Experts Hint on Why Tanzania Is Wary of China Merchant’s Bid on Bagamoyo Port

Staff Writers, Dar es Salaam and Lusaka

Branded as a project that would turn the fishing small town of Bagamoyo into a “Dubai of Africa” the proposed Bagamoyo Port and its auxiliary industrial park and a satellite town has officially been suspended by the Government of reformist President John Magufuli.

Announcing the decision in Dodoma this week, the Minister of Transport, Eng. Aloyce Kamwelwe, told the Parliament, that the government has suspended the talks however they would continue if China Merchant of Hong Kong, China would change some conditions. 

In a quick rejoinder the opposition as well as ruling party MPs bragged into social media to condemn the decision accusing the government for what they cited as economic insensitivity.    

“The Bagamoyo Project would attract multitudes of benefits to the people of Tanzania from employment, revenue to locating Tanzania as the logistics hub of Africa and the Dubai of Africa,” say Speaker of the House, a CCM MP.

But expert reached out to comment on the fate of the Project, commended the government decision citing several arguments ranging from economic, social to political considerations and the the planned finalization of the talks, if it will take place ought to consider these facts.

Dr. Stalin Moore from the Institute of Strategic Studies in Zambia who was aware of some levels of Bagamoyo Port negotiations, commended President Magufuli as “some terms advanced by the China Croup investors were worst ever in the history of recent maritime investments.”

He cited the issue of preferential and exclusive clauses on which China Merchant forced a condition for the government of Tanzania not to develop any other Ports in the vicinity during the initial 33 years of operationalization of the Bagamoyo Port.

“This would clearly undermine Tanzania’s geo-position as a country endowened with several natural oceanic ridges, a condition that would see the development of such ports like Tanga, Mtwara and Mafia clogged,” he said.

The other controversial issue is the land ownership question. China Merchant is understood to have proposed to the government of Tanzania that it will exclusively have the title deed for the industrial park on her name.

“This should not be the worry, bad enough is upon learning that the condition was attached with a request for exclusive management of the park from deciding who to invest, tax collection to plot acquisition. This would mean Tanzania has surrendered part of its land to the Chinese firm,” says Jonathan Moyo, a land expert based in Kitwe.  

Regarding political aspect of the project, experts in strategic studies argue that the economic benefits advanced by the project sponsors and their supporters do not reflect the whole truth. China, under the “Belt and Road Initiative” is understood to advance military, security as well as strategic reasons for financing ports and other Silk road projects in Africa and Asia.

“This rising role in security undergirds Beijing’s economic statecraft and commercial interests in Africa, helps professionalize China’s military and protect its citizens there, and furthers its ambitions to be a major power with global influence. The rapid pace of change is taking Chinese security policy practitioners into new territory,” says an article titled: “China’s expanding military Footprint in Africa” says an article published by Mail and Guardian of Zambia in October, 2018.

The claims are hard to beat as last year China Merchant acquired about 66 percent in running the Djibouti Port in the poverty torn country of the Horn of Africa. Chinese flags are all over the port with several Chinese companies subcontracted to run different sections of the Port.

China's Djibouti Port

In another likely event, after years of extending “soft loans” to the government of Sri Lanka, China has taken possession of a Sri Lanka Port after the government had failed to honour its loan repayment obligation.

The Bagamoyo Port was organized to be funded on equity contributions rather than conditioned loans, however, analyst enlist many more challenges on how long it would actually break even to allow government earn its revenues.

About China Merchant:

China Merchants Group (CMG) is a leading central state-owned enterprise based in Hong Kong, under direct supervision of State-owned Assets Supervision and Administration Commission of the State Council. The business performance hit record high in 2018, with 648.4 billion RMB revenue, 11.1% up year-on-year, and 145 billion RMB total profit, 14.1% up year-on-year, ranking No.1 among all the SOEs. By the end of 2018, the company had the total assets of 8 trillion RMB, continuously ranking No.1 among all central SOEs. 

China Merchants was founded in the Self-strengthening Movement in 1872. It is a pioneer in China's national industry and commerce. Within 146-year history, The company set up the first merchant fleet, the first Chinese bank, the first Chinese insurance company etc., playing an important role in modern China. In 1978, the company made great contributions to the opening-up by solely-investing and developing Shekou Industrial Zone, the first zone in China open to the world, and launching China Merchants Bank and Ping An Insurance Company, the first joint-tock Chinese bank and insurance company.

CMG is a conglomerate with three business platforms of non-financial industries, financial services, investment and capital operation. CMG's non-financial industries cover ports, toll roads, shipping, logistics, real estate, zone development, offshore engineering and trade. CMG actively participates in the national initiative of "the Belt and Road", operating 53 ports in 20 countries and districts, creating a overseas network of ports, logistics, finance and industrial parks.