Tanzania Seeks World Bank Funding for Port Upgrade

The Tanzanian government has initiated formal discussions with the World Bank to secure a low-interest loan for port infrastructure development. Deputy Transport Minister David Kihenzile confirmed the negotiations on February 3, 2026. The funding would finance construction of four new berths at the Port of Dar es Salaam. This expansion aims to increase cargo handling capacity and reduce vessel waiting times. The port currently handles approximately 14.5 million tons of cargo annually. It serves as Tanzania's primary gateway for international trade.

Current Port Operations and Challenges

Dar es Salaam Port operates 11 berths with varying depths and capabilities. The existing infrastructure struggles with congestion during peak periods. Vessels sometimes wait up to five days for berthing space. This delay increases shipping costs for importers and exporters. The Tanzania Ports Authority manages port operations under government oversight. The authority reported handling 1.2 million twenty-foot equivalent units in 2024. This represents a 7% increase from 2023 volumes. Regional competitors like Mombasa and Durban ports have invested heavily in modernization. Tanzania risks losing market share without similar upgrades.

Proposed Expansion Details

The four new berths would increase total berth capacity by approximately 36%. Construction would require environmental impact assessments from the National Environment Management Council. The Tanzania Investment Centre must approve foreign contractor participation. Project costs remain undisclosed but similar port expansions in Africa range from $300 million to $500 million. The World Bank typically offers loans with 1-2% interest rates for infrastructure projects. Repayment periods often extend 20-25 years. The loan would supplement Tanzania's national budget allocation for transport infrastructure. The government allocated 1.2 trillion Tanzanian shillings ($500 million) to port development in its 2025-2026 fiscal plan.

Why It Matters

Port expansion directly impacts Tanzania's economic competitiveness. Improved efficiency would reduce logistics costs for businesses operating in the region. The African Continental Free Trade Area implementation increases demand for efficient ports. Tanzania's exports grew 12% in 2024 to reach $8.3 billion. Agricultural products like coffee, tea, and cashews dominate export volumes. Mining exports including gold and gemstones contribute significantly. Faster port turnaround times would make Tanzanian goods more competitive globally. The expansion could create 2,000-3,000 construction jobs during implementation. Permanent port operations jobs would increase by 400-600 positions. Regional trade corridors through Tanzania serve landlocked neighbors like Zambia, Malawi, and the Democratic Republic of Congo. These countries depend on Dar es Salaam for approximately 30% of their maritime trade.

What Businesses Should Watch

Shipping companies should monitor tender announcements for construction contracts. International firms like China Harbour Engineering Company and Bolloré Africa Logistics have experience with African port projects. Local contractors including Bakhresa Group and Suma JKT may seek subcontracting opportunities. Import-dependent businesses should track potential disruptions during construction. The Tanzania Freight Forwarders Association represents companies managing cargo through the port. These firms will adjust operations based on construction timelines. Exporters should prepare for possible tariff adjustments to fund port maintenance. The Tanzania Revenue Authority collects port charges and customs duties. Manufacturing companies near Dar es Salaam could benefit from improved supply chain reliability. Companies like Tanzania Breweries Limited and Bakhresa Food Products rely on imported raw materials. Tourism operators should note potential cruise terminal developments. The current port handles limited passenger vessels. Financial institutions should watch for bond issuances related to port financing. The Bank of Tanzania regulates currency exchange for international transactions.

Implementation Timeline and Next Steps

World Bank loan negotiations typically require 6-9 months for approval. The bank's board of executive directors must review the proposal. Environmental and social assessments would follow approval. Construction could begin in early 2027 if funding secures timely approval. The Tanzania Ports Authority would manage procurement through international bidding. Completion would likely occur in phases between 2029 and 2031. The government must coordinate with the Surface and Marine Transport regulatory Authority. This agency oversees port safety and operational standards. The Ministry of Works and Transport will supervise project implementation. Regular progress reports to parliament would provide transparency. The Parliamentary Committee on Infrastructure Development monitors major projects. Successful expansion requires coordination between multiple government agencies. The President's Office-Regional Administration and Local Government must approve land use changes.

Regional Context and Competition

East African ports compete for transit cargo to landlocked countries. Kenya's Port of Mombasa handles approximately 34 million tons annually. It completed a second container terminal in 2023. Djibouti's Doraleh Container Terminal serves as a regional hub for Ethiopian trade. Mozambique's Maputo Port has attracted investment from DP World. Tanzania's port expansion aligns with regional infrastructure developments. The Central Corridor connects Dar es Salaam to Lake Tanganyika. Road and rail improvements along this route would maximize port benefits. The Tanzania Zambia Railway Authority manages cross-border rail connections. These links need upgrading to handle increased container volumes. Air freight operators should note potential shifts in logistics patterns. Precision Air and Air Tanzania provide cargo services complementing maritime transport.

Economic Implications and Risks

Port expansion could boost Tanzania's GDP growth by 0.5-0.8% annually. The World Bank projects Tanzania's economy will grow 6.2% in 2026. Improved port efficiency would support this growth trajectory. Risks include construction delays and cost overruns. Weather patterns and supply chain disruptions could affect timelines. Currency fluctuations between Tanzanian shillings and US dollars impact loan repayment costs. The Bank of Tanzania maintains foreign exchange reserves to manage such risks. Political stability supports project continuity. Tanzania has maintained peaceful transitions since independence. The ruling party holds a strong parliamentary majority. This provides policy consistency for long-term infrastructure projects. Environmental concerns include coastal erosion and marine ecosystem impacts. The National Environment Management Council will require mitigation measures. Community engagement will address displacement concerns for informal settlements near the port.