Tanzania and China Sign $2.2 Billion Railway Deal

Tanzania on Tuesday agreed to pay a Chinese company $2.2 billion to complete the construction of a railway line connecting the nation’s main port to its neighbours.

The 1,600-mile (2,561-kilometer) line will run from the port city of Dar es Salaam on the Indian Ocean to Mwanza on Lake Victoria, with future extensions to Burundi, the Democratic Republic of the Congo (DRC), Rwanda, and Uganda.

The Standard Gauge Railway (SGR), which runs from Tabora to Kigoma in western Tanzania, would be finished in 2026, according to President Samia Suluhu Hassan, who was present for the signing.

“Upon completion of the SGR, Tanzania will be in a better position to utilise its strategic geographical positioning to facilitate cross-border trade,” she said.

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Tanzania investment in Standard Gauge Railway (SGR)

According to Hassan, Tanzania’s total investment in the SGR, including the most recent contract, has reached $10.04 billion.

“We have to borrow for this important infrastructure and other sustainable development projects because we don’t have enough local resources,” she said, dismissing criticism that the country was taking on too much debt.

She said that once it is fully operating, the new railway will lower cargo transportation costs from a minimum of $6,000 per tonne between the Dar es Salaam port and the DRC to roughly $4,000 per tonne.

The amount of time required for delivery would decrease from 30 days by truck to 30 hours in 2027.

In exchange for securing energy and commodity supplies like copper and cobalt, China is the continent’s largest investor, pouring billions of dollars into railroads, ports, and airports.

These infrastructural projects are funded by huge loans from China, but Beijing has come under fire for making excessive loans to developing nations without fully vetting their ability to repay them.

Tanzania’s railway system has two existing networks, one linking the East African nation to Zambia and the other connecting it to Kenya and Uganda.

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