SPEECH BY H.E. JAKAYA MRISHO KIKWETE, PRESIDENT OF THE UNITED REPUBLIC OF TANZANIA, DURING THE WORLD ECONOMIC FORUM’S ALIGNMENT MEETING ON DEVELOPMENT OF CENTRAL CORRIDOR HELD IN DAR ES SALAAM, TANZANIA, ON 15TH APRIL, 2014
Hon. Dr. Harrison Mwakyembe, Minister for Transport, United Republic of Tanzania;
Hon. Prof. Silas Lwakabamba, Minister for Infrastructure, Republic of Rwanda;
Hon. Eng. Virginie CIZA, Minister for Transport, Public Works and Equipment, Republic of Burundi;
Hon. Justin Kalumba MWANA NGONGO, Minister for Transport and Water Ways, Democratic Republic of Congo;
Hon. Eng. Abraham Byandala, Minister for Transport and Works, Republic of Uganda;
Dr. Donald Kaberuka, President of the African Development Bank;
Dr. Richard Sezibera, Secretary General of the East African Community;
Dr. Stogomena Tax, Executive Secretary of SADC;
Dr. Ibrahim A. Mayaki, President, NEPAD Agency;
Mr. Philippe Dongier, World Bank Country Director for Tanzania, Uganda and Burundi;
Distinguished Guests;
Ladies and Gentlemen;
It is a pleasure for me
to welcome you all to Tanzania and Dar es Salaam.I thank the organizers
for affording this rare opportunity to speak at this all important World
Economic Forum Alignment Meeting on Development of the Central
Corridor.
This meeting could not
have been organized at a better time, than this.As a matter of fact such
people of this region have been waiting for this type of action for a
long time.Besides that, this meeting is part of the preparations for the
World Economic Forum for Africa meeting scheduled for 7th to 9th May,
2014.The work of this meeting will therefore have a special
significance to the implementation of the Priority Action Plan of
Programme for Infrastructure Development in Africa (PIDA) which has its
roots from the World Economic Forum in Africa held in Addis-Ababa, from 9th to 11th May, 2012.
It is gratifying to see
high level participation of four important institutions among us: the
EAC, SADC the AfDB, the NEPAD Agency and the World Bank. It is
heartwarming indeed, to have you with us because you are critical factor
on the success of the agenda at hand.We look forward to your continued
involvement until we reach the objectives of this initiative.
From WEF Addis Ababa to WEF Abuja: Private Sector andAfrican Infrastructure Development
Distinguished Delegates;
The 2012 World Economic
Forum for Africa was a turning point with regard to how we approach the
question of development of infrastructure in Africa. It came to our
awareness and realization that we need to bring in Private Sector in
infrastructure development in Africa.Such a perspective had not been
embraced before by governments in Africa, with each one trying to
shoulder the cost alone.
I commend the
joint-initiative of the WEF, the AfDB, the AU Commission and NEPAD (New
Partnership for Africa's Development) for taking forward the agenda. As a
follow up, an African Strategic Infrastructure Initiative (ASII) was
formally launched in Johannesburg on the 9th of July, 2012, with the
formation of the Business Working Group (BWG), a platform for African
infrastructure development strategies and initiatives.
I am pleased with the
work of the Business Working Group for identifying projects with high
potential for short-term acceleration. I am particularly delighted with
the choice of the Central Corridor in this regard.I also thank you for
affording my country the honour of preparing a Wider Concept Note on the
development of the Central Corridor.
Importance of the Transport Corridors
Distinguished Delegates;
The importance of
transport corridors as game changers for regional growth and development
need not be over-emphasized. Studies after studies have concluded that
many landlocked developing countries are among the poorest in the world.
It is said, out of 31 such countries, 16 are classified as least
developed and half of these are in Africa.
These countries are said
to be penalized annually by 1.5 percent reduction in average growth
compared to coastal states by simply being landlocked. It goes without
saying that: growth of landlocked countries depends on the growth of the
coastal countries. That implies the ability of the coastal countries to
put in place infrastructure for trade facilitation, as a pre-requisite
for development of the land locked countries.
Distinguished Delegates;
The coastal states have
never fallen short of good will in facilitating the landlocked
countries.They have been putting in place supportive infrastructure
because they too, are primary and secondary beneficiaries of such
infrastructure. It is the difficulties of raising financing of these
infrastructures that has been holding back coastal states particularly
the Least Developed Countries, from rising to challenge effectively.
Efforts to exploit joint
regional financing mechanisms has also proven unsuccessful.Experience
has shown that it is easier to arrange investment for national
infrastructure than for regional ones. Our experience on the ongoing
construction of 11,174 kilometers of road to tarmac level
serves as a good lesson. It is for this reason that, we welcome this
approach of partnering with the private sector for regional
infrastructure development.
Status of Central Corridors
Distinguished Delegates;
The Central Corridor is
located at the strategic geographical position which makes it a natural
choice as a major trade route for countries of the Eastern and Central
African regions. Indeed, for many decades the Dar-es-Salaam Port,
Tanzania’s roads and railways have served the neighboring countries of
Uganda, Rwanda, Burundi and the Democratic Republic of Congo (DRC).
Economies of countries served by this corridor have shown strong GDP growth rates of between 4 and 8 percent.Transit demand is forecasted to increase from2.7 million to 9.8 million tons by 2030. The Dar es Salaam port captures 14 percent of imports and exports of these countries.As a result the throughput at the port has increased from 7.4 million tons in 2007 to 13 million tons by December 2013.
The Central Corridor
also enjoys one of the best roads in East Africa.The Dar es
Salaam-Rusumo/Kabanga and Dar es Salaam-Mutukula (at the borders of
Rwanda/Burundi and Uganda respectively) are fully paved. The presence of
these routes makes the Central Corridor a competitive option for cross
border trade through the Port of Dar es Salaam.
Distinguished Delegates;
Rwanda and Burundi are
connected to the Port of Dar es Salaam by the Central Corridor that
consists of several routes. These routes include an all-road unimodal
option from Dar es Salaam to Bujumbura and Kigali. Alternatively, cargo
flows along the intermodal routes made up of rail from Dar es Salaam to
Isaka then trans-shipped to Kigali and Bujumbura. Rwanda and Burundi are
now working together with Tanzania to extend the central railway line
from Isaka to Kigali on wards to Keza – Musongati in Burundi.
The Republic of Burundi
has discovered enormous deposits of nickel. The corridor is about to
transport more volumes of heavy minerals within the coming two to three
years.Our neighbor Burundi may in the coming 2 or 3 years start
exporting between 1.5 million tons to 3 million tons of
nickel concentrates a year. In the same development, we expect two
nickel mines in Tanzania (Kabanga and Dutwa) to be operational in the
same time span. It is likely that nickel processing would require
importation of huge volumes of sulphur per annum. All these volumes are
expected to pass through the Central Corridor.
Challenges Facing Central Corridor
Distinguished Delegates;
Despite the great
potentials and opportunities presented by the Central Corridor, all is
not rosy in terms of both effectiveness and efficiency. Transport
inefficiencies in this region, have contributed to prohibitively high
transport costs, and impede the region's ambition to realize its overall
vision for socio-economic development.
The design capacity of the Tanzania Railway Limited (TRL) line is to move traffic of about 5million tons per year. Unfortunately, this capacity has never been achieved as the maximum capacity reached so far is only 1.4 million tons of
cargo moved by train as the performance record in 2002. While there are
prospects of transit cargo to double up within the coming few years, as
the region braces itself to start exporting millions of tons of copper
and nickel a year, the existing 2,707 kilometers Central railway, cannot in its present condition cope with the growing volume of cargo along the central corridor.
Distinguished Delegates;
It suffices to say,
both our roads and the central railway line lead to the Port of Dar es
salaam needs a turn around. It needs refurbishing. We still need to
expand our berth capacity, modernize our cargo handling facilities as
well as procedure to cope with the growing volume of throughput. We have
indeed embarked on the exercise, but in a limited way by using our
yearly budgetary allocations and development partners' support. Thanks
to the World Bank, the AfDB and JICA. Apart from the measures we have so
far taken to enhance port efficiency, reliability and security. We
thank to Trade Mark East Africa, DFID and the World Bank for the
continued support to improve port efficiency.
Efforts Undertaken by Tanzania to Improve the Central Corridors
Distinguished Delegates;
Tanzania has continued
to fulfill her regional responsibility to our landlocked neighbors, and
international obligations under the Almaty Programme of Action.There are
number of efforts we have put in place which are short and long-term
plans. Our short-term plan is to rehabilitate the railway line by
reinforcing its formation, strengthening its bridges, removing lighter,
old, worn out rails, fasteners, sleepers and installing new heavier
rails, sleepers and ballast. We have so far done almost600 kilometers. Thanks to the World Bank and JICA.
We have continued to make available ourDar es SalaamPort as an export and import gateway for the landlocked countries of Rwanda, Burundi, Uganda, Zambia, Malawi and the DRC. Some of the initiatives which are underway includes;
a)Dredging of the Dar es Salaam port entrance channel;
b)Construction of Berths 13 and 14;
c)Strengthening and deepening of Berths 1-7;
d)Development of the Roll on – Roll off (RO-RO) Berth at the Dar port;
e)Plan to develop Kisarawe Freight Station with intention to decongest container traffic at the Dar port and development of new port at Bagamoyo among others.
The government decided
to give due weight to these initiatives through mainstreaming them in
the Big Results Now (BRN) Port Initiatives, with the aim to ensure their
timely implementation. We have earmarked to increasethroughput of the Dar es Salaam Port from the current 13 million tons per annum to about 18 million tons annually
by end of 2015. Furthermore, it is targeted to reduce time taken by a
truck to transport a transit container from the Dar es SalaamPort to the borders of Burundi and Rwanda to 2½ days from the current 3½ daysby the end of 2015.
Distinguished Delegates;
But these short-term
measures will not enable us to service a growing regional economy
effectively and efficiently. The Dar es Salaam Port for example,
currently handles 13 million tons of freight per year but hardly 2 percent of
the freight is carried on rails, the rest is transported by trucks,
drastically shortening the lifespan of most of our paved roads.
It is against this
background that we came up with a long-term plan or strategy to upgrade
the central line to standard gauge. Part of the line i.e. Dar es Salaam –
Isaka – Keza – Kigali/Gitega – Musongati (1,591 kilometers long), is a
joint project by Tanzania, Rwanda and Burundi. It is estimated to cost
us a minimum of USD 4.13 billion. We have jointly done all the
preliminary studies. With the completion of the detailed study recently,
we are now on procurement of Transaction Advisor. Thanks to the AfDB
for its support.
Tanzania and Burundi
have also a bilateral arrangement to construct a 200 kilometers standard
gauge railway between Uvinza in Tanzania and Musongati in Burundi
expected to cost us USD 550 million.
Private Sector and Central Corridor
Distinguished delegates;
The central
corridor projects I have briefly narrated cannot be successfully
implemented within the context of the traditional method of financing
infrastructure development. Government financing alone may not easily
raise all the money required.We do not have the money nor can we easily
get someone to lend us so much money.We have tried this option over the
years without much success.
It is time we encouraged
further private sector participation. It remains an alternative and
viable option to minimize the public financing gap in infrastructure
development. I have vested my hopes in this meeting which I believe will
take us to the next level in terms of unlocking private sector funding,
identifying cross-border regulation gaps and building private-public
sector confidence.
Distinguished Delegates;
It is befitting that this alignment meeting is taking place at this point in time.
We have undertaken to put in place conducive environment to facilitate
private sector to join our efforts.The government has put in place the
National Public-Private Partnership (PPP) Policy in 2009, in 2010 we enacted the Public-Private Partnership Act, Cap 403 and Regulations in 2011. In addition, feasibility
studies have been undertaken while various identified PPP projects have
been advertized for private sector to show interest. We will continue to work together with our Central Corridor member states in soliciting funds to invest in the key transport infrastructure projects along the corridor.
The Government, in partnership with the OECD and NEPAD, undertook a review of its investment policies to support the national strategy for economic reform and improve the business climate to attract more investment in key sectors, such as infrastructure and agriculture. The review was launched on 31stJanuary, 2014 and will be used to update all investment policies; andcontinue
with implementation of Government Roadmap on the Improvement of the
Investment Climate by undertaking administrative measures with very
limited cost implications while reducing hurdles of significant costs to local and foreign investors. These measures go along with automated and electronic payment systems that minimize human interference and discretionary powers.
Way Forward
Distinguished Delegates;
I am optimistic that the
groundwork we have undertaken as a region for the implementation of the
Central Corridor Infrastructure projects through public private sector
cooperation have caught the attention of the international business
community. I thank the WEF in collaboration with the AfDB, the AU
Commission and NEPAD for championing this noble cause for Africa's
economic development.
As corridor member
states with a lot to gain from improved inter and intra-regional trade,
let us continue to plan, discuss, decide and implement together our
infrastructure development projects. Our numbers would always attract
the attention of serious investors.
Conclusion
Distinguished Delegates;
I am optimistic that our
regional efforts to implement the Central Corridor Infrastructure
projects through public private partnership is now at a point of
take-off and definitely will bear good results in the very near future.
We believe that WEF strategies under this new model of Central Corridor
to be the African pilot project for accelerating investments will
support the current potential infrastructure projects along the corridor
to secure strategic investors soon. What I wish to share with our
colleagues from the Corridor member states is to continue working
together under these efforts so as to achieve the expected regional
investment goals. Everything is possible if we plan, discuss, decide and
implement together.
This is the opportunity
for our governments to interact with other stakeholders including the
private sector, with a view to coming up with a programme of action for
the development of the central transport corridor.
To conclude my remarks, I
have taken note of the fact that you have a rather long and demanding
agenda in front of you and, for that reason, I wouldn't like to keep you
any longer than necessary. It is therefore my singular honour and
pleasure to wish you a very fruitful meeting and to declare that the
Alignment meeting on the Central Corridor is now opened.
Source by www.wavuti.com
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