Tanzania: USD 1.32 billion China support secured for SGR

Tanzania has signed a contract for $1.32 billion in Chinese support for the ongoing construction of the standard gauge railway.

President John Magufuli signed the contract on Friday with visiting Chinese Foreign Minister Wang Yi who has been on a traditional New Year whirlwind tour of African capitals. The two met in President Magufuli’s home town of Chato, where the president is spending his leave.

The injection will cover construction of the 341km stretch of railway between Mwanza and the Isaka dry port. Under the agreement, two firms will undertake the project: The China Civil Engineering Construction and China Railway Construction Company.

The Chinese minister also pledged $150,000 to support the expansion of a vocational training centre in President Magufuli’s hometown of Chato, and another $20,000 to boost fishing activities in the Lake Victoria zone.

Tanzania is looking to tap into China’s huge market through reciprocal import and export trade, even as China makes diplomatic inroads on the continent.

“My discussions with Mr Wang Yi included how Tanzania can take full advantage of China’s 1.5 billion population, as the ideal market to sell our abundant agriculture produce such cashewnuts, tea, coffee, fish and cotton.”

“Tanzania’ is also a member of the EAC and SADC countries. That constitutes a total market of about 500 million people altogether,” President John Magufuli said after meeting the Chinese minister.

President Magufuli also used Mr Wang’s visit to press China to scrap Tanzania’s long-standing debts including $137 million for the construction of living quarters for Tanzanian military officers and $15 million for building the now-dilapidated Urafiki textile factory in Dar es Salaam.

Mr Wang’s visit — the first by a top Chinese government official to Tanzania in 10 years — was a follow-up on China’s President Xi Jinping’s private telephone call to Mr Magufuli reconfirming China’s support for his administration following his re-election last October.