Skip to content

Tanzania Reportedly Terminated 10 Billion Belt and Road Loan Agreement

China’s “Belt and Road” economic strategy faced a setback. African media reported that Tanzanian President John Magufuli terminated the US $10 billion loan with China that was to be used to expand the Bagamoyo port.

China originally planned to provide the loan to Tanzania to expand the port of Bagamoyo, on the condition that China was granted the right to lease the port for 99 years. The Tanzanian government would not have the right to comment on China’s activity during this period. The agreement was signed by former Tanzanian President Jakaya Kikwete, but the media report quoted Magufuli as saying, “Only a drunk person would accept some of those terms.”

According to the report, since taking office in 2015, Magufuli decided to resume negotiations with China hoping to reduce the lease term from 99 to 33 years. In addition, China must obtain permission in advance to carry out related business activity in the port. Now because China has not started the talks within the deadline that Magufuli provided, Tanzania announced the termination of the agreement.

The China Merchants Group managed the Bagamoyo Port project.  The Oman Sovereign Fund and the Tanzanian government jointly developed it. A memorandum of cooperation was signed in March 2013, and a groundbreaking ceremony was held on October 16, 2015. It was originally scheduled to be in use between 2020 and 2021.

Source: Hong Kong Oriental Daily, April 24, 2020