Dar es Salaam. China’s total direct investment in Tanzania soared from $700 million in 2011 to $2.1 billion last year, turning the world’s second biggest economy into the biggest foreign investor in the east African country, it has emerged.
According to Imara Equity Research, this investment is focused on railways, ports, buildings, road construction, gas pipelines and wind power farms.
This investment has not only boosted economic growth of Tanzania, but has also created more than 150,000 direct jobs, according to the research house. “Bilateral trade between China and Tanzania has also soared in the same period, reaching over $2.5 billion by the end of 2012,” Imara said in its latest report, citing official data.
Open Data for International Development (AidData) also shows that Beijing has emerged as Tanzania’s single biggest trading partner in 2012, accounting for 15 per cent of Dar es Salaam’s trade. Lately, China and Tanzania have taken on up to 19 projects worth billions of dollars. Some of these projects have been financially backed by the Chinese state-owned Exim Bank to the tune of $10 billion. One of these deals involves the construction of the multi-billion-dollar port at Bagamoyo, northwest of Dar es Salaam, the capital of Tanzania.
Set to be the largest and most modern port in Africa, the harbour is expected to be in operation by 2017. It will handle 20 times more cargo than the Dar es Salaam Port, which is Tanzania’s current major import and export gateway in East Africa.
China-state-run-firm, Merchants Holdings, has also won a deal to construct a 34km road between Bagamoyo and Mlandizi, linking the port to Tanzania’s internal rail network and the Tanzania-Zambia Railway. Additionally, a Chinese $1.2 billion soft loan transaction for a 523km line connecting Dar es Salaam and the Mtwara gas field was endorsed in September 2012 between Tanzanian government and the Exim Bank.
Between 2001 and 2011, mineral-rich Tanzania received funding worth $ 4.6 billion from the Chinese. According to Imara, China’s state-owned Sichuan Hongda Group got into a $3 billion partnership with Tanzania’s National Development Corporation to develop a major iron-coal mine. Beijing companies also own a bigger share of Tanzania’s civil engineering industry. Private Chinese companies have also stepped up investments into Tanzania.
Meanwhile, European stocks advanced on Friday, boosted by news of recovering economic growth across the eurozone, while dealers shrugged off fresh political turmoil in Italy. Frankfurt’s benchmark DAX 30 index of leading companies gained 0.72 per cent to 9,663.78 points and in Paris the CAC 40 added 0.58 per cent to 4,336.94 points.
Milan’s FSTE Mib index rallied 1.47 per cent to 20,406.42 points, as the anticipated resignation of Italian Prime Minister Enrico Letta sparks reform hopes in the debt-laden eurozone nation, analysts said. London’s FTSE 100 index added a marginal 0.04 percent to 6,662.09 points in late morning deals, compared with Thursday’s closing values.
However, the British pound rallied to $1.6716 - the highest since early May 2011 - lifted after the Bank of England’s decision earlier this week to overhaul its forward guidance on interest rates and hike its economic growth forecasts. The European single currency rose to $1.3696 from $1.3678 late in New York on Thursday, as dealers focused on bright data. The ruble fell to a record low level against the euro.
“Activity continues to recover in the eurozone,” said Brenda Kelly, chief market strategist at trading firm IG. “While the political shenanigans in Italy are providing a Groundhog Day backdrop to proceedings, investors are choosing to focus on the better-than-expected GDP numbers.” The eurozone economy grew 0.3 per cent in the fourth quarter of 2013, enough of an improvement on 0.1 per cent in the previous quarter to suggest that modest recovery remains on track, official data showed.
Market expectations had been for growth of between 0.2-0.3 per cent in gross domestic product (GDP). In the wider European Union, the economy expanded 0.4 per cent, after 0.3 per cent in the third quarter, the Eurostat statistics agency added.
Anglo revealed on Friday that net losses narrowed to $961 million last year, compared with a loss after taxation of $1.470 billion in 2012, However, the group’s performance was weighed down by a vast $1.9-billion impairment charge on the value of assets, soft demand, and strikes in South Africa.
In commodity markets, gold forged a three-month high at $1,310.70 per ounce, boosted by the weak dollar, strong Chinese demand and speculative buying, analysts said. (AFP/Agencies)