Tanzania Starts Construction Works At Bagamoyo Port And Special Economic Zone

The Tanzanian Government has recently announced that construction works have started at Bagamoyo port and Special Economic Zone (SEZ) in Tanzania’s coastal northern region to make Tanzania a trade and transport hub in East Africa.

The project is the result of a Memorandum of Understanding (MoU) signed in 2014 between the Tanzanian Government, the Sultanate of Oman through the State General Reserve Fund (SGRF) and China Merchants Holding International (CMHI), a Hong Kong based company involved with port operations, general and bulk cargo transportation.

The Bagamoyo Port and SEZ’ total cost has not been disclosed yet by any of the MoU’s members, but it is known to be around the USD 11 billion with the majority being financed by the Chinese Government through the China Development Bank (CDB).

The whole project’s construction works including the port, SEZ, roads, and railways are expected to last 10 years.

The Bagamoyo port will be able to handle shipping traffic from mega deep sea ships with container vessels size of 8,000 twenty-foot equivalent units (TEUs) with the possibility of being expanded and is expected to process 20 million containers annually.

The port will also reduce burden on Dar Es Salaam port’s that is working over capacity with traffic from mega deep sea ships having increased from 26.0 million gross register tonnage (GRT) in 2011/12 to 26.4 million GRT in 2012/13, according to Tanzania Ports Authority (TPA) latest statistics.

The Bagamoyo SEZ is expected to host more than 1,000 factories and raise the current labor demand 31,923 generated by 130 registered companies at EPZs, to 500,000 jobs.

SEZs were established in Tanzania in 2006 to promote quick and significant progress in economic growth, export earnings and Foreign Direct Investment (FDI).

Among the benefits the SEZs offer to investor are exception on corporate and withstanding tax for the first ten years, on custom duties for any good used for purposes of development of infrastructure, on value added tax (VAT) on raw materials, capital goods and administrative vehicles, and unconditional transferability of profits, dividends and loyalties abroad.