China Africa Relations - Foundation Office Tanzania
New and Old Friends
This article provides a brief overview of China’s activities in the United Republic of Tanzania, spanning from economic to political connections, and connects them to general trends of the Chinese outward-going strategy in Xi Jinping’s New Era.
Today China is the biggest investor in Tanzania, as well as the largest exporter of goods to Tanzania. The investment volume reached 7 billion USD in 2019, trade volume between China and Tanzania reached 3.9 billion USD. China ranks as Tanzania’s fifth-largest export destination. However, it receives only 3.9% of Tanzanian’s total exports. Unfortunately, the relationship with this important investment and business partner is not at all equal. Tanzanian Ambassador to China Mbwela Kairuki states that the main challenge is the huge trade imbalance between both economies, for every dollar exported to China, Tanzania receives 10 USD worth of imports from China (CAP, 2020). Hence, some African scholars criticize the current practice of cooperation with China. Arguing that China is gaining much more out of its investments than its partners (Kinyondo, pp. 159-160). This critique, combined with the aforementioned debt trap debate, has influenced Tanzanian political decisions in the past.
One of China’s signature investments in Tanzania was supposed to play a key role in East Africa’s connection to the OBOR, namely the Bagamoyo Port project. Announced during Xi Jinping’s visit in 2013 this 10 billion USD project would have been the biggest port in East Africa and open up the region to global trade. Investors for the project included China Merchants Holdings International and Oman’s State Government Reserve Fund. In January 2016 however the project was brought to a standstill by order of the late President John Pombe Magufuli as he halted further planning of the project due to his disapproval of the unfavorable 33-year guarantee and 99 years lease terms submitted by the port operator China Merchants Holdings International. A move that appeared quite unusual in the light of China’s and Tanzania’s long-standing historical friendship. Magufuli stated that the agreement had “…tough conditions that can only be accepted by mad people,” (ENR, 2019). He believed the deal to be unbeneficial to Tanzanian interests as the agreement would avail China full control of all cargo and logistics as well as give tax benefits to Chinese companies and prohibit Tanzania from building any other new port on its coastline between the regions of Tanga and Mtwara (ENR, 2019). The cancellation of this deal makes Tanzania one of the few developing countries that openly criticized China's investments and declined billion-dollar investments. Interestingly repercussions and responses from China have been very rare, almost nonexistent. Instead, China appears to have successfully persevered the conflict and revived project discussions with the current Tanzanian President Samia Suluhu Hassan who remains convinced of the benefit and necessity of the port project (Xinhua, 2021). It is however unclear if the project scope will be similar.
Another project sponsored by China is the new library for the University of Dar es Salaam (UDSM) which covers a floor area of 20,000 square meters. It was constructed by China IPPR Engineering International Co., Ltd. a state-owned enterprise (SOE), and Jiangsu Jiangdu Construction Group Co., Ltd. and finished in 2018 for a total sum of 41 million USD provided by China Aid. The opening ceremony was attended by late President Magufuli and China’s ambassador to Tanzania Wang Ke (Xinhua 2, 2018). Adjacent to the library a new Confucius Institute has also been constructed. Further details on its role are provided in the following pages of this report. Unfortunately, large parts of the library still remain empty to date as UDSM lacks the number of books and resources required to equip the whole library to full capacity. Observations made of the library from personal visits indicate that most of the signs, floor plans, etc. within the library are only available in Chinese with some exceptions also present in English or as pictograms. The national language of Tanzania, Kiswahili, is only used on small paper signs deployed after the construction. This situation leaves the visitor rather puzzled and remains a firm reminder to all who visit of who paid for and built this new library.