Tanzania’s $2.2 billion trade route to DRC threatens Kenya’s trade influence in East Africa – experts say

Tanzania’s $2.2 billion trade route to DRC threatens Kenya’s trade influence in East Africa – experts say

Tanzania’s current administration has placed a huge emphasis on growing its economy via establishing trade relationships both within Africa and with global partners.

This business-like approach is so much so engraved in the ideology of the nation’s current government that in December, it was announced that Tanzania would be partnering with China to build the final section of the 2,102 km SGR railway extending to the Democratic Republic of Congo.

“The main objective was to link Tanzania to Burundi and the Democratic Republic of Congo,” said Samia Suluhu Hassan, the president of Tanzania.

“This is a railway that is going to open up Tanzania and link it to the eastern side of DRC where there is a lot of cargo that needs to be transported on the ports on the Indian Ocean to the global market,” the president added.

This railway deal is currently set at $2.2 billion and is slated to be completed in 2026. If completed, the SGR railway would be the most ambitious in Africa, standing as the longest stretch of the modern railway line on the continent.

However, according to a recent report by The Citizen, a Tanzanian-based news agency, this “standard gauge railway (SGR) to neighboring landlocked countries has put Kenya’s plan to control East Africa’s logistics corridor to a fresh test months after Kenya’s line hit a dead end in Naivasha, reigniting the rivalry between the two biggest nations in the region.”

In effect, the trade route competition between the two East African nations, Kenya and Tanzania would be intensified.

In 2014, Kenya signed a tripartite agreement with the governments of its East African neighbors, Rwanda and Uganda to build a standard gauge railway from Mombasa through Kampala Uganda to Kigali Rwanda.

However, this project was cut short, due to a last-minute fallout with its Chinese construction partners in China.

Experts have noted that for Kenya to maintain its trade prominence on the East African Bloc, it must move to complete the last phase of this railway.

“Whoever completes the railway fast—Tanzania or Kenya—will dominate the trade in the region,” said Mr. Ikiara, an economist and former transport permanent secretary in President Mwai Kibaki’s government.

“At the moment, it looks as if Tanzania might win East Africa’s railway race by linking cargo markets in Burundi, Rwanda, the DRC, and Uganda with Tanzanian seaports,” Zajontz, a research fellow at the Centre for International and Comparative Politics at Stellenbosch University in South Africa, said.

Source: africa.businessinsider.com

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