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New Silk Road under pressure? Lobito Corridor, a US$5 billion, 1.300 km project aimed at surpassing China

Published 01/12/2024 às 20:34
Updated 02/12/2024 às 21:06
Lobito Corridor, New Silk Road, China, USA
Photo: Reproduction

With 1.300 kilometers in length and an investment of US$5 billion, the Lobito Corridor emerges as a strategic alternative to compete with China's New Silk Road.

China's growing economic influence through the New Silk Road in Africa is a reality that the United States can no longer ignore. Since 2009, when China surpassed the United States as the African continent's largest trading partner, the disparity Valuation between the two nations has only increased. That's why the Americans are betting on the Lobito Corridor.

China's trade volume with Africa is currently four times that of the United States, highlighting a gap that worries American strategists and policymakers.

To curb this trend, the United States have intensified their efforts to strengthen economic ties with the African continent.

A clear example of this attempt is the Lobito Corridor, a 1.300-kilometer railway that crosses Angola, the Democratic Republic of Congo (DRC) and Zambia. An investment of US$5 billion is planned, with part of that amount financed by the United States.

Announced in 2023, the initiative is seen as a direct attempt to compete with the powerful New Silk Road.

Lobito Corridor, New Silk Road, China, USA

New Silk Road – Chinese strategy and its results in Africa

A New Silk Road, launched in 2013, is one of the largest infrastructure and economic development initiatives in the world.

So far, 52 African countries have signed agreements with China, resulting in billions of dollars invested in building roads, ports, railways and other essential infrastructure.

In 2023, for example, the New Silk Road allocated approximately US $ 21,7 billion in loans for projects on the African continent.

These investments, however, are not just economic. China has also secured strategic access to Africa's vast mineral resources.

In the DRC, Chinese companies control around 72% of the cobalt and copper mines. In Guinea, China’s dominance over bauxite and the Simandou iron ore mine further reinforces its position as a major player in the exploitation of natural resources on the continent.

The Lobito Corridor: A Strategic Response

The Lobito Corridor is an attempt by the US to compete with the New Silk Road in terms of relevance and economic impact.

Announced during the European Union's Global Gateway Forum in October 2023, the project brings together efforts from the African Development Bank (AfDB), the Africa Finance Corporation (AFC), the US and the European Commission.

The aim is to connect northwestern Zambia to the port of Lobito in Angola on the Atlantic Ocean via a strategic rail network.

The US has already allocated more than US $ 3 billion to finance projects related to the initiative, covering sectors such as transportation, logistics, agriculture, clean energy, health and digital access. Much of this funding comes from Partnership for Global Infrastructure (PGI), a consortium of G7 countries created to increase Western presence in global infrastructure projects.

Infrastructure and economic impact

The Lobito Corridor foresees the construction of 550 kilometers of new railway tracks in Zambia, connecting Jimbe, on the border with Angola, to the country's copper belt, located in Chingola.

This new railway line will integrate with the existing tracks on the Angolan side of the border, forming a connection with the Benguela railway, already in operation. In addition, the project includes the construction of 260 kilometers of access roads and renovations to the old Benguela railway, with over 120 years of history.

The expected impact goes beyond infrastructure. The corridor will allow Zambia, traditionally dependent on east-facing export routes, to access the Atlantic Ocean for the first time.

This creates new trade possibilities and reduces dependence on the port of Dar es Salaam in Tanzania, which has historically been the main maritime outlet for exports of copper and other metals.

Geopolitics and natural resources

Like New Silk Road, the Lobito Corridor is more than an infrastructure project. It also serves the strategic and economic interests of the West.

By creating trade routes to the Atlantic, the project facilitates the transport of minerals and commodities essential for the energy transition, such as copper and cobalt, both of which are abundant in the DRC and Zambia.

The focus on Zambia’s copper belt is strategic. With global demand for minerals essential for green technologies such as batteries and renewable energy growing, the Lobito Corridor could become a crucial route to supply Western markets.

Furthermore, the DRC, with its vast reserves of copper and cobalt, plays a central role in this plan, consolidating the corridor as a Western alternative to the Chinese-dominated trade routes.

Challenges and prospects

While promising, the project faces significant challenges. China has already established a solid presence in Africa, with decades of economic and diplomatic engagement. New Silk Road not only invested billions in infrastructure, but also built long-term strategic partnerships with African governments.

In comparison, the Lobito Corridor is still an emerging initiative, which will need time to demonstrate its impact.

Furthermore, the financial sustainability of the project is a concern. As in New Silk Road, infrastructure investments may not be profitable immediately, but they are intended to boost economic growth in the long term. This will require a continued commitment from the countries involved, as well as effective collaboration between the public and private sectors.

Expansion Plans

Plans for the Lobito Corridor took a new turn in August 2024 when the United States revealed intentions to expand the project to Tanzania, connecting the Atlantic Ocean to the Indian Ocean.

Helaina Matza, special coordinator of Partnership for Global Infrastructure (PGI), highlighted that this expansion seeks to transform the corridor into a broad trans-African connection, reinforcing the US regional approach to the development of the continent.

Matza also brought good news about progress on the first phase of the project: the renovation of the historic Benguela railway.

Copper shipments from the Democratic Republic of Congo (DRC) to the United States have already been made via this route, marking a significant logistical breakthrough. The second phase, which includes the construction of a new railway in Zambia, is still pending the completion of feasibility studies.

Connection with the Indian Ocean and Soft Power

Expanding the Lobito Corridor to Tanzania may seem counterintuitive from a geopolitical perspective, as this opening facilitates trade to the east, where China exerts greater influence.

However, the strategy aligns with the US goal of building resilience into global supply chains. Connecting to the Tazara railway line — which already links the port city of Dar es Salaam to the Zambian hinterland — requires building just 200 kilometers of track to integrate the corridor with Indian Ocean trade routes.

Furthermore, this approach reinforces the intentions of soft power from the US, promoting good governance and regional development rather than prioritizing immediate economic benefits.

According to Matza, the goal is to ensure that critical minerals flow to global markets efficiently, creating a resilient trading system that is less dependent on unilateral agreements or dominant economic blocs, such as the one promoted by Belt and Road Initiative (BRI) from China.

Challenges for the US in Africa

Despite its ambitions, the timing of US involvement in Africa is delicate. Chinese foreign direct investment (FDI) in the continent, although falling in recent years, is still larger than that of the West. Between 2019 and 2021, Chinese FDI averaged $4 billion annually, while US FDI has underperformed in some periods.

However, the landscape is changing. China’s post-pandemic economic slowdown and challenges in maintaining high levels of lending have affected the pace of the New Silk Road.

The initiative's investment in Africa fell from $ 16,5 billion in 2021 for $ 7,5 billion in 2023, a reduction of 55%. In addition, growing concerns about excessive debt and the lack of transparency in some contracts have generated dissatisfaction in several African countries.

These factors open a window of opportunity for initiatives such as the Lobito Corridor, which presents itself as a more transparent and multilateral alternative, seeking regional and global engagement in its operations.

The multilateral perspective

Unlike China's largely unilateral approach, the Lobito Corridor prioritizes partnerships with regional and international institutions. From the beginning, the project has had the support of African Development Bank (AfDB), which plays a central role in its implementation. In 2023, the AfDB helped raise $1,6 billion to finance the project.

This multilateral collaboration brings financial and political benefits. Financially, it helps to share the burden of long-term projects with low initial profitability. Politically, it reduces fears of neocolonial exploitation by major powers such as the United States or China.

Other global players have also shown interest in the Lobito Corridor. The World Bank has contributed 300 million U.S. $ for a complementary local initiative, marking its first significant investment in African infrastructure since 2002.

The European Commission has taken on the responsibility of carrying out environmental and social impact studies to minimize damage to vulnerable communities along the route.

Too little, too late?

The question remains: Can the United States regain ground in Africa with initiatives like the Lobito Corridor? Despite China’s advance on the continent, there is still room for Western involvement.

Africa is a diverse continent, with 54 countries, each with unique development needs and different experiences with international partners.

The urgent need for capital and infrastructure creates opportunities for Western initiatives that promote more inclusive and transparent approaches. The competition between the US and China could benefit African countries by allowing them to negotiate better terms with both powers.

President Joe Biden traveled to the country on December 1 to reinforce the support of the world's largest economy on the African continent. This is Joe Biden's first trip to Africa.

To put China and the New Silk Road, Trump may support project in Angola

Although Biden's trip will take place in the final days of his presidency, Donald Trump is likely to support the project and remain a close partner of Angola when he returns to the White House in January, according to sources who were part of his first term.

Tibor Nagy, a former ambassador and former top envoy to Africa during the Trump administration, noted that the future US president will likely have two priorities on the continent: strategic competition with China and Russia, and the search for access to critical minerals.

If successful, the Lobito Corridor will not only strengthen U.S. trade and diplomatic ties with Africa, but will also contribute to a more sustainable and collaborative development model.

The expansion into Tanzania and the creation of a trans-African corridor are ambitions that show the US is willing to compete strategically, connecting the continent to global markets through innovative trade routes. With information from geopoliticalmonitor.

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Armando José de Souza
Armando José de Souza
02/12/2024 09:59

I'm just a mechanic, with no college education, but I think that anyone who trusts someone who has always acted as a tormentor is either extremely childish or a masochist who takes pleasure in his own suffering.
Europeans and North Americans have always treated poor countries like scum and will not be humanized now that they are concerned about Africans and South Americans.

Yuri Edilson
Yuri Edilson
In reply to  Armando José de Souza
02/12/2024 09:59

I thought the US was more interested in building a freight train for cobalt and copper rather than yet another wall in the South.

Jose Flavio Junqueira Enout
Jose Flavio Junqueira Enout
In reply to  Armando José de Souza
02/12/2024 12:54

Does anyone believe in Santa Claus whether it be North American or especially Chinese explorers?

Rooms
Rooms
In reply to  Armando José de Souza
03/12/2024 06:32

Exactly. Xi poked the sleeping giant, I mean, the sleepy one. From what I read a long time ago, I learned that Uncle San always saw Africa as a reserve for the future.

Mahomed Ibrahim
Mahomed Ibrahim
02/12/2024 14:05

Clearly, the Lóbito corridor is a development project with a major impact on Angola, the Southern African region and the partner countries. However, despite the social and economic benefits, the leaders of African countries must pay close attention to the contrasting interests of global powers such as the USA and China, whose geopolitical and strategic disputes could result in conflicts and wars in the region.

Humberto Jorge Palmeira
Humberto Jorge Palmeira
In reply to  Mahomed Ibrahim
02/12/2024 21:17

The great plague of poor countries is the endemic corruption of their governments, in addition to the internal conflicts that have always been present in AFRICAN COUNTRIES over the years. The exile camps on the border between the DRC and KENYA, which house no less than 175 people, supported for years by funds from foreign entities and countries, are just one of the many problems that exist there. With their own interests, each country will pull the coals to its own sardine, and then be taken seriously by the authorities of each country in question, something that I think is almost impossible in Africa today. Then it will be yet another form of colonialism, disguised, which until a few decades ago, caused so many harms to Africans. Let us wait, then, hoping that everything goes well in this auspicious American/Chinese Project, that everything works out, and that African countries will come to enjoy their development, so deserved and long overdue. So let us wait. 🙏🙏

Fabio Lucas Carvalho

Journalist specializing in a wide range of topics, such as cars, technology, politics, shipbuilding, geopolitics, renewable energy and economics. I have been working since 2015 with prominent publications in major news portals. My degree in Information Technology Management from Faculdade de Petrolina (Facape) adds a unique technical perspective to my analyses and reports. With over 10 thousand articles published in renowned media outlets, I always seek to bring detailed information and relevant insights to the reader. For story suggestions or any questions, please contact me by email at flclucas@hotmail.com.

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