Tanzania on Tuesday agreed to pay a Chinese business $2.2 billion (Ksh.271 billion) to construct the last segment of a railway line connecting the nation's main port with its neighbors.
The 1,600-mile (2,561-kilometer) line will run from the port city of Dar es Salaam on the Indian Ocean to Mwanza on Lake Victoria, with future extensions to Burundi, the Democratic Republic of the Congo (DRC), Rwanda, and Uganda.
The Standard Gauge Railway (SGR), which runs from Tabora to Kigoma in western Tanzania, would be finished in 2026, according to President Samia Suluhu Hassan, who was present for the signing.
Tanzania would be in a better position to use its strategic geographic situation to encourage cross-border commerce once the SGR is complete, she said.
According to Hassan, Tanzania's total investment in the SGR, including the most recent contract, has reached $10.04 billion.
She refuted claims that the nation was taking on excessive amounts of debt, stating that the lack of local resources was the reason why we needed to borrow money for this crucial infrastructure and other sustainable development initiatives.
She said that once it is fully operating, the new railway will lower cargo transportation costs from a minimum of $6,000 per tonne between the Dar es Salaam port and the DRC to around $4,000 per tonne.
The amount of time required for delivery would decrease from 30 days by truck to 30 hours in 2027.
China is the largest investor in Africa, pouring billions of dollars on airports, trains, and ports in exchange for the security of oil and other commodity supplies like copper and cobalt.
These infrastructure projects are funded by huge loans from China, but Beijing has come under fire for making excessive loans to developing nations without fully vetting their ability to repay them.
Tanzania's railway system now consists of two networks, one connecting it to Zambia and the other to Kenya and Uganda.