Former Tanzanian president Jakaya Kikwete and Chinese president Xi Jinping in 2013 signed an agreement to develop Bagamoyo mega port project. The Port to be developed jointly by CMHI and Oman’s State General Reserve Fund with a capacity of 20 million containers, was expected to be the largest port in Africa by transforming Tanzania into a regional business hub and foster greater regional connectivity and integration. The government of Tanzania announced in October 2017 that the port would be operational in 2020
After President Dr. John Pombe Magufuli came into office in November 2015, the project was put on the backburner as expansion of other Tanzanian ports such as; Dar es Salaam, Tanga and Mtwara port were placed on top priority. in June this year, Tanzanian President suspended the plans to construct the Port, after talks over the project broke down over the terms of the deal, which the present Tanzanian president John Magufuli described as “exploitative and awkward”. The contentious terms of the project included ‘guarantee of 30 years and a lease of 99 years’ and that the Tanzanian Government should ‘not question whoever comes to invest there once the port is operational.’ The government of Tanzania has recently issued an ultimatum to China Merchants Holdings International (CMHI), one of the main investors, demanding that it accept revised terms and conditions or walk away from the project. The revised terms include a 33-year lease instead of the 99-year,no tax holiday ,no subsidised rate for water and electricity, regulatory oversight of any CMHI businesses introduced to the free trade zone,no restriction of the Tanzanian government’s right to develop other ports, etc.
The breakdown of the negotiations is another example of predatory Chinese loans and practices facing backlash, especially in East African countries, where most of the BRI projects are concentrated.
