Tanzania suspends construction of $10b Bagamoyo port

An agreement for the initial development of the Bagamoyo Port Project was signed in March 2013 during the visit of the Chinese President Xi Jinping as part of the Tsh1.28 trillion infrastructure package deals. The agreement specified that $500 million would be designated for port financing for the year of 2013 to allow the project to start.

Tanzania and Kenya are locked in a competition for the title of gateway to East and Central Africa, and so far Kenya is winning. Transportation costs on the southern corridor are almost 1.5 times those on Kenya’s northern corridor. Bagamoyo was supposed to take the fight to Mombasa (and Lamu). Now Dodoma will focus on upgrading the ports in Dar and Mtwara (and Tanga).

The cancellation of the project is a reasonable policy move. The cost would’ve severely stressed Tanzania’s fiscal position; and the 20m container capacity was a little too ambitious, to say the least.

Also, this development probably increases the probability that Uganda’s oil pipeline to the coast will be routed through Kenya (see here and here).

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2 thoughts on “Tanzania suspends construction of $10b Bagamoyo port

  1. I was always of the opinion that the Bagamoyo port was never feasible. 10 billion USD was a hell of a price tag on what was in reality, a vanity project. What markets was the Bagamoyo port supposed to service? Kampala is closer to MSA than Bagamoyo and Rwanda/Burundi are too small to be serviced by such a huge port. In future, there might be need for such a project as the population of EA balloons but as at now, it has all the markings of a whit elephant in the making. The decision to cancel the project was inevitable…

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  2. It is not cancelled rather than suspended, since Magufuli became president, wants to revisit the whole project to see if there are any particles of corruption, remember this is huge amount of many, chances of corruption are big.

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