There is a peculiar rhythm to Tanzania’s big-project politics. Every few years, a podium is erected, a banner is hung, and a microphone crackles with the same refrain: Liganga is coming. Mchuchuma is coming. Steel is coming. The faces behind the lectern change, the logos on the backdrop change, but the promise does not. Somewhere in the speech there is a date, somewhere in the crowd there is applause, and somewhere in the record there is a memorandum of understanding that will age faster than the ink that sealed it.
Then the calendar rolls on. Steel imports rise. The southern hills remain quiet. The ore never moves.
Half a century after Liganga first entered our lexicon, Tanzania still spends over a billion dollars a year importing steel products, rods and coils stacked in Kariakoo, beams craned onto new towers in Dar, rails laid along a standard-gauge line. Mchuchuma’s coal seams, mapped and remapped, still lie largely undisturbed. Trains that should be hauling ore and coal thunder south only in artist’s impressions. The paradox is no longer amusing; it is expensive.
Why do our mega-mines stall at the same place, over and over, at the point where geology must become financing, where ceremony must become construction? The answers have less to do with rocks and more to do with the way we structure risk, organise the state, and tell the truth about timelines.
The pattern of stalemates
Look across Tanzania’s “strategic project” history and a pattern repeats with weary precision.
Announcements without anatomy. We excel at declarations, “deal signed,” “construction to begin,” “jobs created”, that leapfrog the anatomy of delivery. The public rarely sees the financing plan, the take-or-pay contracts, the phasing logic, the performance guarantees. What exists is a photograph; what’s missing is the spreadsheet.
Geology as alibi. We talk about ore grades and seam thickness as if the difficulty were underground. It isn’t. Iron ore and coal are not mysteries. The hard part is marrying mines to rail and port, power to process, and all of it to bankable contracts. Geology becomes the alibi for failure elsewhere.
Imports as a pressure valve. Because the mines never light, the market feeds itself with imports. Importers become entrenched; downstream fabricators organise around foreign supply. Each year that passes deepens the path of least resistance: keep buying abroad, keep delaying at home.
Ceremonies as policy. Groundbreakings stand in for ground truth. A project that has not reached financial close, that lacks firm offtake, that has no synchronised rail or power dates, is celebrated as if work had begun. When the site remains quiet a year later, the public’s conclusion is not subtle: hakuna kitu.
Credibility erosion. With each cycle, announcement, delay, silence, the credibility cost rises. Communities become sceptical, lenders become cautious, contractors price higher, and civil servants grow allergic to sticking their necks out. The next announcement has to shout louder to be believed, but the room has learnt to listen with folded arms.
This is not fate. It is a set of choices that can be unmade, if we confront why financing fails where geology succeeds.
Why financing fails
1) The capital stack is misaligned with reality.
Liganga–Mchuchuma is not one project; it is four: mine(s), rail, power, and smelter. Each has a different risk profile, cash-flow timing, and lender appetite. Bundling them into a single, monolithic “deal” overwhelms any single financier and blurs risk in a way credit committees hate. Breaking the enterprise into financeable blocks, each with its own investors, security, and revenue, is harder work, but it is bankable work.
2) Anchor contracts are promises, not paper.
Railways and ports are financed against long-term, take-or-pay contracts; smelters are financed against offtake with credible buyers; mines are financed against life-of-mine schedules and cost curves. Too often, we approach funders with PowerPoint “expected volumes” and “indicative interest,” not signed obligations with penalties for non-performance. Lenders price that gap as risk. Many simply walk away.
3) Global money has moved, and we pretend it hasn’t.
Coal-linked ventures face shrinking pools of capital. Many Western banks and insurers won’t touch them; ESG policies are not slogans, they are underwriting guides. That doesn’t make projects impossible, but it does change who the realistic financiers are (regional banks, some Asian lenders, export credit agencies) and what they will demand (transparency, strong security, robust environmental controls). Acting as if the 2005 project finance market still exists is a good way to die in 2025.
4) Policy signals wobble.
Investors can cope with tough rules; they cannot cope with unstable ones. When fiscal terms change mid-stream, when approvals ping-pong between agencies, when feasibility data is withheld from oversight institutions, the message to capital is simple: you are a political risk, not a commercial one. That message adds a percentage point here, another there, until the whole stack is unviable.
5) Coordination is treated as courtesy, not as contract.
A mine without rail is a hole in the ground. Rail without a port is a yard. Power without a substation at the right node is a press release. Yet we still allow ministries to move on separate calendars, each defending its milestones as if they were ends in themselves. Financing collapses when the clocks don’t align. Synchronisation is not a nice-to-have; it is the essence of bankability.
6) Timelines are written for rallies.
A smelter is not built in eighteen months. A railway does not materialise between one budget speech and the next. When we set public deadlines that ignore procurement reality, engineering lead times, and rainy seasons, we set ourselves up to miss them. Each miss corrodes trust, and trust is the cheapest currency in finance.
7) Risk sits where it should not.
In too many drafts, sovereigns are asked to carry market risk (commodity prices, exchange rates) while private sponsors try to offload execution risk (cost overruns, delays). Credible lenders will not finance that inversion. They demand risk sit with the party best able to manage it, shared through tested instruments: EPC contracts with liquidated damages; indexed tariffs with caps; escrowed revenue; political risk insurance. Rewriting the laws of risk does not attract capital; it repels it.
8) We mistake ceremony for close.
Financial close is a term of art: all conditions met, all contracts executed, money available for drawdown. A signed MoU is not financial close. A ground-breaking is not financial close. A headline about “billions secured” is not financial close unless a lender has wired a notice and a trustee has acknowledged receipt. When we conflate these, we misinform the public and demoralise the teams doing the real work.
9) We don’t price the cost of opacity.
Keeping feasibility studies and term sheets in vaults does not make risk disappear; it makes it unknowable. Unknown risk is the most expensive kind. Publishing credible summaries, capex bands, production profiles, power needs, timelines, community impacts, lowers suspicion premiums for both citizens and lenders. Transparency is not a favour to critics; it is a discount in the cost of capital.
10) We ignore phasing as a strategy.
“All-at-once” megaprojects are politically satisfying and financially paralyzing. A modular approach, initial mine output, a first smelting train, a priority rail segment to an ICD, incremental port upgrades, can cross the river by stones, proving cash flow at each step and crowding in cheaper capital for the next. When everything is contingent on everything, nothing moves.
Put plainly: financing fails when we ask money to believe what our institutions have not demonstrated and to bear risks our contracts have not allocated. Geology can be perfect and still starve if the capital stack cannot drink.
The way out is not another banner or a louder speech. It is to rebuild credibility, one boring block at a time: paper before podium, contracts before cameras, synchronised timelines before slogans. Only then does the cheque clear and the first tonne move.
Lessons from other projects
Tanzania is not new to grand projects that looked solid on the drawing board but faltered in execution. Liganga and Mchuchuma sit in a long lineage that includes both triumphs and cautionary tales.
TAZARA, geopolitics over economics. The Tanzania–Zambia Railway was conceived as a lifeline for landlocked Zambia and a geopolitical victory against apartheid South Africa and Rhodesia. Built with Chinese support, it was technically sound and politically iconic. But it struggled to sustain itself economically because copper volumes fluctuated, alternative routes improved, and non-copper freight never filled the gap. The line survives, but often on life support. Lesson: without stable anchor cargo and diversified freight, even the boldest financing crumbles.
The Standard Gauge Railway, prestige before anchor freight. Today’s SGR has shown Tanzania’s ability to mobilise billions in finance and deliver modern infrastructure. Yet, its sustainability is under scrutiny. Passenger trains make headlines, but they cannot repay the debt. The line’s long-term health hinges on heavy freight, minerals, agricultural bulks, fuel. Without credible anchor shippers locked in with take-or-pay contracts, financiers see risk rather than security. Lesson: prestige services are garnish; freight is the meal.
Kabanga Nickel, geology waits for infrastructure. The world-class nickel deposit in Kagera has attracted global attention, yet even here financing decisions hinge on whether SGR segments and stable power will be in place on time. Investors are blunt: no rail, no smelter; no power, no processing. Lesson: geology is not enough; synchronisation of enablers is what makes capital flow.
Regional peers. Mozambique’s coal corridors offer both warning and hope. Early failures stemmed from under-investment in ports and poor coordination between miners and rail. Later successes came when integrated, multi-user concessions tied mines, rail, and ports together under credible operators with clear contracts. Lesson: execution requires system-level alignment, not siloed ambition.
Each case points to the same truth: financing follows credibility, not ceremonies.
Breaking the cycle, what execution would require
If Liganga and Mchuchuma are ever to move beyond speeches, a different approach must be taken.
1. Smarter financing structures. Instead of monolithic “mega-deals,” structure blended finance packages: sovereign support for public goods (rail, power), development finance for environmental and social safeguards, private equity for mining and smelting, and commercial loans for modular expansions. Match risk with the investor best able to bear it.
2. Anchor contracts first. Mines must sign binding take-or-pay agreements with the railway. Steel offtakers must sign long-term contracts with the smelter. Power purchase agreements must be transparent and bankable. Without these, financing is speculative. With them, lenders can underwrite.
3. Phased development. Start smaller. Commission the mine and a partial rail link to an ICD before extending to the port. Build a modular smelter that can be expanded once cash flow begins. Avoid paralysis by insisting on everything at once.
4. Institutional discipline. Create a single empowered corridor authority with legal mandate to coordinate mines, rail, port, and power. Give it teeth to align ministries and enforce timelines. Hold it accountable through quarterly reporting.
5. Transparency as a risk reducer. Publish feasibility summaries, financing terms, and project timelines. This reassures citizens, pressures institutions to deliver, and lowers perceived risk for investors. Opacity raises suspicion; suspicion raises spreads; spreads kill projects.
6. Narrative honesty. Leaders must stop overselling timelines. Announcing unrealistic dates undermines credibility. Admit complexity. Say: “this is a ten-year build, with milestones every two years.” Citizens prefer a hard truth delivered once to a fantasy repeated annually.
If Tanzania does these things, financing can flow. If not, Liganga and Mchuchuma will remain national slogans, expensive ones, given the steel imports they fail to displace.
Counterarguments and answers
“These projects are too big for Tanzania.”
Yes, too big for one financier or one ministry. But not too big for Tanzania if phased sensibly and partnered smartly. Break them into bankable chunks, and they are manageable.
“Foreign financiers won’t touch coal.”
Many Western financiers won’t, but others will, Chinese lenders, Indian steelmakers, regional banks. They will, however, demand robust governance and clear contracts. Pretending ESG doesn’t matter is a mistake; structuring around it is a strategy.
“Imports are cheaper anyway.”
They may be cheaper at point of purchase, but dependence drains forex, stunts domestic skills, and leaves us hostage to global supply shocks. The hidden cost of imports is paid in vulnerability.
“We should focus only on agriculture.”
Agriculture and heavy industry are not rivals; they are partners. Farmers need steel for irrigation pipes, storage silos, and trucks. They need power for processing and cold chains. They need rail to move crops affordably. Agriculture without industry is low productivity forever.
“Tanzania cannot execute mega-projects.”
Not true. We executed TAZARA in the 1970s, the SGR today, and the Julius Nyerere Hydropower Project under immense complexity. The issue is not ability; it is governance discipline and financing credibility.
From speeches to steel
For fifty years, Liganga and Mchuchuma have been more fluent in speeches than in steel. They stand as mirrors of Tanzania’s larger challenge: geology in abundance, announcements in excess, execution in deficit. Imports grow while promises multiply.
The way forward is not more groundbreakings; it is ground truth. Secure anchor contracts. Phase development. Align institutions. Publish data. Admit timelines. Share risk wisely. These are not glamorous steps, but they are the ones that banks respect, communities trust, and furnaces need.
Tanzania must decide whether it wants another decade of banners and applause, or whether it wants rails that carry ore, furnaces that burn coal, and steel that carries our nation’s weight. The choice is not in the hills of Njombe; it is in the discipline of Dodoma.
If we break the cycle, Liganga and Mchuchuma can turn Tanzania from importer to producer, from speechmaker to steelmaker. If we do not, they will remain ghost projects, monuments to the cost of delay, measured each year in dollars wired abroad for steel we could have forged ourselves.
