Items of Interest: June 10

Presidential opposition to the Bagamoyo port project as well as liquified natural gas expectations in Tanzania and legislative developments in Zimbabwe conducive to sanctions repeal are actions from June 10 that may emerge to become significant factors impacting geomarket developments in Africa.

Tanzania: President John Magufuli stated his opposition to the country’s proposed $10 billion Bagamoyo port project.

Significance: The Tanzanian president cited unacceptable financial terms required by the country’s primary Chinese backers in rejecting the proposed project by China Merchants Holdings International to construct a deepwater port north of the commercial capital of Dar es Salaam. The Tanzanian government is proceeding with alternative projects that include self-financing the expansion of the existing ports of Dar es Salaam, Mtwara, and Tanga. The Bagamoyo project, which would have acted as the terminus for the country’s standard gauge railway project that is under construction and which will ultimately link to neighboring countries in the Great Lakes region, is not necessarily terminated, but will require essentially a removal of the demand by the Chinese for the Tanzanian government to provide a sovereign guarantee underwriting the project’s profitability. 

Tanzania: Energy Minister Medard Kalemani stated a host government agreement will be signed enabling construction on the country’s proposed $30 billion liquified natural gas project to start in 2022. 

Significance: Negotiating a host government agreement with the liquified natural gas project consortium led by Equinor has a working deadline of September, though high-level discussions to resolve on commercial and fiscal terms of reference for the greenfield project have been unresolved since 2018. Achieving a host government agreement is a crucial step in the project’s development, and is required before any sales and purchase agreements, followed by a final investment decision, will be initiated. The Magufuli administration is desirous to reach a host government agreement so as to see the country’s extensive offshore natural gas deposits be developed (and not divested from), though it is estimated that the production of first gas from the project could take from seven to nine years from the signing of a host government agreement. LNG efforts in Tanzania come as Anadarko prepares to announce on June 18 a final investment decision for their $25 billion natural gas project in neighboring Mozambique.  

Zimbabwe: The Maintenance of Peace and Order Bill is before the citizenry for public comment.

Significance: The Maintenance of Peace and Order Bill is intended by the Zimbabwean government to replace the Public Order and Security Act, one of two controversial and repressive pieces of legislation that impede the lifting of Western sanctions on Zimbabwean government officials. The other legislation is the Access to Information and Protection of Privacy Act (AIPPA) which is in the process of being repealed and replaced by new laws in draft form currently, the Zimbabwe Media Commission Bill, the Freedom of Information Bill and the Protection of Personal Information Bill. The public consultations over the Maintenance of Peace and Order Bill are final activities before the proposed legislation can be signed into law by President Emmerson Mnangagwa. The passage of the proposed legislation that raise pro-human rights governance behavior in Zimbabwe will support improving relations between the Zimbabwean government and governments in the West and contribute to efforts to see Western sanctions repealed and official financial assistance restored.

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