A new era for East Africa as Uganda, Burundi rush to cut deals with Tanzania

Despite international criticism over his recent declaration that prayers had ended coronavirus in his country, President John Pombe Magufuli appears to be the most sought-after leader in East Africa today for big infrastructure deals.
Tanzania has of late become a meeting point to cut infrastructure deals, a favourable position to out-compete Kenya as East Africa’s trade hub. All East Africa’s landlocked countries are banking on Tanzania to fully open up their economies.
Tanzania and Burundi are in talks over the construction of a joint nickel processing plant, Tanzania’s President John Magufuli has said.
Magufuli revealed the deal shortly after he had introduced visiting Burundi’s President Evariste Ndayishimiye to a public rally at Lake Tanganyika stadium in Kigoma region on Saturday September 19, 2020.
“Today we will hold talks with the Burundian leader to see how we can speed up the construction of the joint nickel processing plant. Tanzania and Burundi are producers of nickel that is exported unprocessed,” Magufuli told the rally.
The visit by the Burundian leader came barely a week after Uganda’s President Yoweri Museveni and his Tanzanian counterpart signed a deal on September 13, 2020 that will see the two countries build a 1,445km, $3.5bn crude oil pipeline. The oil pipeline deal was after Kampala signed a host government agreement with French oil giant Total.
The pipeline, which will be the first of its kind in East Africa, will connect Uganda’s oil-rich Hoima region with the Indian Ocean through the Tanga port in Tanzania.
About 80 percent of the pipeline will go through Tanzania. That means the project is expected to create thousands of jobs in Tanzania, and likely a good reason to sign a similar deal with Total. President Magufuli added that the country would utilize Uganda’s experience to explore for oil in several of its regions.
The Tanga route, according to feasibility studies, was deemed the cheapest for Uganda to transport its oil from the production point in Hoima to the international market. It has a convenient flat terrain, not interrupted by other activities, as well as lowest environmental challenges.
Uganda chose the Tanzania route to the sea, abandoning the plan to build an oil pipeline jointly with Kenya mainly due to concerns of land compensation costs in Kenya.
In another major infrastructure deal Tanzania signed an agreement to link its new railway line to Burundi and the DRC, while a similar deal with Rwanda is said to be in its final stages.
In May 2018, Rwanda and Tanzania agreed to redesign their joint railway plan, which will start at the Isaka dry port and end in Kigali, to use electric powered trains.
The Isaka-Kigali line will cost $2.5bn, with Tanzania paying $1.3bn and Rwanda $1.2bn. Rwanda will then incur additional costs to extend it to Rubavu and Bugesera, where it is constructing its largest international airport.
Tanzania entered this side of the logistics infrastructure race a bit later than her neighbours, Kenya and Ethiopia. Both Nairobi and Addis Abbaba are now connected to coastlines by Chinese-built standard gauge railways (SGRs).
From the outset, Tanzania, which has always gone it alone in the region – by not, for example, signing the region’s railway master plan in 2008 – chose to work on its rail project from a different angle.
Unlike Kenya and Ethiopia, both of which ended up heavily indebted to China for their new railway lines, Tanzania sourced part of its railway financing from the Export Credit Bank of Turkey and Standard Chartered Bank.
The railway deals give Tanzania an upper hand in East Africa, as its Central Corridor blueprint will make its commercial capital of Dar es Salaam the primary route to the sea for the region’s landlocked nations.
It also shows the far-reaching effects of the collapse of the ‘coalition of the willing’, a loose grouping of three East African countries – Kenya, Rwanda and Uganda – that had agreed in 2013 to construct mega-infrastructure deals together.
The coalition collapsed as diplomatic relations between Uganda and Rwanda worsened, and Tanzania’s new president, John Magufuli, worked to rebuild economic relations with the country’s neighbours.
Uganda is Kenya’s trade route to Rwanda and eastern DRC, and the frosty relations between the two, which saw border closures, affected trade in the region. The biggest beneficiary has been Tanzania, which shares direct borders with Rwanda, Burundi, the DRC, and Uganda.
Uganda chose the Tanzania route to the sea, abandoning the plan to build an oil pipeline jointly with Kenya. It cited, among other reasons, the costs of land compensation in Kenya.
Rwanda also pulled out of the railway line plan because, as its then finance minister, Claver Gatete (now minister of infrastructure), said: “The Kenyan route would be expensive and time consuming.”
Construction of strategic infrastructures has been among President John Magufuli top priorities ever since he assumed the presidency on November 5, 2015.
The head of state, who before his election to Tanzania’s top office served in the works ministry for the bigger part of his 20 years spell at ministerial level, has initiated a number of projects that aimed at lifting the country’s socio-economic status.
Some 30 infrastructure projects are in the works. Dodoma, Tanzania’s capital-in-name-only, is being overhauled. It will have Africa’s largest stadium. A hydroelectric dam in the south is more modestly conceived: it will merely be the continent’s joint second-biggest.
As his first presidential term edges towards the end, Dr Magufuli is touted for overseeing key infrastructure projects, notably the construction of the state-of-the-art Ubungo interchange, Tazara flyover, new Selander Bridge and the expansion of Morogoro road all in Dar es Salaam.
Magufuli has also poured cash into Air Tanzania, the loss-making state-owned airline, which has recently bought half-a-dozen new planes, including a Boeing 787 Dreamliner.
Such mega-projects go down well domestically. They foster pride and are taken as evidence that the president is serious about giving Tanzania a modern economy by 2025.
For a president who won election in 2015 by the smallest margin in Tanzania’s history, they are also potential vote-winners.
However, Magufuli also takes value-for-money seriously. He has cancelled two deals with China: the building of Tanzania’s first electric railway line linking the main commercial city Dar es Salaam to the capital, Dodoma, about 500km (310 miles) away and the construction of East Africa’s biggest port in Bagamoyo, once the capital of German East Africa, at a cost of $10bn (£8bn).
Mr Magufuli said only a “madman” would accept the financial terms negotiated by his predecessor Jakaya Kikwete’s government for the building of the port.
He has long blamed selfish leadership and a failure to put the nation first for Tanzania’s underdevelopment.
But it is Western powers that Mr Magufuli is most suspicious of, and he accuses local “puppets” – usually a cast of opposition politicians, rights activists and critical journalists – of championing the interests of their “masters”.
Mr Magufuli has not been on a single official visit to a Western nation since coming to power. Nor has he attended, as president, sessions of the UN General Assembly, which other African leaders see as an opportunity to spell out their vision to a global audience.