Financial Viability Of Groundwater Use For Irrigation By Smallholder Farmers In The Usangu Plains, Tanzania

ABSTRACT

Groundwater (GW) use for irrigation by smallholder farmers has been proposed as a solution to increasing water scarcity in the Usangu Plains, Tanzania. This study evaluated the financial viability of utilising GW for irrigation by smallholder farmers in the plains. Specifically, the study analysed the costs and benefits of using GW for small scale irrigation, examined the socio-economic factors influencing the use of GW for irigation, and assessed the financial affordability of smallholder farmers to invest in GW irrigation. Primary data were collected using a semi-structured questionnaire which was administered to a random sample of 97 households in three villages, while data from key informants were gathered using a checklist. Secondary data from various sources were used to supplement the primary data. Discounted cash flow, descriptive statistics, and logistic regression were used to analyse data. Key findings show that, investment in GW for irrigation is economically viable at a discounting rate of 12% and had a Net Present Value of TZS 38 636 794, Cost Benefit Ratio of 6.55, and Internal Rate of Return was 81%. Socio-economic factors namely household size was statistical significance (P