Tanzania Zooms Ahead with New Electric Trains; Equity Pilots Insurance in DRC for Regional Rollout

Tanzania has embarked on an ambitious and transformative journey in modernizing its railway infrastructure with the recent arrival of advanced electric multiple-unit (EMU) trains from South Korea. These state-of-the-art trains, manufactured by Hyundai Rotem, signify a major leap forward in the country’s transportation sector, reflecting Tanzania’s commitment to upgrading its railway network to international standards. The new trains feature eight carriages each and are set to revolutionize the Standard Gauge Railway (SGR) route between Dar es Salaam and Dodoma, with services scheduled to commence on July 25, 2024.

The introduction of these EMU trains is a significant milestone in Tanzania’s extensive SGR project, which aims to replace the aging meter gauge railway with a modern, high-capacity rail network. The new EMUs are designed to accommodate up to 589 passengers per train, offering a comfortable and efficient travel experience. Each train is equipped with contemporary amenities such as Wi-Fi, air conditioning, designated seating for passengers with special needs, and CCTV cameras for enhanced security, ensuring a safe and pleasant journey for all passengers.

The new trains can travel at speeds of up to 160 kilometers per hour, significantly reducing travel times across key routes. This is particularly evident with the upcoming launch of an express train service between Dar es Salaam and Morogoro. The express service is poised to cut down the travel time from four hours by bus to just one hour and forty minutes. The express train will depart from Dar es Salaam at 6 am and return at 7:10 pm, while the return journey from Morogoro will start at 6:20 am and conclude at 7:30 pm. This service will increase the total number of daily SGR trips on this route to four, providing more flexibility and convenience for travelers.

The SGR project is being developed in multiple phases, encompassing a network of approximately 2,000 kilometers. The first phase, covering the 300 kilometers from Dar es Salaam to Morogoro, is nearing completion with a 98% progress rate. The subsequent phases extend the network further into the country and aim to enhance connectivity across Tanzania. Phase two, from Morogoro to Makutupora, is also well underway with a 96% completion rate, and the testing phase has already begun. This section of the railway connects Dar es Salaam with Dodoma, Tanzania’s administrative capital.

In April 2024, the Tanzania Railway Corporation (TRC) announced the arrival of the first batch of EMU trains at the Dar es Salaam port. This initial delivery included five electric locomotives and three passenger cars. TRC expects to receive a total of ten EMU sets, with the remaining units arriving monthly until October 2024. Additionally, 65 passenger cars and nine electric locomotives have already been received, further bolstering Tanzania’s railway fleet.

The broader vision for Tanzania’s SGR project is not only to enhance domestic connectivity but also to link Tanzania with its neighboring countries, including Rwanda, Burundi, and the Democratic Republic of the Congo (DRC). This extensive network is expected to facilitate the efficient movement of passengers and cargo, promoting regional trade and economic integration. The SGR will stretch from the port of Dar es Salaam on the Indian Ocean to the port of Mwanza on Lake Victoria, covering major economic zones and linking to regional trade corridors.

Each phase of the SGR project represents a significant investment in Tanzania’s infrastructure and economic future. The third phase, from Makutupora to Tabora, and the fourth phase, from Tabora to Isaka, are progressing steadily. The construction for the Makutupora-Tabora section began in April 2022 and has reached a 14% completion rate. The Tabora-Isaka section, initiated in January 2023, is currently at a 5% completion rate. The fifth phase, from Isaka to Mwanza, has made considerable progress, reaching a 54% completion rate. Finally, the sixth phase will extend the railway from Tabora to Kigoma, further enhancing the network’s reach.

The arrival of these modern EMU trains and the ongoing development of the SGR project underscore Tanzania’s commitment to building a robust and efficient railway system. This initiative is expected to have far-reaching impacts on the country’s economic growth, improving transportation efficiency, reducing travel times, and fostering regional trade. As the SGR network continues to expand and evolve, Tanzania is poised to become a pivotal player in East Africa’s transportation and logistics landscape.

Travel speed

Tanzania has acquired 10 sets of locomotives and coaches from the Hyundai Rotem Company of South Korea. Each set consists of eight wagons with a locomotive at both the front and back, capable of carrying 589 passengers and traveling at a speed of 160 kilometers per hour.

With the latest arrivals, Tanzania now possesses three EMUs. The first set, which arrived in April this year, has been used for test runs. According to TRC, they have received a total of 65 passenger wagons, 17 electric locomotives, and three sets of EMU trains, with the delivery of equipment for SGR operations continuing in different phases.

“The newly arrived equipment will continue to undergo testing for assurance before commencing provision of service,” TRC stated.

Equity Group Pilots Insurance Services in DRC: A Strategic Move Towards Regional Expansion

Equity Group is set to revolutionize its insurance services with a pioneering pilot program in the Democratic Republic of Congo (DRC), marking a significant step towards a comprehensive regional rollout. This initiative is part of a broader strategy to extend the bank’s innovative insurance products across its other key markets, including Uganda, Tanzania, South Sudan, and Rwanda. The pilot program is anticipated to provide critical insights and operational lessons that will be instrumental in refining and perfecting the insurance services before a full-scale launch across the region.

The pilot program commenced in March 2024 through a local partnership in the DRC, demonstrating Equity Group’s commitment to leveraging local expertise and understanding the unique dynamics of the Congolese market. Angela Okinda, Managing Director and Principal Officer of Equity Life Assurance, highlighted the strategic importance of this pilot during a recent shareholder meeting. She emphasized that the lessons learned from the DRC pilot would shape the insurance business’s footprint in other regional markets, with significant expansions expected in 2025 and beyond.

Equity Group has already established a robust presence in the Kenyan insurance market, where it had over 11.5 million life insurance policies by the end of May 2024. This extensive experience in Kenya has laid a strong foundation for the group’s insurance ambitions in the DRC and other regions. Equity Life Assurance, the group’s first insurance subsidiary, was operationalized in March 2022 to provide life insurance products. Over the past two years, the subsidiary has shown remarkable growth and resilience, underscoring the potential for success in new markets.

By the end of the first quarter of 2024, Equity Life Assurance had accumulated total assets worth Ksh20.8 billion and achieved a pre-tax profit of Ksh321 million, representing a staggering 106 percent growth from Ksh156 million in the same quarter of the previous year. The insurance service revenues for the unit also saw a significant increase, rising by 40 percent to Ksh508 million from Ksh364 million in the same period. These impressive figures reflect the strong performance and growth trajectory of Equity’s insurance arm, which the group aims to replicate in the DRC and other regional markets.

Equity Group’s strategic focus includes tapping into the fastest-growing insurance segments such as deposit administration and pensions, individual life assurance, and group credit life. The company aims to capitalize on the low average insurance penetration rates in East Africa and the continent at large. Despite the presence of a few insurance companies in the market, many have had limited success, presenting a significant opportunity for Equity Group to establish a dominant position.

In addition to the life insurance services, Equity Group shareholders recently approved the creation of a new health insurance subsidiary, which will be housed within Equity Group Insurance Holdings Limited. This subsidiary will oversee the group’s life and general insurance businesses. Equity Group is set to unveil new general insurance products in Kenya in the second half of 2024, further expanding its insurance portfolio and offering comprehensive solutions to its customers.

James Mwangi, CEO of Equity Group, has been a vocal advocate for the diversification of the group’s product offerings. He has consistently highlighted the strategic importance of the insurance business, noting its complementary role to the bank’s core operations and its resilience during challenging economic times. During the first nine months of operations, the insurance business delivered a return of 54 percent on equity, rising to 68 percent in 12 months, despite the balance sheet increasing fourfold. Mwangi emphasized that insurance is less sensitive to interest expenses compared to banking, thereby validating the group’s diversification strategy.

Equity Group’s insurance expansion is part of a broader vision to solidify its position as a leading financial services provider in East and Central Africa. With a strong foundation in banking, insurance, and financial technology, the group is well-positioned to drive growth and innovation across its markets. The group’s commitment to financial inclusion, combined with its strategic initiatives in insurance, underscores its mission to empower communities through accessible and reliable financial services.

As Equity Group continues to expand its insurance services, it remains focused on leveraging its extensive network and deep market understanding to deliver value to its customers. The pilot program in the DRC is just the beginning of a larger journey towards transforming the insurance landscape in the region, promising a future where more individuals and businesses can benefit from comprehensive and innovative insurance solutions.

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