Tanzania’s local dairy industry gains ground as milk output rises 40%

TANZANIA – Tanzania’s milk production rose 40% over six years to 4.2 billion litres in 2025/26, while higher import levies and improved processing technology strengthened local products.

Locally processed dairy products are displacing imports on supermarket shelves in Tanzania as domestic production and processing expand.

The Citizen reported that government policy reforms, investment in modern equipment and longer product shelf life have improved the competitiveness of Tanzanian suppliers.

Figures presented to Parliament in May 2026 by Livestock and Fisheries Minister Dr Bashiru Ally show that national milk production increased 40% in six years, from 3 billion litres in the 2019/20 financial year to 4.2 billion litres in 2025/26.

The volume processed rose 37%, from 74.3 million litres in 2019/20 to 101.4 million litres during the first 10 months of 2025/26.

Import policy has also changed the competitive balance. In 2018, Tanzania raised charges on imported milk products from Sh150 to Sh2,000 per kilogram under the Animal Diseases and Animal Products Movement Control Regulations.

Tanga Fresh Limited chief executive Musa Kopwe told The Citizen that imported milk dominated supermarkets 10 years ago, whereas locally processed products now occupy a much larger share.

New technology has extended the shelf life of domestic milk to between 90 and 180 days.

Factories remain heavily underused

The expansion in national output has not translated into efficient use of processing assets. Tanzania Dairy Board data show that 187 plants have combined installed capacity exceeding 1 million litres per day, but currently process only about 287,000 litres.

This leaves processors with high fixed costs and limits the commercial market available to farmers.

Tanga Fresh illustrates the mismatch. The company expanded daily capacity from 40,000 litres to 120,000 litres, but operates at only about 15% because it cannot secure enough raw milk.

Kopwe said processors also face electricity costs, taxes and equipment-maintenance expenses. These pressures can delay payments beyond the expected 15-day period, discouraging farmers from supplying factories consistently.

Seasonal production, prolonged drought and limited preservation knowledge further disrupt supply.

Investment targets cattle productivity and collection

Low yields remain a central constraint. Tanzania has more than 39 million cattle, but about 90% are indigenous breeds with relatively low milk productivity.

Milk collection centres increased from 200 to 269 over the past six years, while tax exemptions for imported collection and processing equipment are intended to support further investment.

The government is implementing a Sh216 billion livestock vaccination programme for 2025–2030 and a Sh520 billion dairy development programme covering 2025–2035.

The latter includes the importation of 17,200 improved dairy cattle, construction of 150 collection centres, and investment in water infrastructure and pasture development.

Consumption nevertheless remains limited: industry estimates place annual per-capita intake at 47–49 litres, while government data put it at 70.5 litres in 2025/26. Both measures are below the Food and Agriculture Organization recommendation of 200 litres.

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