Tanzania losing billions through poor transport systems - AfDB
10 March 2014
The East African
Tanzania's geographical advantage as a regional trade gateway and logistical hub in East Africa is being eroded by the deteriorating state of its infrastructure, the African Development Bank (AfDB) has said.
In its latest report on the country's infrastructure, the bank says that economic growth, efficiency and competitiveness are being hampered by inadequate transport infrastructure.
The report is titled Opening the Gates: How the port of Dar es Salaam can transform Tanzania, and authored by Jacques Morisset, the lead economist for Tanzania, Burundi and Uganda.
The country's ports, roads, railways, aviation systems and pipelines are in bad shape, and worst is the port of Dar es Salaam, the bank said.
AfDB proposes a public-private partnership (PPP) model to revitalise the overstretched and dilapidated transport infrastructure, which it says has significantly lowered the country's competitiveness.
Tanzania is 134th in the quality of its infrastructure out of 148 countries ranked by the World Economic Forum last year in its annual Global Competitiveness Report.
Uganda is ranked at position 133 in the report; Burundi is second-lowest globally at position 146. Rwanda is at position 104, and Kenya at 102.
The leading countries in Africa in the quality of their infrastructure are Mauritius at position 50, South Africa ranked 66th, and Tunisia 77th.
The Food and Agriculture Organisation estimates that as much as 76 per cent of the cost of marketing maize in East Africa is taken up by transport alone.
In the past five years, AfDB has invested over $5.4 billion on the continent in infrastructure investments through PPP financing.
Infrastructure projects in Africa currently take an average of seven years from project preparation to development. The AfDB recently launched the Africa50 Infrastructure Fund, which aims to raise $500 million by the first half of 2014 to help shorten the project period to less than three years.
Dar es Salaam port, which provides vital access to world markets for six landlocked countries, is now constrained by inadequate space to store and process containers.
Both seaport and railway networks serve a large market, which includes the country's hinterland and the landlocked countries of Burundi, Rwanda, DR Congo, Uganda, Zambia and Malawi.
Recent economic indicators for this region show that it has about 168 million people, a combined GDP of $83 billion and an annual volume of trade exceeding $27 billion.
The World Bank's third Tanzania Economic Update report shows, among other things, that container vessels transporting imported merchandise were on average queuing for 10 days just to berth at the Dar Port, and an additional 10 days to unload the merchandise, clear it and transport it from the premises.
Drawing comparisons between Dar and Mombasa ports, the report says it took less than a day for a ship to berth in Mombasa in 2012, while dwell time was three to four days in Dar; the international standard is two days.
Dar es Salaam port manager Awadh Massawe said the port needs an upgrade of infrastructure, enhancement of operational efficiency, and maximisation of spatial efficiency.
"We also need $170 million for an access channel and turning circle dredging; $360 million for entrance channel dredging; $1.5 million for a feasibility study for the proposed port at Mbwamaji, and $3 million for a feasibility study of the entrance channel and geo-technical survey," Mr Massawe said.
In March 2013, Tanzania and China signed a deal that will see the latter construct a multibillion dollar port in Bagamoyo district, northwest of Dar es Salaam.
Under a five-year transport sector investment plan that started in July 2012, the government has placed emphasis on railways and, in particular, the revival of the central rail corridor linking Dar es Salaam with the lake ports of Kigoma and Mwanza.
Proposed allocations under the plan allocate $130 million to railways.
Minister for Transport Harrison Mwakyembe said TIB Development Bank signed a memorandum of understanding in February with the Development Bank of Southern Africa worth $130 million to support infrastructure in Tanzania.
The country has also secured $164.3 million from the Netherlands for the expansion of the Julius Nyerere International Airport.
Original article by Adam Ihucha