Infrastructure deserves special attention
14 January 2014
Delays and cost of transport are among major setbacks which have been leading to high cost of doing business for most of the countries in the region, thus derailing the expected efficiency and contribution of trade activities to economic growth and poverty alleviation.
The inadequate levels of infrastructure financing in many developing countries compared to need is one of the reason behind the inefficiency in trade and has been discouraging the flow of investments which could spur economic growth.
According to the African Development Bank (AfDB) in the paper "Developing Economic Corridors in Africa" it stated that adopting economic corridor for the developing nations could be an efficient way of stimulating intra-regional and global trade as well as fostering market integration.
"Economic corridors' approach looks at regional transport routes not only as a means of transporting goods and services or as a gateway for land-locked countries, but also as a tool for stimulating social and economic development in the areas surrounding the route," stated the bank.
With economic corridors, the physical facilities needed for efficient and effective transportation and trade could easily be accomplished and become an important developmental instrument.
Such infrastructure should increase carrying capacity with the aim of opening the rural agriculture, agro-industry and tourism as well as encouraging multimodal structures and upgrading border areas.
Reducing the financing gap most governments have embarked on an innovative approach to mobilising private sector finance to participate effectively in infrastructure development.
The Mwambani Economic Corridor project will be among the first ever privately financed project in the country. The Mwambani Economic Corridor located in Tanga Region is expected to be one of the crucial projects to be implemented in the country that will help in achieving robust and inclusive economic growth.
The largest ever Mwambani project will include the construction of a deep sea and free port as well as a new heavy haul standard gauge railway that will link the Indian Ocean from Tanzania through Uganda and the Democratic Republic of Congo (DRC).
The Co-director of the Mwambani Port and Railway Corridor (Mwaporc), Mr Cuthbert Tenga, said in an interview yesterday in Dar es Salaam that the financing logistics were in place for the project to take off soon.
"The project was received with great attention by Uganda, Democratic Republic of Congo (DRC), Burundi as well as the East African Community (EAC). We are currently waiting to sign an agreement with the government that will identify how the national benefits are safeguarded," he said.
The project es timates show that it will initially create more than 20,000 new jobs during the construction period. The region and the country as a whole will enjoy a major economic boom as new Railway, Port and Free Port Investments stimulate agrodevelopment, real estate and manufacturing and shall create thousands of new jobs and careers.
The free port at Tanga to be constructed adjacent to the new deep sea port will host manufacturing, logistics and other service industries.
Key anchor activities shall include an integrated iron and steel manufacturing cluster. Mr Tenga added that while Tanzania was set to have its first economic corridor, Malaysia has 16 thus contributing greatly to the country's robust economy. Similarly, economic corridors in Hongkong contributed to the fast growing economy of China.
"It is high time that the state and non-state actors' team up to ensure m ore corridors with key infrastructures in place are established to link all regions strategically," he said.
Upon completion, he said the 51tri/- worth hub port project will be ferrying more than 100 million tonnes annually, the volume that is projected to surpass the capacity of the Dar es Salaam port.
He said the port will be in the level of the hub port like Durban. Mwaporc project aims to establish an efficient, cost-effective and integrated cross-border logistics and bulk freight rail transportation economic corridor linking the Indian Ocean in the Tanga Region crossing East and Central Africa, through Uganda to the Atlantic Ocean in the Democratic Republic of Congo (DRC).
Also referred to as the East- West Economic Corridor Railway, Mwaporc railway is envisaged to be a 8,500 km high capacity standard gauge railway with a primary focus on the transportation o f freight.