President Magufuli calls for cheaper loans, debt cancellation

Saturday January 09 2021
Magufuli pic

President John Mgufuli shakes hands with China’s State Councillor and Foreign Affairs Minister Wang Yi after the contract-signing ceremony in Chato District, Geita Region yesterday for the construction of 341km-long standard gauge railway sections by two Chinese companies. PHOTO | STATE HOUSE

By Alex Nelson Malanga

Dar es Salaam. President John Magufuli yesterday called for concessional loans to be used in financing development projects, as well as cancellation of debts which Tanzania owes China.

The Head of State made the call on China yesterday in Chato, Geita Region during his talks with Chinese Foreign Affairs Minister Wang Yi, who was in the country on a-two day official visit since Thursday.

The government of Tanzania requested China to support its Ruhudji and Rumakali hydroelectric power projects in Njombe Region, as well as a highway project in Zanzibar, the Makutupora-Tabora (370km), and the Tabora-Isaka (161km) sections of the standard gauge railway (SGR) project.

Upon completion of the Rumakali and Ruhudji hydropower projects, the plants would have the capacity to generate 222MW and 358MW power respectively.

On debts, Dr Magufuli asked for the cancellation of debts related to the construction of police officers’ houses amounting to $137 million; $15.7 million that was used in the construction of the Tanzania Zambia Railway in the mid-1970s, and $15 million used for construction of the Tanzania-China Friendship (Urafiki) Textile Mill in Dar es Salaam in 1968.

“I have pleaded with them (China) to cancel the debts because not only China is our friend, but they are also rich,” said President Magufuli. “Our friendship with China is firm. I am optimistic our request will be accepted.”


Works and Transport minister Leonard Chamuriho called on China to support Tanzania in the implementation of the Makutupora-Tabora and Tabora-Isaka sections of SGR.

“We call upon the government of China to join us in the implementation of those projects. We request it to give a nod to the Chinese financial institutions to offer concessional loans so that the entire Dar es Salaam-Mwanza railway can start working sooner than later,” pleaded Dr Chamuriho.

He said the government was committed to ensuring that the transport sector created an enabling environment for production activities and shaping the economy, in turn.

That was why, he explained, in the current financial year the government had set aside some Sh4.784 trillion for the construction of roads, railways, ports, and purchase of one cargo-only aircraft, among others.

Chinese companies have under the Forum on China-Africa Cooperation (Focac) benefited from the opportunities emanated from the implementation of various projects worth Sh21 trillion in the space of ten years, noted Dr Chamuriho.

Recently, projects implemented by Chinese companies included the Ubungo Interchange, the Nyerere Bridge, improvement of the Dar es Salaam Port and the construction of the Kalema port in Katavi Region.

For his part, Mr Wang, who doubles as the Chinese State Councillor, promised President Magufuli to convey his request to Chinese President Xi Jinping.

“In China we have a saying: If you want to get quick development, you must build roads and other transport infrastructure and that is what China does,” noted Mr Wang.

“I’m optimistic Magufuli’s efforts in investing in infrastructure will be fruitful.”

Mr Wang witnessed the signing of the contract for the construction of a-341 km fifth section of the Standard Gauge Railway (SGR) from Mwanza to Isaka.

A Sh3.0677 trillion worth project to be completed in January, 2024 would be constructed by the China Civil Engineering Construction Corporation (CCECC), according to the Tanzania Railway Corporation (TRC) director general Masanja Kadogosa.

CCECC which won the tender that involved more than 18 international companies, would work in cooperation with the China Railway Construction Corporation (CRCC).

Speaking earlier, Dr Magufuli voiced his commitment to cementing ties with China, saying Tanzania will continue cooperating with China as the duo are relatives.

The two countries have enjoyed a very special relationship that dates back from the days of the generation of leadership of the founding fathers of these nations.

“It is high time Tanzania and China did all in their power to build a strong economy and cement bilateral relations,” said President Magufuli.

Speaking of strengthening trade relations with China, Dr Magufuli said it is high time investors and traders from both parties tapped the potentials available in the two countries.

He said, it is time for Tanzania to use the Chinese market to sell their cashew nuts, fish, coffee, cotton and cassava.

“China has 1.5 billion people. Let us make optimal use of this huge market by exporting our products, particularly those with value-addition,” suggested the Head of State.

On the other side, he called on Chinese investors to come and invest in Tanzania, saying the Tanzanian market size was big enough to make them stay.

He said considering the fact that Tanzania is a member of the East African Community (EAC) and Southern African Development Community (Sadc), doing business with Tanzania meant conducting business with about 500 million people.

Going by the available official data, the bilateral trade and investment between China and Tanzania stood at $4.179 billion (Sh9.6 trillion) in 2019.

China’s accumulative direct investment to Tanzania has exceeded $7 billion (Sh16.1 trillion), with more than 700 investments projects providing around 150,000 direct and indirect jobs for Tanzanians.

China also has been supporting Tanzania in the area of Science, Technology, Innovation and Information and Communication Technology (ICT) initiatives in Tanzania.

Through its telecoms giant Huawei, China has been supporting various initiatives to up-skill Tanzanian youth in the ICT sector, as a result two Tanzanian youths emerged among global ICT competition winners.

The global second-placed winners were recently awarded by Prime Minister Kassim Majaliwa.