Transport minister Dr Harrison Mwakyembe has said that Tanzania needs hefty investment in railway infrastructure in order to cut cost of transporting goods.
He said the use of roads for transporting goods forced the end-users to bear the financial burden, making their lives harder.
Opening the 38th annual workshop of the Association of African Development Financing Institutions (AADFI), here yesterday, Dr. Mwakyembe said Tanzania depends on road transport by 95 per cent, which is very expensive.
“It is estimated that the cost of transporting one metric tonne of goods per kilometre by road in Tanzania is $15 cents. If we were to transport the same weight by rail it would cost about US$7 cents per kilometre.
“I don’t have to convince you that lowering the transport cost in the economy by 50 per cent will have a booming effect, thus creating jobs, wealth and prosperity,” Dr. Mwakyembe said, adding:
“While above 95 per cent of the heavy freight traffic in Tanzania is now transported by road, just below 2 per cent of heavy goods is transported by rail. This implies underutilization of the railway mode of transport and thus costing the nation dearly in terms of road maintenance funding.”
He stated that the government was set to spend over 9trn/- to improve the country’s infrastructure projects for the next five years, calling on international financial institutions to chip in and assist Tanzania to accomplish the mission.
Dr Mwakyembe said the estimated financial requirements will involve infrastructure development in railways, ports, airports and roads.
“I did not include electricity generation and transmission, telecommunication and fibre optics and the real estate sector. If you include all of that and consider only Tanzania, one out of the fifty-four nations on the conditions on the continent, then I think you understand the challenge that I am trying to describe in terms of financing infrastructure development in Africa,” he said.
The minister noted that the AADFI workshop would play an important role in boosting the country’s infrastructure development.
AADFI chairman and managing director of Tanzania Investment Bank (TIB) Peter Noni said that the forum provides an opportunity for the sector to grow as financial experts will have time to exchange views and experiences on how to boost the sector.
“Infrastructure is an important agenda in this meeting, because our countries have limited budget, hence depend on financial aid. So this meeting is an eye-opener for the sector to grow,” he said.
“TIB has a role to play in this area as we need to get capital from other development banks and use it to invest and contribute to the country’s infrastructure development,” he said.