Mwanza dry port to ease Uganda -Tanzania trade

 

The construction of the Mwanza dry port is at the final stages. Dr John Magufuli and his Ugandan counterpart President Yoweri Museveni took the undertaking to construct the dry port during a two days state visit to Tanzania early this year. The two leaders also announced that MV Umoja to operate in Lake Victoria will be repaired so that it can ferry goods from Mwanza to Uganda.

In recent years, Tanzania has been positioning itself to wrestle transit cargo business from Mombasa port and has also set its eyes on increased trade with the rest of East African countries- Uganda, Rwanda and Burundi. In 2016 alone, business between Tanzania and Uganda stood at TSH 178.19bn, according to Dr Magufuli.

Tanzania, which serves the Central Corridor that runs from Dar es Salaam port to Eastern Congo is constructing a Standard Gauge Railway line. A joint venture between a Turkish and a Portuguese firm won a tender for construction of 205 kilometres of the standard gauge railway, part of the 1,216km stretch that will eventually link Dar es Salaam with the rest of the country as well as with Rwanda and Burundi.

Railway Assets Holding Company (RAHCO) acting director-general Masanja Kadogosa said the 160 km/hour SGR will handle 17 million tonnes per annum and will run parallel to the existing central railway line built 112 years ago by the German colonialists. He said the consortium will undertake the stretch linking the commercial capital Dar es Salaam to Morogoro.

Tenders for the remaining parts of the SGR project have also been made. They include the 336km line linking Morogoro and Makutupora, Makutupora-Tabora (294 km), Tabora-Isaka (133 km) and Isaka-Mwanza (248 km).

On rehabilitation of Mwanza Dry Port, Ugandan welcomed the move saying it was the second liberation offered by Tanzania after the support it offered Uganda in liberating the country from the dictatorial leadership of Idd Amin Dada.

“I salute the government of Tanzania for the envisaged construction of the Standard Gauge Railway and modernizing the Mwanza port as the services will now be cheaper, faster, more efficient and modern,’’ said Mr Museveni was quoted in the local press.

During Mr Museveni’s visit, Dr Magufuli called for the need to exploit business opportunities to the maximum, urging Ugandan businesspeople, “should come and invest in the country … and Tanzanian traders to equally explore investment opportunities that are available in Uganda.”

The two leaders also asked TOTAL, an investor in the project for the construction of the 1,443-kilometre pipeline to transport crude oil from Hoima in Uganda to Tanga Port, to start the work immediately.

Uganda chooses Tanzania to route its oil exports after a report found the country was a cheaper and more secure option than its other east African neighbour Kenya. Uganda will use Tanga, a seaport city about 200km north of Dar es Salaam, to export its crude oil, rather than Lamu in Kenya as earlier envisaged.

Uganda said a pipeline between Kabaale, in Hoima district, and Tanga, of about 1,400km, will be the most cost-effective route when Uganda begins exporting oil by 2020. Having had a pipeline route through Kenya rejected by Uganda, Kenya plans to build a pipeline from Lokichar in its oil-rich Turkana region to Lamu, where it is building a port, close to the border with Somalia.

“The Kabaale-Tanga route is the only option to secure first oil export by mid-2020, with pipeline availability of 99%,” the report said.

“Uganda firmly concludes that Kabaale-Tanga (Tanzania) route is the least cost route for the transportation of crude oil from the region to the east African coast.”

The report argued that a Hoima to Lamu pipeline would be more ecologically sensitive and that the terrain was more rugged compared with Tanzania, which is flatter. It is hard to clear land in Kenya – taking about two years to compensate land owners. In Tanzania, the government owns all the land, making it easier to access.

Security was also an issue. As Lamu is closer to Somalia on the Indian Ocean, there are fears that a pipeline could be a target for al-Shabaab militants. Tanga port is already operational, while Lamu would only become available in 2022.

The project is envisaged to create 15,000 jobs in Uganda and Tanzania.

Isaac Shinyekwa, a research fellow on regional integration at the Kampala-based Economic Policy Research Centre, said: “Landlocked Uganda wanted to have an alternative port to rely on in case there were issues in Kenya.”

Uganda’s decision not to partner with Kenya was a major blow to the region’s biggest economy and could strain relations with the bloc. Kenya remains by far Uganda’s biggest trading partner in the region.

Kenyan media report that Nairobi could begin talks with South Sudan about a possible partnership on the northern route. France’s Total, a major player in Uganda’s oil sector and widely seen as having influenced the choice of route, says it has already secured the $4bn needed to fund the Hoima-Tanga route.

Kenya says the International Monetary Fund and the African Development Bank have shown interest in funding its pipeline. Kampala relies on Mombasa port for almost all her imports. During the post-election violence in 2008, Uganda was cut off, paralysing businesses