The battle between Kenya and neighbouring Tanzania for the status of East Africa’s logistics hub is set to intensify after the latter unveiled plans to construct the region’s biggest port.

Barely four months after Kenya embarked on the construction of a second port in the coastal town of Lamu, Tanzania has announced that it has secured funds for a second major port in Bagamoyo.

Tanzania Minister of Transport Harrison Mwakyembe says China has agreed to finance the construction of the new Bagamoyo port at a cost of $11-billion.

Tanzania President Jakaya Kikwete formally asked for China’s assistance when Chinese President Xi Jinping visited the East African nation in March.

“We have reached a cooperative development agreement with China that will enable us to implement the Bagamoyo port project,” says Mwakyembe.

The port will be built north-west of Dar es Salaam and will handle 20-mil- lion containers a year, compared with the Dar es Salaam port’s capacity of 800 000 containers a year and the Kenyan Port of Mombasa’s 950 000 contains a year.

Scheduled for completion in 2017, the project will also entail the building of a 34 km road joining Bagamoyo and Mlandizi and 65 km of railway connecting Bagamoyo and the Tanzania Zambia Railway, or Tazara.

The Bagamoyo port is aimed at making Tanzania the preferred gateway to the wider East, Central and Southern African region. Construction of the port comes at a time when Tanzania, East Africa’s second-largest economy, is upgrading and expanding its two main ports – Dar es Salaam and Mtwara.

These investments constitute a bid to rival Kenya’s position as the main gateway to the region through the Mombasa port and the proposed Lamu port, which is being constructed at a cost of $3-billion.

According to the Tanzania Ports Master Plan for the period 2009 to 2028, the decision to invest in the new Bagamoyo port is part of government’s initiatives to spur economic growth through the establishment of economic development zones (EDZs) that provide an important stimulus for trade and investment.

Thirteen locations have been identified as potential EDZs, with the highest priority being given to Bagamoyo, followed by Mtwara and Arusha.

The Tanzania government estimates that, if the EDZ programme increased foreign direct investment in manufacturing by 50%, 8 000 to 10 000 tons of cargo would be generated each year.

Construction of the Bagamoyo port forms part of Tanzania’s massive investment push as it guns for double-digit economic growth over the next 12 years.

According to a World Bank study entitled ‘Africa Infrastructure Country Diagnostic: Transport’, Tanzania needs to invest about $13-billion in transport infrastructure to meet the accessibility standards appropriate for a middle-income country.