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El-Sisi’s visit to Tanzania heralds new era in bilateral cooperation

2017-08-18 21:15:15

By Paul Kibuuka @isidoralaw

THE first state visit of Egypt’s President Abdel Fattah El-Sisi to Tanzania from Monday to Tuesday of this week, at the invitation of his counterpart President John Pombe Magufuli, has come at a time when the geopolitical-economic landscape of the River Nile basin and Africa at large is briskly changing.

The visit not only confirms the continuation of a partnership dating back to the Nyerere–Nasser epoch, but also presents an opportunity to boost trade and investments in the two African brother countries and indicates that Tanzania is open for business and tourism.  

High-level visits from Dar es Salaam and Cairo that picked up under previous Tanzanian and Egyptian presidents set out a comprehensive set of mutual interests, expectations and challenges in the two countries and in the wider Nile River basin, which spreads over 10 countries, including Tanzania and Egypt.

Previous visits also accentuated concerns about issues that limit the space of the Tanzania-Egypt bilateral relations.  

Apart from decoding the contemporary undercurrents of the bilateral relations, these common interests, expectations and challenges dominated the joint press conference of Presidents Magufuli and El-Sisi held at the State House in Dar es Salaam on Monday.   

President El-Sisi’s visit offers a critical avenue for Tanzania and Egypt to reiterate their commitment to strengthening regional order and stability in the view of the rapidly changing political and economic winds in the Nile River basin and the priorities of President Magufuli’s Tanzania.

For instance, Tanzania’s maritime boundaries in the Indian Ocean – a vital geopolitical hub that stretches north to the Suez Canal in Egypt and connects trade routes in Africa, the Asia-Pacific region, the Middle East, and Australia – has shifted the focus to defense and security agendas.

Indeed, both sides announced they will remain committed to having an ongoing dialogue with the other countries, over issues such as the Nile transboundary waters and counter-terrorism, as the best way of ensuring peace and security in the region and continent at large.

The sojourn of Egypt’s President in Tanzania has taken place in the background of a deal on tariff offers with Egypt and the South African Customs Union that would allow the East African Community partner states to ratify the SADC-EAC-COMESA Tripartite Free Trade Area (TFTA) treaty by December 2017.

Egypt already ratified the TFTA treaty in May this year and is reportedly reviewing its offer of 100 percent tariff liberalization to the EAC, of which Tanzania is a member, on the basis of reciprocity. It might be prudent to find a common ground on the unresolved issues of rules of origin and tariff offers.

What’s more is that the visit signals the need to reactivate and revitalize the Tanzania-Egypt Joint Commission, after about 20 years of inactivity, and it’s good that both sides have agreed to this. This shows that Tanzania and Egypt are ready to adopt a more practical attitude towards the relationship that aims to improve bilateral trade and investments between the two countries.

Egypt has reportedly registered projects worth $887.02 million in Tanzania so far. Carbon Holdings, Egypt’s largest developer and operator of mid-to-downstream oil and gas projects, has shown interest in constructing an Ammonia gas plant in southern Tanzania while other Egyptian companies from key sectors like agriculture, mining, healthcare and the service industry have already established operations in Tanzania.

It’s not that Tanzania’s Magufuli government is ignorant of Egypt’s economic afflictions like mounting debts, negligible economic growth and dwindling foreign reserves, it’s just that confidence in Egypt’s financial future is strong because of President El-Sisi’s sweeping growth-oriented reforms, pledge of Gulf aid to Egypt, and ongoing negotiations with the IMF and World Bank for loans. All of this is expected to ensure robust economic growth for Egypt.

This matters to Tanzania’s industrialization goal and the country’s need for foreign investment amidst a tough domestic economic climate. And Egypt is seen as having a key role to play in Tanzania’s future through, for instance, positive joint ventures with the Tanzanian private sector. President Magufuli is looking at a subterranean engagement with Egypt and, actually, talks have generated a consensus to buttress bilateral cooperation in trade and investments.

President El-Sisi’s visit is likely to increase cooperation in the energy sector, which has so much unexploited potential. Tanzania and Egypt can collaborate in oil and gas with a view to forming strategic partnerships in upstream, midstream and downstream joint ventures; refineries; and petro-chemical plants. Egyptian companies need to seize emerging opportunities in the Tanzanian energy sector that seeks foreign capital inflows.

Egyptian companies can invest in worthwhile hydro, wind, solar and other forms of renewal energy projects and roads, bridges, railways, seaport and airport infrastructure projects as well as in the economic zones in Tanzania. Setting up transshipment activities and logistics and technology hubs would be of interest to Tanzania and portends a win-win situation for both countries.

Ultimately, however, President Magufuli’s equation for a lasting engagement with the Egyptian government must unavoidably factor in the growing interest of China and its multinational enterprises in the infrastructure and industrialization drive that Tanzania has embarked on. These enterprises are seeking for space in Magufuli’s new Tanzania which needs foreign investment capital. Here, Egypt can play a vital role and it should find its due space.

Paul Kibuuka is the Managing Partner of Isidora & Company Advocates. E-mail: paul.kibuuka@isidoralaw.co.tz Twitter: @isidoralaw

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