China: Tanzania’s biggest development partner

 

President Kikwete has received a draft constitution, which will reintroduce a leadership code that bars civil servants from engaging in private business if passed. Photo/FILE 

By ADAM IHUCHA Special Correspondent

In Summary

• The Asian giant is not only the biggest foreign investor, but its investment is mainly in infrastructure — road construction, railways, ports, gas pipeline, buildings and electricity such as wind power farm.

China has emerged as one of the largest investors  in Tanzania. 

The Asian giant is not only the biggest foreign investor, but its investment is mainly in infrastructure — road construction, railways, ports, gas pipeline, buildings and electricity such as wind power farm.

Statistics from the Tanzania Investment Centre show that China’s total direct investment in Tanzania reached $700 million in 2011, ranking sixth among the foreign investment resources.

By the end of June 2013, China’s total direct investment in Tanzania was $2.17 billion.

China has created the largest job opportunities in Tanzania — 150,000 directly created local jobs. Bilateral trade between China and Tanzania was over $2.5 billion in 2012, official data shows.

Open Data for International Development (AidData) also shows that Beijing has become Tanzania’s largest single trading partner — in 2012 it accounted for 15 per cent of Dar’s trade, valued at $2.47-billion — and its second-largest source of investment.

More recently, Tanzania and China signed as many as 19 contracts, reportedly worth billions of dollars. The key component of the deals closed in March 2013 is the building of a multibillion-dollar port at Bagamoyo, northwest of Dar es Salaam.

Bankrolled by the state-owned Exim bank to the tune of $10 billion, the dock is designed to be largest and most ultra-modern in Africa.

READ: Big Brother China pumps $11bn into East Africa

Details show that the harbour is anticipated to be ready by 2017 and will handle 20 times more cargo than Dar es Salaam port, the current major import and export gateway in East Africa, competing with Mombasa.

China-state-run-firm Merchants Holdings also secured a contract to build a 34km road between Bagamoyo and Mlandizi, which will link the port to Tanzania’s internal rail network and the Tanzania-Zambia Railway.

A Chinese $1.2 billion soft loan for a 523km line connecting Dar es Salaam and the Mtwara gas field was signed in September 2012 between Tanzanian and the Exim Bank. Details show that the loan has a 33-year maturity and a low interest rate of 2 per cent.

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AidData also reports that, between 2001 and 2011, mineral-rich Tanzania got $4.6 billion in Chinese funding.

China’s state-owned Sichuan Hongda Group went into a  $3 billion joint venture with Tanzania’s National Development Corporation to exploit a major iron-coal mine.