Frequently Asked Questions (FAQs)

SAGCOT Investment Project FAQs

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.

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.

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).

Who finances the SIP Project?

The SAGCOT Investment Project (SIP) is financed by the International Development Association (IDA) of The World Bank through a loan to the Government of Tanzania (ref: The SAGCOT Investment Program (SIP), Project Appraisal  Document, PAD 345, of February 4, 2016). It seeks to develop income-generating opportunities for 100,000 smallholderfarming households by providing them new technologies and improved farming practices, connecting them with markets and expanding partnerships with reputable agribusinesses in the Southern Agricultural Growth Corridor of Tanzania (SAGCOT).

How long is the 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.

What should I know about SIP and Land Issues 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.

Have there been any concerns that increasing commercial investment under SAGCOT initiative could 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.

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.

Who do I contact for information on the SIP Project?

For more information on the Project Coordination Unit, at the Prime Minister’s Office, in the SIP Project please contact girson.ntimba@pmo.go.tz.

For information on SAGCOT Catalytic Trust Fund’s role in the SIP Project please contact info@sagcotctf.org

For information on SAGCOT Centre Ltd’s role in the SIP Project please contact communication@sagcot.co.tz

For information on Tanzania Investment Center’s role in the SIP Project please contact information@tic.go.tzW

Who is the Fund Manager and how do they work with the project?

The SIP Matching Grant Fund Manager is KPMG-Tanzania, the International Development Advisory Services Group. All questions about the roles and responsibilities of the SIP Matching Grant Fund Manager should be referred to the SAGCOT CTF, since they manage the work which KPMG Tanzania has been contracted to do for the CTF. KPMG provides advisory services to CTF to ensure effective and efficient operation of the CTF MGF (Matching Grant Fund).

Can I contact the Fund Manager ?

No,  but you can get in touch with SAGCOT Catalytic Trust Fund’s Executive Secretary, John Kyaruzi, through info@sagcotctf.org

Who are the implementers of the SIP project and their relationship in the project?

SAGCOT Catalytic Trust Fund?

The SAGCOT Catalytic Trust Fund (CTF) is an innovative financing mechanism for the SAGCOT Initiative; created in response  to the challenges of catalysing  private sector investment in a commercially and financially viable agribusinesses.

It targets smallholder linkages along  the value chain and aims to provide bridge financing for commercially viable agricultural businesses that incorporate and support smallholder farmers.

The SCTF combines high developmental impact with commercial viability in order  to leverage investment  in the agribusiness value chain. The SCTF  has two investmentvehicles:  The Matching Grant Fund (MGF) and  the Social Venture Capital Fund (SVCF).

SCTF is an independent Trust with its own governing board. The SAGCOT CTF administers and manages the contract with KPMG-Tanzania to implement the Matching Grant Fund (MGF).

 

What is SAGCOT Centre Ltd?

The SAGCOT Centre Limited (SCL) was established as a limited company by guarantee in 2011. The SCL works as a broker and catalyst of partnerships among registered partner organizations to incubate initiatives around inclusive, sustainable and viable agricultural value chains. The key role of the SCL is to facilitate partners to deliver on inclusive, sustainable and commercially viable agricultural value chains in the SAGCOT Corridor. By having the visibility of and connection to actors in the whole ecosystem, the Centre’s role is to:

  • inform private and public investment about partnership opportunities as well as priority policy reforms to achieve the SAGCOT objectives;
  • track progress, through monitoring and evaluation, within the partnership, ensuring follow up of partner commitments and progress towards their objectives;
  • encourage and facilitate active participation of the private sector in promoting a cohesive partnership;
  • promote policy and regulatory reforms necessary for achieving SAGCOT objectives;
  • derive lessons, adopt approaches to cluster planning and partnership facilitation, and to communicate on behalf of the SAGCOT Partnership; and
  • promote the SAGCOT partnership, and its opportunities, to a wider audience and array of both regional and international partners.

 

The Tanzania Investment Centre (TIC)

The Tanzania Investment Centre (TIC) was established in 1997 by the Tanzania Investment Act to be the primary Agency of the Government to coordinate, encourage, promote and facilitate investment in Tanzania and advise the Government on investment policy and related matters.

Does the SIP project have Environmental and Social Safeguard Systems to maintain environmental sustainability ?

Yes.  Both  SAGCOT CTF and SAGCOT Centre Ltd have qualified Safeguards and Environmental Specialists in addition to safeguard environmental sustainability on top of the Environmental and Social Safeguards Criteria and procedures assembled based on inputs (derived from ESMF, PMP, RPF, and VGPF). For example, KPMG has hired an Environmental Safeguards Expert and a Social Safeguards Expert to provide advice and assistance during the MGF application process and in the MGF Team’s analysis during deliberations about making award recommendations to the SCTF Investment Committee and/or SCTF Board of Directors for agribusiness matching grant awards.

Where can I file my complaint with this Project ?

In case you have any grievances feel free to lodge it on:

 

What is the SIP Matching Grant Fund (MGF) ?

The purpose of the MGF is to facilitate the expansion of sustainable market linkages and business relationships between smallholders and agribusinesses operating in the SAGCOT area. “Smallholders” include sedentary farmers growing crops and/or keeping livestock (e.g. dairy cows and beef cattle) and semi-sedentary or nomadic pastoralists. It also includes smallholders engaged in fish farming or aquaculture.

The MGF objectives are to: (1) drive improvements in smallholder productivity through the adoption of new technology and improved management practices; (2) connect smallholders to markets through agribusiness partnerships which will raise their incomes; and (3) create employment opportunities in rural areas, especially for vulnerable groups like women and youth, which will raise rural household living standards, improve food security and reduce malnutrition.

What is the difference between the SIP Matching Grant Fund and the Social Venture Capital ?

The Matching Grants Fund (MGF)  is a USD 40 Million fund, with a  USD 5 million management contract between the SCTF and KPMG, for KPMG to manage the MGF. This is designed to catalyse investments in the SAGCOT Region through grants in size ranging from a lor of USD 250,000 to a maximum ceiling of USD 1.5 Million grants in capital, operational expenditure or technical assistance to improve the productivity of smallholder farmers and link them more effectively into commercial demand and supply market systems.

Matching Grant

The CTF Social Venture Capital Fund (SCVF) is a USD 20 Million fund designed to offer debt financing to earlier stage companies to facilitate the growth of emergent agribusinesses to a commercial scale and develop greater engagement with smallholder farmers.

Social Venture Capital

What else should I know about the MGF?

The SACOT CTF proposes to provide agribusiness linkage Matching Grants (MG) of between USD 250,000 (the minimum) and USD 1.5 million (the maximum) to successful applicants.

Tanzania agribusinesses (firms with a 51% Tanzanian ownership or more) applying for the MGF must make a minimum matching investment contribution of 30 percent, whereas regional or multinational agribusiness firms which are registered to do business in tanzania and meet the other eligibility criteria must make a minimum matching investment of 40 percent to the proposed project that will directly benefit smallholder farmers. Applicants who contribute more than the minimum, in their own funds, will receive preference for an award. The SAGCOT CTF hopes to approve a minimum of three (3) MGsby 31 October, 2018.

Matching Grant

What are the eligibility criteria for the Matching Grant Fund applicants and who can apply ?

Applicants should meet the following criteria:

  1. Be a Tanzanian registered private agribusinesses with legitimate licenses and/or permits to do business in Tanzania.
  2. Be a financially viable agribusiness, with two years’ (CY 2016 and CY 2017) audited financial statements from an independent, recognized and registered firm which provides accounting and auditing services.
  3. Have existing relationships with smallholder groups, associations or cooperatives and want to deepen, strengthen or expand those relationships.
  4. Preference will be given to applicants which are registered SAGCOT partners under the broader SAGCOT Initiative, a Public-Private Partnership. For further information please contact the SAGOCOT CTF (See:http://sagcotctf.org/2018/08/01/matching-fund-grant-concept-note-template/) or the SAGCOT Centre Ltd. (See: http://sagcot.co.tz/index.php/partnership/).
  5. Applicants may form partnerships or consortiums that include NGOs and/or community organizations, but the lead applicant must be a private sector agribusiness.

Disclaimer Clause: MGF Applicants are requested please to note the following:

  1. The MGF is a competition with clear criteria. If you do not meet the criteria, please do not apply.
  2. If you meet the criteria and you apply, please realize that not all applications will pass through. Please think about your “Concept Note” application carefully and demonstrate clearly why your proposed project idea justifies MGF support.
  3. We will acknowledge all applications received and provide standard letters of acceptance/rejection to all applicants.
  4. At the “Concept Note” stage, we judge applications solely on the eligibility criteria and quality of the written application form. We will engage with and visit applicants that reach Stage Two (the Full Proposal stage).
  5. The MGF “Concept Notes” will be assessed by the SAGCOT Catalytic Trust Fund (CTF) Team and the SAGCOT Board which will decide which business ideas will progress to the Full Proposal stage.
  6. The CTF and MGF will be looking for the best leverage of funds. Therefore, reducing the size of your grant request and increasing the amount that you intend to provide as matching counterpart funds in the proposed project will improve your score and improve your chances of winning approval to develop a Full Proposal for SAGCOT CTF MGF funding.

Confidentiality Clause:

The SAGCOT CTF and the MGF agree to regard as confidential all information attached to the application and submitted as subsequent progress of the project that is not in the public domain. Only the SAGCOT CTF (and its staff and MGF consultants), SAGCOT Investment Program (SIP) implementing agencies (i.e. the Prime Minister’s Office and The World Bank) and members of SAGCOT CTF Board and Investment Committee will have access to your application. No other entity may see your application without your prior permission.

What are the target regions for the applicants of the matching grant and how were they selected ?

Applicants’ projects must be paired with and for the benefit of smallholders in the following six (6) SIP clusters:

(1) Dakawa; (2) Ihemi; (3) Kilombero; (4) Mbarali; (5) Rufiji; and (6) Sumbawanga. For more information on the clusters in SAGCOT, please see: http://sagcot.co.tz/index.php/sagcot-clusters or http://sagcotctf.org/background/

How do I apply for the Matching GrantFund ?

  • All applicants are required to use the SAGCOT-CTF “Concept Note” template which is available on the SAGCOT-CTF web site.
  • Applicants who are approved at the “Concept Note” stage will then move on to complete a more detailed “Proposal.” Guidance for proposal preparation will be available to successful “Concept Note” Applicants.
  • All “Concept Notes” with the required, complementary documentation must be submitted by e-mail to two (2) separate, but complementary, e-mail addresses: mgf@sagcotctf.organd sagcot@kpmg.co.tz on or before 5:00 PM on FridayAugust 24th, 2018. Proposals submitted in any other manner than electronically will not be accepted and will be deemed to be ineligible for consideration. Proposals not submitted on time will also be deemed ineligible.
  • Successful “Concept Note” applicants should be informed on or before Wednesday, September 5th, 2018 that they are eligible to proceed to the second stage of the application process and develop a Full Proposal which will be before 5:00 PM on Friday, September 28th, 2018.
  • Successful “Concept Note” applicants may be eligible to receive technical assistance from an expert advisory team, appointed by the SAGCOT-CTF, for development of their full business plan which must be included in the final “Full Proposal”application.

What is the Project Coordination Unit (PCU) and what is its role ?

The PCU has management oversight and reporting responsibilities for all components of the Project. It integrates the financial and technical progress reports from each of the agencies being funded, and carries out the overall M&E for the Project. The PCU also takes overall procurement and financial management responsibility during the first six to 12 months of the Project implementation until sufficient capacity has been built in the other implementing agencies (an assessment will be undertaken to assess the agencies capacity).