Why substantial investment is needed for Tanzania’s ports

Last week, Angola and the DRC granted a group of investors a 30-year concession to operate the railway linking Lobito and Kolwezi, a city in the DRC's southern copper belt.

Partially funded by the US, the $555-million project is expected to boost mineral exports and intra-African trade and cement Angola's diplomatic pivot to the West, analysts said.

Currently stretching about 1,700 kilometres, the railway was completed about a century ago by British investors who were interested in getting copper out of Africa.

The railway is expected to be the shortest and fastest way to port from the major mining district of Kolwezi in the DRC, where exports of copper, cobalt and other raw materials are growing rapidly.

It will also extend to Zambia's copper belt.

Transport and logistics expert Juma Fimbo said, “As we are busy debating on whether or not to give DP World a concession to operate Dar port, we have lost Zambia to the Lobito corridor and we are on the way to losing the DRC.”

Going by TPA data, the DRC is Dar port’s largest customer, with almost three million tonnes of transit cargo, followed by Zambia and Rwanda with 2 million and 1.5 million tonnes, respectively.

According to TPA, Dar port handled a total of 20.43 million tonnes of cargo in the 2021/22 financial year.

Mr Fimbo said the 1,300-kilometre central transport corridor, which begins at Dar es Salaam Port – serving Tanzania, Zambia, Rwanda, Burundi, Uganda and eastern DRC – is now facing an existential threat.

The threat comes from the Lobito corridor and the 1,700km northern corridor, which commences from the Port of Mombasa and serves Kenya, Uganda, Rwanda, Burundi and eastern DRC.

Logistics and transport expert Alphonce Mwingira proposed that three measures be taken to improve the country’s corridors.

He called for the construction of the standard gauge railway (SGR) to Kigoma and Musongati in Burundi to be expedited.

The railway will also serve eastern DRC, said Mr Mwingira, who is a retired principal transport planning officer in the Ministry of Works and Transport.

“These are two major markets that if fully captured by Tanzania will enable our country to prosper economically,” he told The Citizen.

He also proposed the construction of the southern corridor SGR to satisfy transport demand that will result from mining activities at Liganga and Mchuchuma iron ore and coal mines, respectively.

Market survey should also be undertaken to establish what exactly the demand is for transport to and from Malawi.

Further, Mr Mwingira proposed the construction of vessels to serve eastern DRC, especially Kalemie in mineral-rich Lubumbashi.

This has to go hand in hand with upgrading ports in Tanzania and convincing the DRC government to do the same for ports in the east of the country.

“Let’s capitalise on the fact that the distance to the sea gateway of Dar es Salaam Port is shorter compared to other corridors,” he said.

It should also be noted that China is currently the main source of eastern, central and southern African merchandise and is a major market for mining products.

“Tanzania is more strategically located to serve this route than West African ports, which are in closer proximity to eastern US and southern Europe,” observed Mr Mwingira.

If the DRC and Zambia decide to use the Lobito corridor for exporting mining products to the Far East from eastern DRC and north-eastern Zambia, the two countries' economies will be severely impacted due to high transport costs.

“No private entity in these two neighbouring countries will prefer the Lobito corridor over the central and Tazara corridors,” Mr Mwingira said.

However, he cautioned that Tanzania also has to do its utmost best to ensure it does proper marketing to entice the private sector within and outside the country to use Dar es Salaam Port and its supporting road and railway transport services for exporting and importing goods.

This includes, but not limited to, encouraging the private sector (clearing and forwarding agents in Tanzania) to clear goods within three days (to start with) and get paid instead of waiting until 14 days have passed before collecting their payments.

“This is a major contributor to Dar es Salaam Port having higher dwell times compared to Mombasa Port and is thus not conducive for the private sector,” said Mr Mwingira.

That notwithstanding, Tanzania can also highly benefit by capturing at least 20 percent of Uganda's imports/exports which their shortest route is through Mombasa Port.

Presently, Tanzania handles only two or three percent of the Ugandan cargo annually, according to Bandari College Dar es Salaam principal Lufunyo Hussein.

“This tells us that, as a country, we need to mend our ways of doing business to attract more cargo,” he told The Citizen.

Logistics and transportation strategist Ally Kilengawana voiced similar views, saying the country needs to act now.

“The key rail project linking Angola's Lobito Port to the Democratic Republic of Congo and Zambia is a huge threat to the country’s ports and the SGR project,” he said.

During the 1970s, Zambia almost solely used Dar Salaam Port for its imports and exports.

Today, he said, only 25 to 30 percent of the country’s imports and exports pass through Dar es Salaam Port, with the rest passing through other corridors.

“We need to wake up from our deep slumber,” said Mr Kilengawana.

Tanzania Shippers Council secretary general Sallu Johnson said the opening of the old Benguela railway through Port of Lobito and the DRC and again three new bridges across the Zambezi Rivers give rise to other competing gateways in the form of a myriad of ports to both the Atlantic and the Indian oceans.

“This will offer direct competition to our sleeping corridors both connected to railways linking the mighty DRC from North East to the Southern end generating over 10million tons of cargo yearly,” warned Mr Johnson.

He added, “There have been advantages from a political and geographical stand to which Tanzania as a country has and continues to fail to tap.”

Dar Port was once the most lucrative gateway for landlocked central African States.

Built capacity by then (1970s) for the 1,860-kilometre Tazara rail, which worked closely with Dar port, was five million tonnes.

But today, due to low investment causing lack of engines and wagons, the figure has dropped to less than 400,000 tonnes a year, this calls for quick action to improve the country’s railways and ports.

“Now it is too late. The cake is shared with many, a privilege we have lost for our poor understanding of our overdue corridor potential,” Mr Johnson said in response to a question on what needs to be done to restore Dar port’s lost glory.

Tanzania Ports Authority (TPA) director general Plasduce Mbossa said if the rail project linking Angola's Lobito Port to the DRC and Zambia becomes operational and if the service will be attractive, there will be a scramble for customers.

He said the government will do whatever it takes to significantly increase the Dar port’s efficiency, or else, the country will lose its customers to its African peers.

“We need to make sure that the costs for our corridors are friendly and bureaucracy is removed to attract more users,” said Mr Mbossa.

It is on those grounds that the TPA boss believes that working with serious investors who have financial muscles and are rich in know-how, is inevitable.

Last Tuesday, the presidents of Angola, Zambia and the DRC met in Lobito to announce that the Lobito Atlantic Railway would operate, manage and maintain the rail infrastructure for the movement of goods along the 1,300km corridor for the next 30 years.

It is a consortium joint venture of Trafigura; Mota-Engil, an international construction and infrastructure management company; and independent rail operator Vecturis SA.