (Tira) has introduced a five-year plan designed to spearhead insurance of the agriculture sector.

The plan known as the National Agriculture and Livestock Insurance (NALI) Scheme, which will run from 2021 to 2025 intends to tweak the role of each player in agriculture insurance.

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It also targets to raise the contribution of the insurance sector to Tanzania’s GDP from the current 0.53 percent to 3% by 2023 and 5% in 2024.

Despite the agriculture sector accounting for 28% of the country’s Gross Domestic Product (GDP), the sector is exposed to a wide range of risks including drought, excessive rainfall, pests and diseases, among several other perils that negatively affect yields and farmers income.

According to reports by Citizen Tanzania, only five out of 26 insurance companies in the country offer insurance products and services in the agriculture sector.

Insurers say they fail to venture into agriculture insurance due to the risks involved, aggravated by farmers’ poor understanding of the insurance business – and also a lack of agricultural professionals in insurance firms.

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“We expect preparations for the National Agriculture and Livestock Insurance Scheme rollout to be completed so that it can be approved in the next financial year.”

Tira Director for Planning, Research and Market Development – Mr Muyengi Zakaria

The main focus of the plan is how different players including the government can raise their involvement in agriculture insurance.

While the government will have to put good infrastructure in agriculture such as irrigation farming systems, insurance companies will have to commit themselves to offering different affordable products that reach large populations.

Tira also envisages achieving its goals through extending micro-insurance products and services to low-income earners, especially small farmers, traders and livestock keepers.

“We expect preparations for the National Agriculture and Livestock Insurance Scheme rollout to be completed so that it can be approved in the next financial year,” the acting Tira Director for Planning, Research and Market Development, Mr Muyengi Zakaria.

Under the plan, the government will also be responsible for a certain percentage of the risks as a way of building confidence in the plan in firms and prospective beneficiaries.

The move, he hopes, will attract both farmers and insurance firms. It will also entice commercial banks into issue loans to players in the agriculture sector.

Insurance firms agree that agriculture has a huge unexploited potential.

“We have logged our application to Tira requesting a licence to take a stake in its agriculture portfolio – and, hopefully, by December or January 2021, we will get approval from the Tira commissioner. The sector has a lot of potential,’’ the First Assurance chief executive officer, Rogatian Selengia said.

He said the company was able, willing and more than ready to engage in issuance of insurance services for both crop farming and animal husbandry.

The company which insures crops, livestock, poultry and forestry products, currently provides insurance cover to more than 21,000 farmers from 29 groups in the Manyara, Singida, Iringa, Dodoma, Songwe and Rukwa administrative regions on Tanzania Mainland.

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