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PRESIDENT John Magufuli (with a red tie) and his Ugandan counterpart, Yoweri Museveni walk to the site of ground breaking for the construction of Hoima - Tanga crude oil export pipeline at Chongoleani Village in Tanga on Saturday. (File Photo)

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BANKS should review their lending policies to support Tanzanian businesses take up trade opportunities in the construction of Hoima - Tanga crude export pipeline, a leader of a recently launched association for local service providers suggests.

Mr Abdulsamad Abdulrahim, a co-founder of an Association Tanzania Oil and Gas Service Providers (ATOGS), told the Business Standard recently that local banks have a role to play in supporting Tanzania businesses to benefit from the construction of the pipeline expected to cost about 8tri/-.

“We are appealing to banks and financial institutions to review their lending policies to be able to help local firms acquire capital for the project. We must be strategic and treat the pipeline project differently,” he said adding there were risks of losing out the opportunities to powerful foreign firms which are planning to cash in from the project.

President John Magufuli and his Ugandan counterpart, Yoweri Museveni on Saturday laid a foundation stone for the construction of a $3.55 billion-crude export pipeline that would pump Ugandan oil for international markets.

The 1,445 km-project - set for completion by 2020 - will stretch from landlocked Uganda’s western region, where crude reserves were discovered in 2006, to Tanzania’s Indian Ocean seaport of Tanga.

It will become the longest electrically heated crude oil pipeline in the world. “I know there are number of foreign countries ready to put money to empower their businesses for the project.

So the message to lenders is if you stick to your regulations, you’ll deny Tanzanians opportunities to participate in the project,” he said. He said local businesses were capable and ready to deliver services for the project to promote the local multiplier effect from so far the largest infrastructure project.

According to him, indigenous Tanzanian individuals and bodies corporate have what it takes to deliver services for the construction of the pipeline but financial support to enable them to compete with established foreign firms.

The pipeline construction is important to local businesses and the economy in general because it will involve a number of sectors such as transport, logistics, freight financial services, accommodation, catering and many more which will have a great local multiplier effect to the economy.

It is estimated the project will create between 10,000 and 30,000 direct employments. “In business perspective, it will lead us to where we want to be - middle income nation through business opportunities to be created and their local multiplier effect in terms of re-circulation of the money obtained by local businesses to the economy,” he said.

“When that happens, it will stimulate business activities to a great extent which will be good to the economy.”

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