Africa > East Africa > Tanzania > Museveni, Magufuli Reaffirm Political Will for Oil Pipeline

Tanzania: Museveni, Magufuli Reaffirm Political Will for Oil Pipeline


President Museveni and his Tanzanian counterpart John Pombe Magufuli, last Saturday laid the initial foundation stone for construction of the proposed East African Crude Oil Pipeline (EACOP), as a gesture for joint political will, for the development of the multi-billion dollar project within the stated timeframe.

The event that attracted hundreds of residents at Chongoleani, in the northerly seaport city of Tanga in Tanzania, as well symbolised the start of the construction of the $3.5b (about Shs12.6 trillion) pipeline. It will run from Hoima in mid-western Uganda to Tanga port at the Indian Ocean.

Actual construction is expected to start early next year and to be completed by 2020, if all goes according to plan, inclunding timely securing of financing from the international lenders.

The two chief of states assured that the project will not be held back by the customary profuse bureaucracy, which in Uganda has imperiled nearly all large infrastructure projects as government officials scheme for kickbacks.

President Magufuli, known for his unorthodox work methods of cracking whip on incompetent and corrupt bureaucrats, said three years are enough to start and complete construction of the 1,445 km pipeline.

"Three years are too long and you can finish before that time if you work day and night," he said in his speech at Tanga.

Last year in April, government settled for the Tanga route as destination for Uganda to export its crude oil to the international market, ditching the Kenyan route on grounds of being expensive despite being shorter route compared to the former.

The Tanga route was selected on basis part other factors transit fees of $12.2 per barrel (Shs40,321), environmental considerations, flat terrain profile, limited infrastructure constraints, Tanzania's convenient land tenure system, and Tanga port being conveniently available for use.

Tanzania as well agreed to several concessions like waiving corporate tax and price-added tax (VAT) to reduce the cost of the project, depreciation tax holiday for 20 years and free (land) corridor, and acquisition of shares in the project.

President Museveni, who was accompanied to Tanga by officials in the ministries of Energy, Foreign Affairs, Finance and East African Community, said Tanzania and Uganda should not be taken as sole beneficiaries of project but rather all region.

"There are by presently hydro-carbon resources detected in Eastern Congo, the Semliki valley; there are confirmed hydro-carbon resources in the Turkana area of Kenya; there are as well possibilities of hydro-carbons in Tanzania, Rwanda and Burundi," he said.

As a result of oil discovery in the region, Mr Museveni, said "East Africa and specifically Uganda is respectable presently. We are ready for transformation of our people. We don't want a peasant to generate an extra peasant."

The President described Tanga as a "historical place" having been a base by some Ugandan dissidents led by former President Apollo Milton Obote in the initial against the Idi Amin's regime.

"Mwalimu (Julius Nyerere) and I, always discussed and agreed on a lot of things inclunding the need for a railway line from Tanga to Musoma," he said. "The Hoima-Tanga Pipeline is not a bad substitute."

A thorough financing blueprint for the project remains in the pipeline but preliminary data indicates that the two nations, backed by the French oil giant Total E&P which backed the Tanga route and later bulldozed ITS partners Tullow and Cnooc, will be turning to international lenders to raise 70 % of $3.5b capital spending for construction.

The remaining 30 % capital will be raised through equity by the JV partners, France's Total, Anglo-Irish Tullow and China's Cnooc, and national oil companies of the two nations, Tanzania Petroleum Development Corporation and Uganda National Oil Company (Unoc)--for the latter carried through, a subsidiary, the Uganda National Pipeline Company.

Related Articles
  • Namibia Scraps Visas for Africans

    2017/11/01 Namibia has gotten the ball rolling on plans to scrap visa requirements for African passport holders next Cabinet authorised the implementation of this process - to be carried out in line with diplomatic procedures. Namibia will any minute at this time start issuing African passport holders with visas on arrival at ports of entry as a initial step towards the eventual abolition of all visa requirements for all Africans.
  • Africa: Experts Explore Infrastructure and Cooperation to Improve Lives

    2017/11/01 Addis Ababa — African economies require structural transformation to attain sustained increase that trickles down to all its peoples, an official from the United Nations Economic Commission for Africa (ECA) told experts gathered at the organization’s Ethiopian headquarters. Soteri Gatera, who heads the ECA’s Industrialization and Infrastructure Section, says only such “inclusive” economic increase will help resolve the “persistent social economic problems” Africa faces.
  • Africa's last international banks make their stand

    2017/10/31 On June 1, 2017, Barclays sold a 33.7% stake in its African business, Barclays Africa Group Limited (BAGL). The transaction reduced the UK lender’s stake in its African offshoot to 14.9% and permitted, in accounting terms, the deconsolidation of BAGL from its parent. Additional symbolically, it brought to an end Barclays’ operations on the continent next additional than 100 years. The rise of Africa’s home-grown financial players has led most international lenders to withdraw from the continent. However, Société Générale and Standard Chartered are not only staying put but marking territory for digital expansion. James King reports.
  • Nobel Laureate Joseph Stiglitz Calls For New Strategy

    2017/10/19 Joseph Stiglitz has advised African nations to adopt coordinated strategy encompassing agriculture, manufacturing, mining, and service sectors to attain same success delivered by the old manufacturing export-led strategy. Prof. Stiglitz, an economist and professor at Columbia University, New York, gave the advice at the Babacar Ndiaye lecture series introduced by African Export-Import Bank (Afreximbank) which debuted in Washington D.C.
  • Ecobank launches mVisa across 33 African Countries

    2017/10/19 Ecobank Scan+Pay with mVisa delivers instant, fasten cashless payment for goods and services by allowing customers to scan a QR code on a smartphone or enter a incomparable merchant identifying code into either a feature phone or smartphone Ecobank ( has partnered with Visa to launch Ecobank Scan+Pay with mVisa solutions to their consumers. The strategic tie-up signals interoperability on a cross border level – and potentially huge gains – as it affords consumers with the ability to use their mobile phone to due access the funds in their bank accounts to pay person-to-merchant (P2M) or person-to-person (P2P).