TANZANIA’S government signed a US$154 million contract on Saturday with state-run China Harbour Engineering Company to expand the main port in the commercial capital, Dar es Salaam. Tanzania is seeking financing for infrastructure projects as it aims to turn the country into a regional transport and trade hub. Under the contract funded by a World Bank loan, CHEC, a subsidiary of the state-run China Communications Construction Co Ltd, will build a roll-on, roll-off (ro-ro) terminal and deepen and strengthen seven berths at Dar es Salaam port. Tanzania hopes expansion of the port will increase container throughput to 28 million tonnes a year by 2020 from around 20 million tonnes now. “Deepening and strengthening of the berths will allow big container ships to dock in Dar es Salaam. All these efforts are being done in order to increase competitiveness of the port,” works, transport and communications minister Makame Mbarawa said at the signing of the contract. Source: LIve News Today

Tanzania’s government signed a $154 million contract on Saturday with the state-run China Harbour Engineering Company (CHEC) to expand the main port in the commercial capital, Dar es Salaam. Tanzania is seeking financing for infrastructure projects as part of its plans to transform the country into a regional transport and trade hub. Under the contract funded by a World Bank loan, CHEC, a subsidiary of the state-run China Communications Construction Co Ltd, will build a roll-on, roll-off (ro-ro) terminal and deepen and strengthen seven berths at Dar es Salaam port. Tanzania hopes expansion of the port will increase container throughput to 28 million tonnes a year by 2020 from around 20 million tonnes currently. East Africa’s second-biggest economy wants to profit from its long coastline and upgrade its rickety railways and roads to serve the growing economies in the land-locked heart of Africa. Big gas finds in Tanzania and oil discoveries 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 under-investment. Tanzania said in January it will receive a $305 million loan from the World Bank to expand its main port, where congestion and inefficiencies are hampering service delivery. The port, whose main rival is the bigger but also congested port of Mombasa in Kenya, acts as a trade gateway for landlocked African states such as Zambia, Rwanda, Malawi, Burundi and Uganda, as well as the eastern region of the Democratic Republic of...

A delegation of Indonesian businessmen has pitched camp in the country to scout for business opportunities. The delegation, which is being hosted by the Kenya National Chamber of Commerce and Industry (KNCCI), on Friday expressed interest in putting money in various sectors such as infrastructure, finance, textiles, energy and tourism. The group said Kenya showed much promise in these sectors compared to other African countries. STRICT REGIME Speaking on behalf of the delegation, Indonesian vice Minister for Foreign Affairs A M Fachir said other Asian countries such as China and India had proved how worthwhile it was to do business in Kenya. Mr Fachir, however, decried Kenya’s strict tariff regime in its trade with Indonesia, but said he hoped the Government would review the same to ease investment in the country. “The value of our bilateral trade is still far from reaching its full potential. Trade between us stands at Sh4.59 trillion. This is a relatively low for both countries, which have total combined GDP of nearly $924 billion (Indonesia - Sh861 billion, Kenya - Sh63 billion),” he said. KNCCI Vice Chairman James Mureu lauded the Indonesian Government for its interest to invest in Kenya, terming the country Africa’s trading hub. “Kenya has potential and is entirely ready for the collaboration between the two governments,” he said. The balance of trade between the two countries is largely in favour of Indonesia. Source: Standard Media

Cost effectiveness and operational efficiency are going to be crucial in ensuring the recently launched Standard Gauge Railway (SGR) achieves its great promise of being a game changer in the country’s economy. The first dynamic is the time factor. There are certain goods that are perishable, especially agricultural products, and SGR will make access to markets faster. Passengers will also now move faster between destinations, and so have more time. The second issue is cost efficiency. Transporters will now take advantage of technology in cost reduction. For them, the key is that it will cost less to move a tonne of cargo. Further, there are substantial savings to be made. One is reduction in fuel. In SGR, fuel efficiency is very high at between 35 and 50 per cent. Maintenance costs will be brought down because of the nature of infrastructure. Because of the expected substitution of road transport with SGR, usage of tyres by trucks will go down. Tyre replacement is one of the major costs in transport, and this will result in substantial savings to the economy. Also, the substitution will see an estimated reduction of at least 30 per cent in fuel used by trucks as haulage shifts to SGR, a further saving to the economy. The next dynamic is the axle factor. SGR gives Kenya Railways the opportunity to increase the load that can be carried on the trains. According to experts, if you can increase the throughput of one wagon, then that’s an advantage. Currently,...

Railways are being built on a scale not seen since the early years of European colonial rule, with the focus overwhelmingly in East Africa. The biggest change to Kenyan logistics since independence was due to take place just days after African Business went to press, with the completion of the new standard gauge railway (SGR). The line has been mainly built with funding from China’s Export-Import Bank, with China Road and Bridge Construction acting as the engineering, procurement and construction contractor. It will run from the Port of Mombasa as far as Nairobi and is expected to be extended as far west as Kampala and then on to Kigali. Nairobi hopes that the completion of the line will see more cargo switched from road to rail. In order to ensure that this happens, it has stipulated that at least 40% of all cargo travelling between Nairobi and Mombasa should be taken by rail to Nairobi Inland Container Depot (ICD) for clearance. The ICD’s annual handling capacity is already being increased from 180,000 TEU – or standard sized containers – a year, to 450,000 TEU, in order to cope with demand. Construction starts in Tanzania The new line will greatly improve cargo transport between much of landlocked Eastern Africa and the Port of Mombasa. Given their rivalry, it was no surprise that the Tanzanian government responded by pushing ahead with the construction of its own new railway to Rwanda. In April, a joint venture of Turkey’s Yapi Merkezi and Portugal’s Mota-Engil...

Tanzania’s Government signed a $154 million (Sh15.8 billion) contract on Saturday with the State-run China Harbour Engineering Company (CHEC) to expand the main port in the commercial capital, Dar es Salaam. Tanzania is seeking financing for infrastructure projects as part of its plans to transform the country into a regional transport and trade hub. The Port of Dar es Salaam, whose main rival is the bigger but also congested port of Mombasa in Kenya, acts as a trade gateway for landlocked African states such as Zambia, Rwanda, Malawi, Burundi and Uganda, as well as the eastern region of the Democratic Republic of Congo. The latest move is expected to increase competition for port users in the region with Kenya that last year launched the second container terminal that was credited with increasing cargo traffic by 2.4 per cent. The terminal has the capacity to handle 550,000 containers annually, which is expected to increase the capacity of the Mombasa port by over 50 per cent. In Tanzania under the contract funded by a World Bank loan, CHEC, a subsidiary of the state-run China Communications Construction Co Ltd, will build a roll-on, roll-off (ro-ro) terminal and deepen and strengthen seven berths at Dar es Salaam port. Tanzania hopes expansion of the port will increase container throughput to 28 million tonnes a year by 2020 from around 20 million tonnes currently. “Deepening and strengthening of the berths will allow big container ships to dock in Dar es Salaam. All these efforts are being...

The Uganda government, which plans to start construction of a multi-billion dollar rail project to Kenya, has to wait until its neighbour agrees to extend the railway line to the border at Malaba for the financier to avail the funds, according to the Standard Gauge Railway Project Coordinator, Kasingye Kyamugambi. Kyamugambi told journalists in Kampala on June 02 that China’s Import –Export Bank is willing to fund the US$2.3bn (Shs 8.13 trillion) rail project upon receipt of assurance that Kenya will extend the track from Kisumu to Malaba. “Uganda applied for the loan about 18 months ago. We have been negotiating and made all the necessary requirements. The only issue remaining is us and Kenya to have a date of completing the railway line and the funds are availed,” he said. He said the only condition yet to be met as spelled out by the financier is to ensure that once the construction of Naivasha-Kisumu rail is ongoing, Kenya will also start working on the Kisumu-Malaba route. This is to ensure that the new rail snakes through Kenya to the neighbouring states in the region and thus generate revenues for recovery of the loan, which will be paid in 20 years, with a five-year grace period. “The two countries are now engaged in negotiation with the bank to agree on the exact month that the Kisumu-Malaba-Kampala railway route will be completed. The heads of state are working on this and we hope the project will commence soon like in September,”...

The government has hired a newly influential US lobbying firm partly in order to help Kenya block a threat to the sizable trade benefits it receives through the Agoa programme, Kenya’s embassy in Washington said on Friday. More than 66,000 jobs in Kenya are in “imminent danger and threat of being lost” due to a move by a US trade association to have all the East African Community member-states barred from continued participation in the African Growth and Opportunity Act, the embassy warned. Kenya last year exported Sh35.2 billion worth of textiles and apparel to the US duty-free under Agoa’s preferential trade terms, up from Sh22.3 billion in 2012, official data show. Kenya benefits from Agoa far more than do the three other major EAC countries: Rwanda, Tanzania and Uganda. The Secondary Materials and Recycled Textiles association (Smart), which represents US-based used-clothing companies, urged a US government trade agency in May to review the EAC states’ eligibility for Agoa. Smart took that action in response to the EAC’s decision in February to phase out imports of second-hand clothing by 2019. “The ban directly contradicts requirements that Agoa beneficiaries work towards eliminating “barriers to United States trade and investment and promote ‘economic policies to reduce poverty,” Smart director Jackie King has said. The used-clothing industry generates thousands of jobs in East Africa that will be lost if the ban takes effect, Smart warned. The Sonoran Policy Group (SPG), the Washington lobbying firm recently retained by Kenya, “will be crucial” to efforts...

Intra-African trade has seen a resurgence as a topic of conversation, featuring prominently at the recent World Economic Forum (WEF) on Africa, and in news reports, as African leaders seek a solution to slow growth, inequality and unemployment across the continent. In the Agenda 2063, The Africa We Want, the African Union (AU) has set a target to increase intra-African trade from 12% in 2013 to approximately, 50% by 2045. This is to be mainly facilitated through the Continental Free Trade Area (CFTA) – a single African market for goods and services, due to be established this year. According to the UN Economic Commission for Africa (UNECA), the CFTA could increase intra-African trade by US$35bn, or 52% above the baseline, by 2022. The intra-regional trade goal of Agenda 2063 also extends to infrastructure, which the agenda says will include high speed rail systems – with a pan-African high-speed train network including all major cities and capitals of Africa – roads, sea and air transport and shipping lines. According to the United Nations Development Programme (UNDP), Africa’s intra-regional trade grew annually at a rate of 13%, up from $30bn to $178bn between 2000 and 2014. Collaboration between government and business is the key to the success of the CFTA and Agenda 2063’s trade goals. This is because co-operation and collaboration across the private, public and social sectors could be a powerful force for transformative change and growth. With shifting dynamics in the global economy, Africa has a unique opportunity to break...

The East African Community has developed an ambitious industrialisation policy to promote the manufacturing sector, which is expected to account for 25 per cent of the regional GDP — up from 10 per cent — by 2032. Anchored in value addition and product diversification, the policy shift is expected to ease the dependence on agriculture and increase the value of manufactured exports to at least 40 per cent, up from the current eight per cent. “The EAC industrialisation strategy and its action plan must guide all our policy actions and deliver results,” said Rwandan Prime Minister Anastase Makuza, during the Second East African Manufacturing Business Summit in Kigali. Over the period, 2006 remains the best performing year, when manufacturing sector growth peaked of 8.2 per cent before crumbling to a low of 1.4 per cent in 2012 and recovering in 2015 to 5.7 per cent. In 2016, its growth shrank to 4.7 per cent. Competition Of note is that while the growth of manufacturing in the EAC is higher than the sub-Sahara Africa average of 4.3 per cent, it is significantly lower than that of the West African economic bloc that stands at 8.7 per cent and Ethiopia whose sector is expanding at a rate of 9.6 per cent. “The growth of the EAC manufacturing sector is not sufficient to create structural transformation or to reach ambitious industrialisation targets,” said Ruth Pollak, research and industrial policy advisor at the United Nations Industrial Development Organisation. Ms Pollak added that although the...