• MSC, via Africa Global Logistics, has signed an MoU with Tanzania to develop the first phase of Bagamoyo, reviving a flagship port project stalled since 2019.

• The deep-water port could ease congestion at Dar es Salaam, cut regional logistics costs, and strengthen Tanzania’s role in AfCFTA-driven trade corridors.

• Yet fierce regional competition, connectivity gaps and overcapacity risks mean Bagamoyo’s long-term success is far from guaranteed.

Tanzania has taken a decisive step in reviving the long-delayed Bagamoyo deep-sea port project by signing a memorandum of understanding with Africa Global Logistics (AGL), a subsidiary of the Mediterranean Shipping Company (MSC), one of the world’s largest container shipping groups. Under the agreement, AGL will design, build and operate the first three berths of the port, with construction expected to start in early 2026 and last around three years.

The deal marks a turning point for a project initially launched in 2013 with Chinese and Omani partners, before being halted in 2019 after the Tanzanian government deemed the contractual terms overly restrictive. Under President Samia Suluhu Hassan, the project has been revived through a more flexible public-private partnership model, with phased development and room for additional investors in later stages.

Bagamoyo’s long-term vision remains ambitious. Government projections envisage up to 28 berths integrated with a large special economic zone, positioning the port as a future logistics and industrial hub for East and Central Africa. While these targets remain indicative rather than contractual, they reflect Tanzania’s desire to reshape its maritime and trade infrastructure fundamentally.

MSC’s Strategic Bet on East Africa

The economic rationale behind Bagamoyo lies in its potential to relieve pressure on Dar es Salaam, Tanzania’s principal port and one of East Africa’s busiest gateways. Despite ongoing upgrades, Dar es Salaam regularly faces congestion, long dwell times and capacity constraints, which raise costs for both domestic and transit cargo.

For landlocked economies such as Uganda, Rwanda, Burundi, the Democratic Republic of Congo, Zambia and Malawi, logistics costs remain structurally high. These countries depend heavily on corridors through Dar es Salaam or Mombasa, where delays and inefficiencies translate into higher import prices for fuel, fertilisers and consumer goods, while eroding the competitiveness of exports, including minerals and agricultural products.

Designed as a deep-water facility with a draft of up to 20 metres, Bagamoyo aims to accommodate ultra-large container vessels and improve turnaround times. Combined with upgraded inland connections, notably rail links such as the Standard Gauge Railway and the rehabilitated TAZARA line, the port could significantly reduce transit times and logistics costs across the region. In the context of the African Continental Free Trade Area, such gains could support the expansion of intra-African trade and regional value chains.

For MSC and its logistics arm AGL, early involvement in Bagamoyo offers a strategic foothold in one of Africa’s fastest-growing trade regions. East Africa’s demographic growth, urbanisation and industrial ambitions are driving rising demand for containerised trade. At the same time, AfCFTA implementation is expected to stimulate cross-border freight flows further over the coming decade.

AGL’s growing African footprint already spans ports, railways and inland logistics platforms across West, Central and Southern Africa. Bagamoyo would strengthen this network and position MSC to influence future trade routes, while offering Tanzania an opportunity to diversify away from over-reliance on a single main port.

At a national level, authorities hope that increased throughput, transit traffic and port-linked industrial activity could contribute meaningfully to economic growth and employment, while enhancing Tanzania’s role as a regional logistics gateway.

Overcapacity and Execution Risks Remain

Despite its promise, Bagamoyo faces significant economic and strategic risks. East Africa’s port landscape is becoming increasingly competitive, with Mombasa expanding capacity, Lamu gradually coming on stream, Djibouti consolidating its role as Ethiopia’s main maritime outlet, and Berbera emerging as a fast-growing alternative corridor.

In this context, the risk of regional overcapacity is real. Large-scale port investments elsewhere on the continent have shown that insufficient cargo volumes, weak inland connectivity and high maintenance costs can quickly undermine financial viability. Bagamoyo’s proximity to Dar es Salaam, just 75 kilometres away, also raises the risk of internal traffic cannibalisation if overall volumes do not grow fast enough.

For MSC, a commercially driven operator, returns on investment will ultimately determine long-term commitment. Slower-than-expected AfCFTA implementation, delays in rail and road links, or weaker regional demand could limit throughput and postpone subsequent development phases, increasing the risk of underutilised assets.

Idriss Linge