Uganda, Tanzania sign 1,400km oil pipeline agreement

President Yoweri Museveni and his Tanzanian counterpart, President John Pombe Magufuli over the weekend signed an East African Crude Oil Pipe Line Agreement (EACOP) as an expression of intent to go ahead with the construction of the 1,400km oil pipeline from Hoima district in Western Uganda to the Tanzanian port of Tanga.

This follows bilateral talks between the two leaders held at State House in Dar-es-Salaam where they also discussed modalities for the implementation of the pipeline and the agreed terms of the construction.

"I am very happy to be in this State House where we have signed and concluded all the outstanding issues concerning the oil pipeline agreement. We have agreed that the value added tax to this project is deemed to have been paid," Museveni said.

Museveni said that the project itself is a culmination of a lot of work and that it showed that East Africa can do things if they want to.

"We have been negotiating on the terms of this project. It is a realization of the economic and social development of the country. This project will benefit Uganda and Tanzania. It is one of the strategic ways for the integration of the East African Community and will strengthen our relationship," he said at the press conference.

Museveni disclosed that currently Uganda has 6.5 billion barrels of petroleum oil that can be used to economically transform the country. He expressed happiness that Tanzania had agreed to help out with the project.

"Once we found petroleum oil, my idea was to refine it and sell it in the country but they told me that since consumption in Uganda is low, we need to get a way to transport it to other markets hence agreeing on the Tanga-Hoima road," Museveni explained.

He noted that historically Tanzania has constantly been a peaceful and stable country and that this factor was favourable for the construction. He added that the fact that the land system in Tanzania is easier and Tanga is a protected port, it makes it justifiable for the oil project as the waves of the ocean do not disturb the transportation.

Museveni reiterated that one of the beneficiaries of the project would be the East African Airlines, which would be able to use jet fuel once it is refined instead of importing from other countries.

"Africa is huge and we need air transport to start using its own jet fuel. Our tourism industry is also big and we need this fuel to transport tourists. Very soon, we shall be able to compete with the Gulf region," he said.

Museveni added that the oil project showed the importance of the political, social and economic integration.

Magufuli on his part was very grateful for the partnership with Uganda because it will create employment for both Uganda and Tanzania and will also be a good source of revenue.

He also noted that as a result of this project, the cost of oil in both countries would drastically reduce making it cheaper to buy.

Magufuli said Uganda and Tanzania have laid a foundation stone for the project and expressed the hope that the good that relationship between the two countries would continue.