Zanzibar defends port deal with French firm amid opposition criticism

Unguja. The government has dismissed calls by opposition party ACT Wazalendo to terminate the Malindi Port management contract with Africa Global Logistics (AGL), saying the French firm has demonstrated high efficiency.

ACT Wazalendo had urged the government to revoke the agreement between Zanzibar Ports Corporation (ZPC) and AGL, arguing that the deal was not beneficial to the country.

However, the government insists there are no plans to terminate the contract, citing a 41 percent increase in revenue since AGL took over operations in 2023, along with improvements in loading and unloading efficiency.

The government, through ZPC, granted AGL management rights for Malindi Port under its subsidiary, Zanzibar Multi Terminal (ZMT), for a five-year period starting September 18, 2023.

Speaking to journalists on February 27, ACT Wazalendo’s vice chairman, Ismail Jussa, alleged a decline in revenue, misappropriation of funds, lack of equipment, increased charges, salary cuts for workers and the exclusion of some employees from new contracts.

However, addressing the claims on Sunday, March 2, 2025, Minister for Works, Communications and Transport, Dr Khalid Salum Mohamed, said the party was misleading the public, adding that the government prioritises national interests over individual grievances.

“It is not possible to terminate the contract at this time. The agreement includes key performance indicators (KPIs) that we have been monitoring since its signing. We cannot make decisions based on the dissatisfaction of a single person or group,” he said.

He explained that the government sought a new port operator due to inefficiencies that had led some shipping companies to avoid docking in Zanzibar.

Company selection

Dr Khalid said that four companies expressed interest in managing Malindi Port, but AGL was the only one that met the required standards. He said the company offered a 30 percent royalty to the government and covered all operational costs while absorbing all ZPC employees.

Before AGL took over, ships waited at anchorage for between 20 and 40 days. This has since been reduced to an average of eight days. However, between January and March this year, the waiting period increased to 18 days due to higher demand for goods ahead of the holy month of Ramadan.

Equipment purchase

On claims that the government wasted Sh17 billion on equipment purchases despite knowing that an investor was coming, Dr Khalid clarified that at the time of purchase, no contract had been signed with AGL. The equipment, he said, was acquired to reduce congestion and improve operations.

“It is not true that ZMT did not buy new equipment. Among the machines they have procured is a mobile crane with a high capacity for handling containers,” he said.

Dr Khalid also revealed that AGL has eased congestion by constructing a dry port at Maruhubi at a cost of $5 million, with plans to expand the facility. The dry port has increased storage capacity from five to 11 acres.

Dr Khalid acknowledged customer complaints about delays in cargo clearance, attributing them to system changes. He said working hours have been extended from 8:00 AM to 8:00 PM, up from the previous 5:00 PM. On Saturdays, operations run from 8:00 AM to 5:00 PM, while on Sundays, the company is considering limited working hours.

On claims of increased port charges, the minister said the operator is following the 2018 regulatory guidelines, adding that some fees had been listed but were not enforced before AGL took over.

“For example, charges for transporting containers from the port to the dry port did not exist because there was no dry port. Also, crane fees were listed in the guidelines but were not previously applied,” he said.

Revenue growth

Dr Khalid dismissed claims that employee benefits had been reduced, stating that workers who previously earned between Sh600,000 and Sh800,000 now receive up to Sh1 million, especially machine operators. Salaries for other staff are still under review.

Responding to concerns that independent truck owners are not allowed to transport containers from the port, the minister explained that such a move would cause congestion at the already limited port space.

ZPC director Ali Akif reported that monthly port revenue has doubled from Sh1 billion to Sh2 billion after deducting operational costs.

“When AGL took over, government earnings stood at Sh1.4 billion per month. This has now increased to Sh2.6 billion per month, marking a 41 percent rise,” he said.

Since AGL assumed control on September 18, 2023, the government has earned Sh29.3 billion in profit.