Albeit much in debate pertaining to its reference, Bagamoyo or ‘Bwaga-moyo’ (in Swahili) which means ‘lay down your heart’, is either related to the slave trade that passed through the region – where the slaves were told to ‘lay down their hearts’ at Bagamoyo before been sent overseas only never to see their homes again; or to the oasis where, in the early 19th century, the porters rested after carrying loads on their shoulders brought to the town from the interior to trade – ‘lay down their melancholy’ (“Bagamoyo: Throw down your heart,” 2012; Fabian, 2013). In either case, despite there exists only little evidence to substantiate the claim that the town was a major slave trading centre, Bagamoyo served as a major trading port (Campbell, 1989) and two centuries later, the Chinese, as part of their OBOR project, is developing the Port of Bagamoyo. The Port of Bagamoyo is located in the East African country of Tanzania, to the North of the major port town, Dar-es-Salaam, and to the South of the Port of Mombasa in Kenya.
In a study which explores the demand for port capacity in East Africa, considering Bagamoyo as an alternative for the location of a new port, two conclusions are prominent – the port in Dar-es-Salaam could only function as a regional lower-tier hub distribution centre for the trade of Tanzania and its hinterland; compared to Dar-es-Salaam, the transportation cost by road for a ton of transit cargo is US $0.72 cheaper for Bagamoyo. Bagamoyo port as a regional hub would serve as the gateway to the inland and therefore, a gateway to Africa for the travellers and traders on the Silk Route (Haralambides, Veldman, van Drunen, & Liu, 2011). The potential of Bagamoyo as a port is thus not only due to its proximity to existing (as well as planned) infrastructure to the inland but also due to its location. Figure x. Location of Bagamoyo. Source: Google Earth The Bagamoyo Port and Special Economic Zone project, henceforth PoB, development began as a three-way partnership between China Merchants Port Holdings (CMPH), Oman’s General State Reserve Fund (GSRF) and the Tanzanian Government for which the framework agreement was signed on 24 March, 2013.
However, “financial constraints … have forced Tanzania to miss out on ownership of the US $10 billion Bagamoyo Port and Special Economic Zone project” (“Dar surrenders Bagamoyo port project to Chinese,” n.d.).
In exchange for an undisclosed shareholding in the project, Tanzania was to raise US $28 million in order to compensate the 2,180 registered landowners (who would be displaced for upon their land the project would be founded on); but, Tanzania was only able to raise US $1.5 million. At the moment, the Tanzanian Government will forgo an equity stake in the project – while the CMPH stepped in to fill the void and fund the money needed for landowner compensation – and will only (or at least, purported to) benefit from taxes on the land and occupancy by investors. In a statement, managing director (of CMPH) Hu Jianhua said that the company would run Bagamoyo as one of its overseas ports (“Dar surrenders Bagamoyo port project to Chinese,” n.d.). The Tanzanian-Chinese relation has been developing for some time now and the Chinese investments in Tanzania has already grown to US $6.
62 billion. Investments include projects in agriculture, tourism, and ICT with 150,000 jobs being generated and over 350,000 individual actors already being engaged in trade activities between these countries (??, n.d.).
The intention of China is to increase the investments even further with the PoB and according to The Oriental Review, China has loaned Tanzania US $7.6 billion for a central corridor railway, for which the contract has been awarded, not surprisingly, to a Chinese contractor but for US $9 billion (Korybko, 2017). The Bagamoyo Port, connecting to the central corridor (Figure x below, red line), will be located 75 km North of the Port of Dar-es-Salaam and 10 km from the town of Bagamoyo. The port will be designed to be able to handle 20 million TEUs per year. The central corridor will be developed to connect the port to the landlocked countries in the hinterland. Attached to the port is the Special Economic Zone (SEZ) where some 190 industries have been marked for development; when the port is fully developed it is anticipated to grow to 700 industries (“Dar surrenders Bagamoyo port project to Chinese,” n.
d.). The vision for the SEZ zone (by CMPH) is for an industrial park worth US $120 million, a US $70 million tourist park, free port facilities (US $90 million) and free trade zone (US $70 million), a science and technology park (US $50 million), an international business centre (US $70 million), and an industrial building worth US $20 million (??, n.d.
).Figure x. Infrastructure Links to be Upgraded (or developed) in Tanzania. Source: (Korybko, 2017)Besides the aforementioned nine billion dollar central corridor (red line in the above figure, red dot: Bagamoyo Port), there are other major routes or infrastructural links being developed which are either “Chinese funded or Chinese contracted in one way or another” (Korybko, 2017). Korybko gives a comprehensive coverage of these structures and these are: Ugandan-Tanzanian oil pipeline (green line, green dot: Tanga port), Tazara line (blue) connecting Tanzania and Zambia (blue dot: Port of Dar-es-Salaam), Mtwara development corridor (black line, black dot: Mtware) and the Dar-es-Salaam-Mtwara oil pipeline (orange line). These links can ensure connectivity between the landlocked countries and the major ports, including the Bagamoyo Port facilitating means of transportation of resources, and products of exports and imports. It can be argued that the southern route from Mtwara will enable access to the iron ores and coal mines in Malawi while at the same time will aid the Russians in transporting Uranium from Mkuju river.
The other southern line will be connecting Dar-es-Salaam with the copper rich country of Zambia. The northernmost line will tap into the oil reserves of Uganda and the central corridor will connect Rwanda, Burundi, and DR Congo – a prosperous country with regards to exploitable resources and labour force – to the Bagamoyo Port. It can be discerned, therefore, that with the central corridor, all three developing countries with huge potential labour markets and resources, are provided a link to the free trading market and for China, to the OBOR. The ubiquitous notion of the West being the only saviour of Africa is changing; various countries in the continent have been increasingly drawn to China’s “no-strings attached” development aid while “Africa being no stranger to exploitation” (Manero, n.d.), it is worthwhile to examine, together with the expected completion of the PoB (in Tanzania) by 2020, if all these projects would eventually come to fruition and lead to economic growth not only in Tanzania, but also its landlocked neighbours, and the local populace – the key stakeholders from the West end of the Silk Route.The stakeholders concerned with PoB are multitude, however, a brief account of the key stakeholders are as follows: (1) (2,180) Registered Landowners: including homes and farmland; all landowners will be compensated for their losses, a total amount of US $28 million (approximately US $12,850 per landowner) have been raised.
However, there are many examples from history where the compensation and relocation of people have resulted in many difficulties and equity issues. (2) The Port of Dar-es-Salaam: is a significantly smaller port than the planned Bagamoyo Port. However the Chinese have plans for Dar-es-Salaam as well: “As for Dar-es-Salaam, Chinese businessmen from Jiangsu Province (home of the Eurasian Silk Road terminal, Port of Lianyungang) committed to investing US $5 billion in the region over the next five years” (Korybko, 2017). The vision is to develop the Port of Dar-es-Salaam and the link to the southern landlocked countries (including Zambia). It is therefore not expected that Dar-es-Salaam will be downgraded with the construction of the Bagamoyo Port. (3) The local community of Bagamoyo: constitutes mainly of farmers and fishermen; there are also livelihood being made through developing tourism in the area. On one hand, the livelihood of the local people could be very much be impacted by the changes in the environment due to the PoB and its subsequent operations.
On the other hand, the proximity to the port could bring new jobs to the community. Additionally, the port itself will also attract an influx of people (workers) to the area and may provide the local community with new opportunities for business. (4) Hinterland (landlocked countries of – Uganda, Rwanda, Burundi, DR Congo, and Zambia): these countries are currently without any facilities to bring their products to the international market (in an efficient way). With the construction of the infrastructural links and the PoB, these countries will most likely have means to bring their products and resources to the free markets.
However, like the Russian Uranium mine along the Mkuju river, the companies exploring (and exploiting) the natural resources of these countries, are often foreign. (5) The Government of Tanzania: is no longer a partner in the PoB and as mentioned before will only benefit from taxes on the land and occupancy by investors. However, government’s interest in the care for the Tanzanian populace and sustainable development of Tanzania persists.
(6) China Merchants Port Holdings (CMPH): is the main investor in the PoB and will run the port as one of its overseas ports. Management of the port will be executed by CMPH without any input from the Tanzanian government. Bagamoyo Port will be part of the OBOR project of China. (7) Oman’s General State Reserve Fund: is the other partner of the PoB and will reap the benefit according to an undisclosed agreement between the partners.Bagamoyo lies in an environmentally rich land with the Ruvu river to the North, the Lazy Lagoon Island to its South, and with mangrove forests on its either sides.
The people living in the Bagamoyo area (approximately 300,000) are utilizing this enriched environment and are making a livelihood out of agriculture, fishing and mariculture – seaweed farming and prawn farming; and, along with trade and tourism, they form the main economic activities. Nevertheless poverty is still very much present in Bagamoyo which makes the local communities vulnerable and make them an easy prey to exploitation; for instance, even though tourism has created new job opportunities and businesses, its development have lead to exploitation of resources and income inequality (Sosovele, n.d.). The mangrove forests are an environmental asset to the area and essential part of the mariculture. With the completion of PoB, there are reasons to be skeptical about that these natural resources will be further pressured by additional workers and more tourists. Although, no study have explicated the environmental impact in the vicinity due to PoB, there are studies from other parts of the world which have highlighted the exacerbating effects on the environment due to port operations (“The environmental impacts of pollutants generated by routine shipping operations on ports,” 2010).
Besides, with a community so reliant on and occupations – characterised by its tradition – adhered to its natural environment, many questions could be raised regarding the impact of such a port on the natural environment and the local community: whether it would lead to sustainable prosperity since, while a new port may create many new job opportunities it is unlikely that the local community will have the training and skills to transcend to adapt and it is likely that the environment is affected negatively.Tanzania is one among the fastest growing economies in Africa, with 7% GDP growth in 2016 (IMF, n.d.). Furthermore, while many other African countries have been through various form of political and regional instability (the genocide in Rwanda and the continuing conflicts in Somalia), Tanzania has been a peaceful and stable country within the region (Korybko, 2017).
Nevertheless, around 80% of the labour force is active in agriculture and with education among youth in rural areas being comparatively low there are limited skilled workers for the operating firms in Tanzania (PWC, n.d.). A case study into the financial deepening of the country, capital inflows, and economic growth in Tanzania shows that “financial development in Tanzania followed economic growth” (Odhiambo, 2011). Therefore, the ability of the Tanzanians to increase their capacity to produce goods and services and hence creating economic growth resulted in further financial development which will induce aggregate demand growth and therefore more production in the second round of the circular flow. In other words, the emerging Tanzanian economy is supply driven. With the large Chinese investment in the country which will transform the economy into a demand driven economy, it can be argued that there will be aggregate demand growth (and therefore economic growth) via the Keynesian multiplier process.
However, the boost in aggregate demand will so come into motion provided the local population enjoys employment and wage growth sufficient enough to induce demand; and hence will be subject to the condition that in the new industries marked to function in the SEZ and the industrial parks, Tanzanian locals are given employment. But, as discussed in Chapter 5, the business model of the Chinese in Africa is often neo-colonist and value extracting in nature. Besides, Chinese businesses in African countries have resulted in exploitation of the local community by smuggling ivory and gold. Therefore, by making Tanzania into a transportation facilitator, alone, without giving opportunities for Tanzanians, China would only be exploiting Tanzania. However, it will also be up to the Tanzanians themselves to take up the challenges and opportunities the new infrastructure projects may bring along.
As mentioned before, industries have marked their spot in the SEZ to open for business. SEZ was the strategy which put China on the world trade and industry map which helped them to “industrialise by attracting foreign investments”. In 2006, China decided to take its special economic zone overseas including Zambia, Ethiopia, Mauritius, Nigeria, and Egypt. Although there is a lack of a comprehensive coverage for a good evaluation of their strategy, the first steps of the SEZ have already generated work for both China and the local labour force. For example, the SEZ in Zambia, Nigeria, and Ethiopia have, as by 2013, generated approximately a combined 1,849 Chinese and 11,192 local employment. It should be noted here that the “Zone development in China …
took at least a decade or longer to reach maturity” (“‘Going Global in Groups’: Structural Transformation and China’s Special Economic Zones Overseas,” 2014). In the same vein, it is plausible that the SEZ in Tanzania will create employment and the multiplier process can initiate to induce aggregate demand growth. However, another question that may arise here is about what percentage of the unemployed labour force would be employed in this new SEZ and would it be sufficient enough to ensure productivity and wage growth? Sustainable growth, driven by aggregate demand, furthermore, would depend on the type of jobs being offered. For a stable and equitable growth, it is imperative that not only low-skilled jobs but also middle-skilled and high-skilled jobs are offered to the local population such that it can act antonymous to income inequality and job polarisation, else only the highly skilled share of the labour force would enjoy the benefits. This is of paramount importance since if it takes over ten years to maturity for these SEZ zones and parks, as in China, with the workers unable to increase their skills (since these would be workers mainly from agriculture and fishing jobs prospecting to work in the industries and they themselves and their children lack from quality education), the skill-premium for the high-skilled jobs, most likely to be taken up by foreign nationals, will arise creating equity issues even within this short decadal range.With an enriched environment constituting of abundant natural resources and potential labour force but yet unable to tap into these resources without the assistance of foreign powers is the incapacitation of East African countries.
However if the African communities can influence their own changes, by seizing the opportunities so offered by the Chinese through apt policy reforms, technological, societal, and economic transcendence, with the construction of the new port may bring prosperity that the people can ‘lay down their melancholy’ and reap the fruits of the new opportunities and influx of knowledge and technology into their country and area. Nevertheless, it is also worthwhile to find whether the Chinese investments will lead them to sustainable prosperity or if it would lead them to an undesirable situation when the Bagamoyanians would have to ‘lay down their hearts’ for their land would not be the same due to exploitation by foreign powers.ReferencesBagamoyo: Throw down your heart. (2012, August 8). Retrieved December 30, 2017, from https://hearabout.wordpress.com/2012/08/08/bagamoyo-throw-down-your-heart/