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Ar How Tanzania Lost its Port to India and Dubai
Tanzania’s lease of its main port to Dubai’s DP World and India’s Adani Ports raises alarm over selling out national sovereignty. Behind promises of modernization, the deals strip Tanzania of control, leaving its economic lifeblood in foreign hands for the next 30 years.
There’s a certain irony in the sight of Dar es Salaam's harbor at dusk. As the sun dips below the horizon, casting a golden shimmer on the surface of the Indian Ocean, the ships docked at the port seem to tell a story of progress: of global trade, of Tanzania standing proudly at the crossroads of East Africa’s future. But beneath this illusion of prosperity is another, less visible truth: the soul of this port no longer belongs to Tanzania.
In October 2023, with the stroke of a pen, and behind closed doors, Tanzania leased berths four to seven of Dar es Salaam Port to UAE’s DP World. It’s a 30-year lease that will run until 2053. Most of the players who will be playing in Taifa Stars by then haven’t even been born.
Less than a year later in June 2024, the Tanzanian government was at it again. They granted yet another thirty-year lease to Adani International Ports Holdings Pte Ltd (AIPH) to operate and manage container terminal 2 (CT2) at the port of Dar es Salaam. This terminal has four berths (8 – 11) and handles 83% of Tanzania’s container volume. AIPH is a wholly owned subsidiary of India's Adani Ports and Special Economic Zone (APSEZ).
In deals that seem to have bypassed public scrutiny, two foreign giants – India’s Adani Ports and Dubai’s DP World – were handed the keys to the nation’s busiest trade hub. Politicians mostly from CCM, the ruling party, hailed it as a victory for modernization and profitability. But many Tanzanians are left wondering: At what cost? Has Tanzania leased its lifeblood?
To understand the gravity of this decision, one must peer beyond the headlines, beyond the glossy promises of infrastructure investment, and ask the hard questions. Who benefits from these deals? What does Tanzania gain? More importantly, what does it lose when the gateways of its economy are in foreign hands for three decades?
For decades, IMF and World Bank have demanded the privatization of Africa’s public assets as a condition for loans. This has paved the way for shadowy global investors and Africa’s corrupt ruling elite to fuel neo-colonialism.
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Deep Legal Concerns in the DP World Deal
In the second half of 2023, there was a flurry of debate in Tanzania. The National Assembly had ratified the agreement between the government and DP World regarding the management and development of the Dar es Salaam port. It seemed like a promising investment, something that could stimulate the economy. However, not everyone was convinced. Among the loudest critics was the Tanganyika Law Society (TLS). They felt something was amiss with this deal.
When TLS got hold of the agreement, they quickly unearthed many flaws. One of their main concerns was that the agreement seemed rushed. The government had called for stakeholder input just one day before the public hearing, leaving little time for experts and the public to offer substantial feedback. It was clear to TLS that such a critical decision, which would impact Tanzania's ports and economy, required more discussion and proper consultation.
The lawyers at TLS also scrutinized the technicalities of the agreement itself. The language used was vague, making it open to various interpretations. This worried TLS because they knew from experience that unclear agreements often lead to disputes. In their view, the contract didn't safeguard Tanzania's best interests, and they saw some provisions as contradictory to the country's laws and sovereignty. For instance, certain clauses suggested DP World might gain excessive control over Tanzanian ports, which could limit the country's ability to negotiate with other investors. This wasn't just about one company managing a port; it was about the future control of a vital national resource.
Moreover, the TLS felt that the arbitration process in case of disputes was too long and complicated. In case of a disagreement, resolving it would take so much time that the damage could already be done. Tanzania could face significant financial and legal risks from this agreement.
Another big issue for TLS was the legal framework that governed the agreement. While DP World would operate under Tanzanian laws for many aspects, parts of the agreement stated that English law would apply. This presented a legal tangle, as Tanzanian law and English law do not align on several key issues, especially regarding land ownership and investment regulations. TLS found it strange and impractical for two different legal systems to govern the same agreement, and they feared this could lead to further complications down the road.
At its core, TLS wasn’t opposing foreign investment or the modernization of Tanzanian ports. They understood the importance of economic growth. What troubled them was that this agreement appeared to put the interests of a foreign company ahead of Tanzania’s long-term stability and legal protections. They wanted to ensure that Tanzanians remained in control of their own ports and that the legal processes governing such an important deal were clear, just, and in the country’s best interest.
Dar es Salaam Port in Tanzania
Similar Problems with the Adani Deal
In June 2024, Adani followed DP World’s footsteps and also became 30-year owners of Dar es Salaam Port. Although it’s a done deal, we must continue asking hard questions: Who owns Adani? The Adani Family, led by Indian
Billionaire Gautam Adani, is the largest shareholder. But of course, western vulture investors are also proud owners. They include the infamous Blackrock and GQG Partners, an investment management company headquartered in Fort Lauderdale, Florida. These are the fellows that President Suluhu is handing over national assets to.
In January 2023, Hindenburg Research, a US Investment Research Firm, released the results of a two-year investigation accusing Adani of market manipulation and accounting malpractices. The report alleged that Adani had orchestrated ‘the largest con in corporate history’ through ‘brazen stock manipulation and accounting fraud’ spanning decades.
So why would President Samia Suluhu hand over the Port to such a company? Why did Tanzania’s National Assembly not flag this matter? That’s why the people of Africa are increasingly fed up with the corrupt ruling elite that keeps getting into bed with corrupt global multinationals.
While the DP World Deal and Adani Deals were pitched as lifelines that will boost the Port’s efficiency and competitiveness, their real cost is much more nuanced. Here are five major consequences of these deals:
Failure to Build Local Capacity through a Hybrid Solution
The leasing of Tanzania’s port to foreign operators shines a light on a recurring issue across Africa: the failure to develop local capacity. Rather than opting for a hybrid model that involves Tanzanian entities alongside international operators, the government chose to outsource the entire operation to foreign companies. This approach disregards an opportunity to transfer skills and knowledge to local professionals, especially at the leadership level.
A hybrid model could have enabled Tanzanian port authorities and local companies to gain expertise in advanced logistics management, ultimately fostering national self-reliance. Instead, Tanzania risks becoming perpetually dependent on foreign operators, losing out on developing its human capital and technical capabilities. The government’s decision effectively delays any real progress toward creating a Tanzanian-run, world-class port system. The concessions mean that for the next 30 years, the people who run the critical arteries of Tanzania’s trade network will be trained and employed elsewhere.
Nurturing Corruption through Opaque Deals
The opacity surrounding these deals has led to mounting suspicions. Tanzania’s government has been criticized for the lack of transparency in how these agreements were negotiated. Details such as the terms of profit-sharing, dispute resolution mechanisms, or the specific benchmarks for operational improvements were not disclosed publicly. This secrecy fuels fears of corruption. Tanzanians have no way of ensuring that their national assets are being fairly managed or that the terms are as favorable to the country as they claim to be.
The situation draws comparisons to similar deals in Kenya, where the public continues to vehemently oppose a potential 30-year lease of the Jomo Kenyatta International Airport (JKIA) to Adani Airport Holdings, a sister company to Adani Ports. The widespread public outcry in Kenya has put brakes on the airport lease. The Tanzanian government must stop quashing the people’s voice through heavy-handed security tactics. The people’s voice is like thunderhead clouds – they inevitably produce thunderstorms. The people will either speak through democratic spaces where every voice counts or through thunderstorms.
Click here to read part 2 of this Ibrahim Traore series
Gautam Adani, Founder and Chairman of the Adani Group
A Blow to National Sovereignty and Economic Independence
By handing over its port to India and the UAE, Tanzania has eroded a significant portion of its economic sovereignty. Ports are critical to a nation’s geopolitical strategy and economic self-determination. Control over ports dictates the terms of trade, regulates traffic, and holds the power to stimulate national economic growth. When Tanzania allowed Adani and DP World to run its main port, it effectively handed over control of its gateway to the world for 30 years. This decision has long-term implications for Tanzania’s autonomy in negotiating global trade terms.
Moreover, by allowing foreign companies to dominate the port's operations, Tanzania could face difficulties in asserting control should future governments wish to revise or terminate these deals. These concerns are not unfounded. In the past, various African countries have struggled to reclaim assets from foreign operators due to entangled legal frameworks and onerous exit clauses. Tanzania risks locking itself into a relationship in which it has limited influence over its most important trade infrastructure.
Diverting Potential Revenues and Long-Term Economic Benefits
Another key downside to these concessions lies in the loss of potential revenues that Tanzania could have generated if it had chosen to run the port itself. Adani and DP World are expected to invest significantly in upgrading the port’s infrastructure, and they will naturally seek to recoup their investments and secure a profit. This means that a substantial portion of the revenue generated by the port will flow overseas rather than staying in the Tanzanian economy.
Even if the port’s capacity improves and trade volumes increase, the bulk of the financial benefits will accrue to the foreign operators. What Tanzania gains in short-term capital investments, it loses in long-term profits. This is especially concerning given the country's broader development goals.
Public Discontent and Social Risks
Tanzania’s decision to lease its ports without substantial public participation or consultation has created fertile ground for social unrest. Citizens who feel sidelined in such significant national decisions are more likely to grow frustrated and disillusioned with their government. Such public discontent is not without precedent in East Africa.
Conclusion: An Uneven Trade-Off
The 30-year leases granted to Adani Ports and DP World are being touted as a means of revitalizing Dar es Salaam Port and boosting Tanzania’s standing as a regional trade hub. However, the long-term consequences of these deals expose Tanzania to a range of risks: from eroding national sovereignty and economic independence to undermining local capacity building and fostering public discontent.
Tanzania’s decision to prioritize short-term infrastructure investments over long-term domestic control and development mirrors a troubling pattern across Africa. In the rush to modernize infrastructure and attract foreign investment, governments often overlook the strategic benefits of self-reliance and the importance of fostering local expertise. In thirty years, when the lease agreements expire, Tanzania may find itself richer in infrastructure but poorer in autonomy and more beholden to foreign entities.
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