Ugandan President Yoweri Museveni and his Tanzanian counterpart John Magufuli inked an agreement to a $3.5 billion and 1,445-kilometer-long crude oil pipeline project that is set to provide tens of thousands of new jobs. The project will connect the oil-rich Hoima region in Uganda with the Indian Ocean via Tanzania’s Tanga port.
A key stakeholder in the deal is French oil company Total, which now owns 33.3% of the related licenses in Uganda, as well as a $575 million share in the project. Total will build the pipeline in cooperation with CNOOC Ltd., which is a subsidiary of China’s state-owned oil company, and British group Tullow Oil. The Uganda National Oil Company (UNOC) also holds a 15% share in the project.
Roughly 80% of the pipeline is set to be in Tanzania, and thus President Magufuli hailed it as a “crucial step” towards “creating jobs”, “promoting cooperation within the region”, and “stimulating economic development in areas the pipeline crosses”. The President estimates that the deal will create 18,000 jobs. Moreover, the two countries settled on a 40:60 profit-sharing model in favor of Tanzania,
The pipeline was initially set to run through Kenya; however, after the country cited “security and cost concerns”, the prospective pipeline was rerouted to Tanzania. However, these concerns still remain, as, in Uganda, much of the drilling will take place in natural reserves and affect the lives and livelihoods of close to 90,000 people. 12,000 Ugandan families stand to lose at least a portion of their land, and while the government has assured that it will adequately compensate them, these promises have not inspired confidence.
The timing of the announcement by Museveni and Magufuli is important, as it coincides with upcoming elections in both countries. In Uganda, Museveni has banned campaign rallies and severely restricted freedom of the press in order to extend his rule beyond four decades, having entered into office in 1986.
Similarly, in Tanzania, Magufuli, who entered office five years ago, fast-tracked a legislation that now bans all forms of digital protests, whereby organizing, planning, or even supporting any form of demonstration on the internet has now been deemed illegal. The new legislation also places a ban on sharing information about any infectious disease outbreaks without government permission. In fact, the ban even extends to private message platforms such as WhatsApp. Simultaneously, restrictions on hate speech on the topics of sexuality and gender have now been removed.
Amid civil unrest, it is hoped that the promise of jobs will somewhat calm tensions in both countries. However, given the rampant corruption and the prospective displacement and loss of land for thousands, public dissatisfaction is only likely to rise.
Uganda, Tanzania Sign Agreement on $3.5 Billion, 1,445km Pipeline Project
The project will connect the oil-rich Hoima region in Uganda with the Indian Ocean via Tanzania’s Tanga port.
September 15, 2020
Tanzanian President John Magufuli (L) and his Ugandan counterpart Yoweri Museveni (R) SOURCE: CGTN