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Indo-Pacific

Tanzania to revive $10bn Indian Ocean port project with China

Bagamoyo has potential to be East Africa's export hub

Workers unload cargo from a ship in the harbor of Dar es Salaam, Tanzania. (Photo courtesy of the International Labour Organization)

NEW YORK -- One week after assuming the Chinese presidency in March 2013, Xi Jinping embarked on his maiden foreign visit. After a brief stopover in Russia, the new leader arrived in Africa. The three-nation tour of the continent began in Tanzania.

Beijing had high hopes for the East African nation. Facing the Indian Ocean, state planners believed that the country could serve as the main gateway to China -- where resources could be brought from across the continent and loaded onto ships headed for the mainland.

But Tanzania's port of Dar es Salaam was already congested and known for the terrible traffic jams leading to it. So a plan was drawn up to build a new, $10 billion sprawling port in Bagamoyo, about 75 km to the north.

Xi and then-Tanzanian President Jakaya Kikwete watched over the signing of a framework agreement between China Merchants Holdings International, China's largest port operator, and the government of Tanzania to develop a road map for the port project.

The ambitious plan later stalled, reportedly due to frustration on the Tanzanian side over the conditions China had presented, including a request that Tanzania not question who invests in Bagamoyo once the port was operational.

Dar es Salaam's traffic jams hamper its potential to grow as a hub port for East Africa. (Photo courtesy of the International Monetary Fund)

But on Saturday, Tanzanian President Samia Suluhu Hassan said the country will look to revive the port project.

"Regarding the Bagamoyo Port project, let me give you the good news that we have started talks to revive the whole project," she said at a gathering of the Tanzania National Business Council. "We are going to start talks with the investors that came for the project with the aim of opening it for the benefit of our nation," she said, according to local newspaper The Citizen.

China's Xinhua News Agency also carried the president's words.

Hassan's comments come five days after speaking with Xi by phone. "China is ready to work with Tanzania to consolidate political mutual trust, strengthen mutual support," Xi told Hassan according to Xinhua.

Reminding Hassan that Tanzania was the first African country he visited as president, Xi stressed that "China always views and develops the China-Tanzania relations from a strategic and long-term perspective and firmly supports Tanzania in taking the development path in line with its national conditions," Xinhua said.

Xi said China stands ready to synergize the joint construction of the Belt and Road with Tanzania's development strategies.

The repeated pledge to be considerate of Tanzania's national conditions is likely a reflection of the tensions that the Bagamoyo project has caused to date.

China reportedly requested to Tanzania that once Bagamoyo Port was established, no other port would be built from Tanga in the north to Mtwara in the south. (Google Earth)

The Bagamoyo project was shelved by Kikwete's successor, the late President John Magufuli, who had complained about "exploitative and awkward" terms attached to the deal. Among the conditions Magufuli disliked were requests from China that no other port be built in Tanzania, from Tanga in the north to Mtwara in the south.

The Citizen also quoted Magufuli as saying Tanzania was told "we should not question whoever comes to invest there once the port is operational."

The port project was planned to be a three-way collaboration between China Merchants Holdings, Oman's State General Reserve Fund and the Tanzanian government.

China Merchants, said in 2019 that years of negotiations with Tanzania had failed to produce an agreement.

Last year, in a series of tweets, Chinese Ministry of Commerce official Cheng Wang, who was the officer in charge of East African affairs at the ministry between 2013 and 2017, said that once Bagamoyo was complete, the new port and Dar es Salaam would have a relationship similar to Hong Kong and Shenzhen. 

Cheng explained that after negotiations on Bagamoyo stalled, China Merchants focused instead on port development in Djibouti.

Djibouti is where China has its sole overseas naval base. Recently China added a pier in the East African nation large enough to accommodate an aircraft carrier, which could potentially allow the country's navy to project power outside the traditional operating areas of the East and South China seas.

Combined with the late Magufuli's comments on China demanding Tanzania not question who invests in Bagamoyo, one could speculate if China is looking for another East African port it can use for naval purposes.

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