MSC Strikes Deal for Construction of Bagamoyo Port in Tanzania

After a decade of negotiating uncertainty, Bagamoyo Port project is finally moving ahead. Last week, Tanzania Ports Authority (TPA) revealed Africa Global Logistics (AGL), a subsidiary of the ocean carrier MSC, as the construction partner for the port. In a new agreement, TPA awarded AGL the rights to design, construct and operate the initial three berths at the Bagamoyo Port.

“We expect construction of the three new berths at Bagamoyo to begin early January,” said Plasduce Mbossa, TPA’s Director General. “We welcome more local and international investors to join the project, which aims to bring major transformation to port operations in Tanzania.”

The MoU marks an important milestone in re-launching the port project, which has suffered massive delays since it was first unveiled in 2013. At the time, the port was seen as a flagship project for China’s Belt and Road Initiative (BRI). However, the administration of the late President John Magufuli canceled the project in 2019. Magufuli accused China of exploitative terms in the deal for the port's construction, which included demands for massive tax exemptions.

When the current President Samia Suluhu Hassan took power in 2021, she restarted negotiations for the port project, describing it as a national priority. With the appointment of AGL, the shift from a Chinese to a European-led project seems complete. This comes at a time that MSC group is tightening its grip on African port operations, specifically through its terminals arm TIL and logistics division AGL.

In recent years, AGL has become increasingly being involved in port expansion projects across Africa, including in countries such as the Republic of Congo, Angola, Namibia and Ivory Coast. Now with the investment in Tanzania, AGL has said that it will further unlock its access to multiple African markets based on the strategic location of Bagamoyo port in the Indian Ocean.

If completed, the $10 billion Bagamoyo port project is planned to have 28 berths and a special economic zone, which could support up to 760 industrial facilities. In addition, the port is designed to have annual container capacity of 20 million TEUs, 25 times that of Dar es Salaam Port. Located just 42 miles north of Dar es Salaam port, Bagamoyo port is intended to address operational and capacity limits at the current gateway.

Most importantly, Bagamoyo hopes to compete with Kenya’s greenfield port of Lamu, which has benefitted from the realignment of liner schedules this year. Lamu port had remained unutilized since its commissioning in 2021 but is seeing a bump in traffic. In August, the port had a record nine ship calls.

Top image: Bagamoyo's beachfront (Arnold Tibaijuka / CC BY)