President John Magufuli signalled his determination to develop the country’s infrastructure earlier in the year when he raised the allocation for development projects from 26 per cent to 40 per cent of the budget.
Major investments during the one year of the Magufuli presidency are the construction of the standard gauge railway, the Uganda-Tanzania oil pipeline and the revival of Air Tanzania Corporation (ATCL).
Standard gauge railway
In the 2016/17 budget, the Finance Minister allocated Tsh1 trillion ($455 million) for construction of a standard gauge railway (SGR) line that will link Tanzania with the landlocked neighbouring East African countries on the Central Corridor, Rwanda, Burundi, Democratic Republic of Congo and Uganda.
The 2,190km project will be implemented in four phases over the next three years, beginning with the 200km Dar es Salaam–Morogoro section, expected to start in January 2017. The government is in the process of selecting a contractor out of about 40 applicants.
In addition to the funds allocated in the 2016/17 budget, in July, Tanzania signed a memorandum of understanding with China’s Exim Bank, for a $7.6 billion loan to finance the project.
Currently, the Tanzanian rail network comprises two main railways: The 2,600km Tanzania Railways Corporation (TRC) network and the 1,067km Tanzania-Zambia Railway Authority (Tazara) of connecting Dar es Salaam with Kapiri Mposhi in Zambia. The TRC main line runs between the port of Dar es Salaam in the east through the central areas, terminating at Kigoma on the shores of Lake Tanganyika in the west.
Revival of Air Tanzania
In a bid to revive the state-owned carrier Air Tanzania, President Magufuli’s government has spent about $62 million to buy two Bombardier Q400 aeroplanes from Canada. The two 76-seater planes have already started domestic flights in Tanzania.
The government has also paid a 30 per cent advance to acquire three more planes from the same company next year. One of the Bombardier Q400s is expected to arrive in Dar in June 2017.
The Canadian company also manufactures Bombardier C Series with 130-160 seat capacity, and Tanzania has ordered two of them expected in Dar in early 2018. One costs about $54,000,000.
At the same time, the government has made a $10 million deposit to US-based Boeing for the purchase of a Boeing 787-8 Dreamliner, which costs $224.6 million.
The 242-seater plane is also expected in Dar in early 2018, and, according to the President, it will be making long range trips to help boost tourism, which contributes about $2 billion to the economy per year.
Uganda-Tanzania oil pipeline
President Magufuli this year sealed a deal to make the port of Tanga Uganda’s choice as a point of exit for its oil exports. While the $4 pipeline from Hoima in Uganda to Tanga will be of significant benefit to Tanzania, particularly with increased revenues at the port.
Tanzania’s investment in the project involves improving the port.
The 1,403km pipeline will not only benefit Uganda and Tanzania but also other countries in the region such as South Sudan, Rwanda, Burundi and the Democratic Republic of Congo. Construction is expected to be completed by June 2020.