Tanzania mulls standard gauge railway to boost regional trade links
As infrastructure development becomes the platform through which East African countries are competing in a bid to woo more investors, countries are investing heavily in modern roads, airports and ports.
Tanzania, in a bid to outsmart Kenya has announced that it has secured a loan of $7.6 billion from China’s Export- Import bank. The loan is meant to connect it with its neighbours even as the country looks to its extended coastline to grow its economy.
According to a statement released by President John Magufuli’s office Exim had agreed to provide the concessional loan to finance construction of a major standard gauge railway line, which will start in this financial year.
The announcement follows talks between Magufuli and Exim Bank President Liu Liange in Tanzania’s administrative capital Dodoma on Wednesday.
“The planned standard gauge railway line will improve regional trade links and help to boost the economies of Tanzania and its landlocked neighbours including Uganda, Rwanda, Burundi and the Democratic Republic of the Congo (DRC),” the statement stated.
Natural gas discoveries in Tanzania and oil finds in Kenya and Uganda have turned East Africa into an exploration hotspot for oil firms, but transport infrastructure in those countries has suffered from decades of neglect and under-investment.
Tanzania said last year it had awarded contracts to Chinese firms to build new railway lines, expanding Beijing’s presence in East Africa’s second-biggest economy.
In 2014 it signed an agreement with China Merchant Holding International to build a mega port and economic zone at Bagamoyo that is expected to cost at least $10 billion.
Exim Bank is also financing a $1.2 billion, 532km (330 mile) natural gas pipeline in Tanzania. Tanzania’s Finance and Planning ministry in a separate statement on Wednesday said the country had secured a $200 million loan from the African Development Bank to finance transport infrastructure projects.