MSc. Dissertation 2018
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<0.05) while
gender, income and membership in socio networks although were not significant had a
positive association with GWI. High initial investment cost relative to farmer’s income
level was revealed. Conclusively, investment in GWI by smallholder farmer is financially
viable and household income level was found to be a constraint to GWI development. The
study suggest that, government and development agencies should participate in GWI
investment such as through subsidisation and tax exemption of GWI devices. Further
market for agricultural goods should be improved in order to increase on farm production
efficiency which presents opportunities for increasing income and hence farmers’ capacity
to initial investment costs.