Tanzania ranks as the third-largest fertilizer market in East Africa, following Ethiopia and Kenya. Despite this significant position, the country relies heavily on imports for its fertilizer needs, with up to 90% of its requirements being met through external sources.
To address this dependency, Tanzanian authorities are leveraging the country’s natural gas reserves to boost local production capabilities.
Agreement and Project Details
On August 1, Tanzanian entities including the Petroleum Development Corporation (TPDC), the National Fertilizer Regulatory Authority (TFRA), and the National Investment Center (TIC) signed a memorandum of understanding with Indonesian agrochemical company PT ESSA Industries.
This partnership aims to establish a fertilizer production facility utilizing natural gas and urea.
The project, with a total cost of 3.5 trillion Tanzanian shillings (approximately $1.3 billion), will see the construction of a fertilizer plant in the Mtwara region over the next five years, from 2024 to 2029.
Gas Reserves and Supply Assurance
Francis Mwakapalila, the acting Director General of TPDC, highlighted Tanzania’s substantial natural gas reserves, which stand at 54.57 trillion standard cubic feet.
Despite the extraction activities to date, less than 1 trillion cubic feet of this gas has been used, ensuring a steady supply for the new plant.
Production and Employment Impact
Once operational, the new facility is expected to allocate 60% of its production to the local market, with the remaining 40% destined for international markets.
Additionally, the Tanzanian government anticipates that this investment in the fertilizer sector will create over 400,000 new jobs within the country.
Fertilizer Usage in Tanzania
In 2022, Tanzania’s apparent fertilizer use was over 584,300 tonnes, according to data from the International Fertilizer Development Center (IFDC).
This substantial consumption underscores the importance of enhancing local production to meet the growing demand.
With the establishment of this new plant, Tanzania aims to reduce its dependency on fertilizer imports, optimize the use of its natural gas resources, and significantly boost employment and local industry development.