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Africa Destiny: Zambia’s Bad Credit Bet for China and West Good Mining Gamble

Contact author – saidcherkaoui@triconsultingkyoto.com – When the Missionaries arrived, the Africans had the Land and … Continue reading

Africa: New Mining Turf for West – Far East International Competition

This is the time for African Rulers and decision-makers to have a better place at the table of the distribution of international investment mapping and localization around the world.

Africa has the opportunity not to rely just on foreign aid by presenting an image where investment is made for small projects by small businesses, women-owned businesses, and locally and regionally enclaved initiatives that are more for subsistence and self-sufficiency.   These projects are too small to reach the level of defining national policy or to contribute to the overall development of regional localities or national levels. 

As luck would have it, Germany on one side and the European Union on the other with the USA, Lobito while Zambia had just hit a slump in terms of paying its international debts. Investment does not wait, it is better to strike the iron while it is red, and hot in front… Hot is coming watch out and make way, and the train of capital is disembarking in the remote mines of the heart of Southern Africa to remove China from the landscape and from the African horizon which also aims to reduce the expansion of the Belt and Road Initiative (BRI).

China Belt and Road Initiative Linking Asia with Africa and Europe

The Belt and Road Initiative is a global infrastructure development strategy adopted by the Chinese government in 2013. The BRI aims to connect Asia with Africa and Europe via land and maritime networks. 

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China Global Strategy Built with BRIC and BRI

Rooted in history, the BRI carries forward the Silk Road spirit At around 140 … Continue reading China Global Strategy Built with BRIC and BRI

The goals of the BRI are to: 

  • Improve regional integration
  • Increase trade
  • Stimulate economic growth
  • Create facilities connectivity
  • Promote unimpeded trade
  • Promote financial integration
  • Promote people-to-people bonds

The BRI is also known as the “One Belt One

Road” (OBOR), the “Silk Road Economic Belt and the 21st-century Maritime Silk Road” or just the “New Silk Road”. The BRI has invested in more than 150 countries and international organizations. The BRI investment projects are estimated to add over USD 1 trillion of outward funding for foreign infrastructure over the 10-year period from 2017.  The BRI has also increased China’s influence in Africa by providing loans to participating countries to construct infrastructure in various sectors.  The BRI has helped to fill infrastructure gaps and boost economic growth in participating countries. As of August 2023, 155 countries have signed up to the BRI. This includes 53 out of 54 African nations. 

The projects in Africa focus on transport and power, including: 

  • International rail and expressways
  • Seaports
  • Hydropower
  • Carbon-based power
  • Water supply and sanitation

The BRI has the following positive effects: 

  • Sharing China’s development experience
  • Linking up with other national economies
  • Enhancing the long-term foundation for world development
  • Rebalancing maritime and land globalization
  • Rebuilding a more inclusive and equitable global economy
  • De-Westernization (de-centralizing)

The BRI and the initiative were translated by China into billions of dollars invested in the construction of roads, ports, railways, and other critical infrastructure. These projects are not only enhancing connectivity within the continent but also providing China with unprecedented access to Africa’s vast mineral wealth, particularly in countries like Zambia and the Democratic Republic of Congo (more than 80% of copper mines in the DRC for instance are already Chinese-owned), which boast abundant reserves of copper and other essential minerals. Overall, China has spent more than a trillion dollars on projects at least partly intended to secure the supply of resources key to the energy transition.

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Lobito Corridor and the Lesson Learned from the BRI by the U.S. and the European Union

Direct intervention of the authorities of the United States and the European Union in shaping the landscape for investors and operating companies as the scouts and the explorers if not the preparatory of the deals to be concluded and guaranteed by the African governments to be allocated directly without any offer or bid as used to be the case for international projects and projects that African countries were seeking foreign investments for their materialization.

Therefore, the representatives of the U.S. and the European Commission are acting as prospectors, negotiators, and deal-makers on behalf of their national companies. This approach is also consolidated by the willingness of Western-based financial institutions to be part of this move by supporting projects where U.S. and European governments are setting the pace of negotiations and the process of facilitating their conclusion.

The United States and the European Union welcomed the recent commitment by Angola, Zambia, and the Democratic Republic of the Congo to develop the Lobito Corridor.   The Lobito Corridor has the potential to generate significant economic benefits for Zambians by upgrading critical infrastructure, expanding export possibilities, boosting the regional circulation of goods, and promoting job creation and regional travel.

The Authorities of Washington are directly involved in securing the environment and the countries that are going to be part of this project and delegations of U.S. Diplomats and Officials have been visiting the capitals of the neighboring African countries:

November 21, 2023: Readout of Director of National Intelligence Avril Haines’s Travel to the Democratic Republic of Congo and Rwanda

Director of National Intelligence (DNI) Avril Haines traveled to Rwanda and the Democratic Republic of Congo (DRC) on 19-20 November. The DNI was joined by Assistant Secretary of State for African Affairs Molly Phee and Special Assistant to the President and NSC Senior Director for African Affairs Judd Devermont.

DNI Haines met with Rwandan President Kagame and Congolese President Tshisekedi to secure commitments from both leaders to de-escalate tensions in eastern DRC. Acknowledging the long history of conflict in this region, Presidents Kagame and Tshisekedi plan to take specific steps to reduce current tensions by addressing the respective security concerns of both countries. The steps are drawn from previous arrangements reached with the support of neighbors under the Luanda and Nairobi processes.

The U.S. government welcomes, and intends to monitor, these DRC and Rwandan steps towards de-escalation, and plans to support diplomatic and intelligence engagements between both countries to foster greater security and prosperity for the Congolese and Rwandan peoples.

Acting Special Coordinator Matza’s trip follows a joint statement last month from the United States and the European Union on support for the development of the Lobito Corridor.  Prior to that, at the G7 Summit in Japan in May 2023, President Biden announced a U.S. government investment of an initial $250 million (5 billion kwacha) to develop the Corridor.

The primary objective of Special Coordinator Matza’s visit to Zambia was to prepare for launching the feasibility study for the Zambia-Lobito railway and to explore developing projects across multiple sectors in Zambia.

LUSAKA – U.S. Acting Special Coordinator for the Partnership for Global Infrastructure and Investment, Helaina Matza , traveled to Zambia on October 19 and 20, 2023 to advance U.S., Zambian, and EU efforts to develop the Lobito Economic Corridor and the Zambia-Lobito Greenfield railway, which connects the Democratic Republic of the Congo and Zambia with global markets through Angola.

During her visit to Zambia, Acting Special Coordinator Matza and U.S. Ambassador to Zambia Michael Gonzales met with President Hakainde Hichilema, Minister of Finance Situmbeko Musokotwane, Minister of Energy Peter Chibwe Kapala, and other senior government officials to discuss how the United States and Zambia can best partner together to develop the Corridor.  The delegation held multiple discussions with logistics, mining, agricultural, and energy companies to discuss how technical and financial resources can be leveraged to benefit the project and how the corridor can spur investment and job creation in these sectors.  They also met with the European Union Ambassador to Zambia to strengthen U.S.-EU collaboration on the project.

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The Lobito Corridor is a multimodal transport facility in Africa. It consists of a network of roads, railway lines, airports, and the Port of Lobito. The project involves laying hundreds of miles of track from Zambia’s Copperbelt province to an existing line in Angola. 

The Lobito Corridor is expected to: 

  • Facilitate regional integration
  • Grow trade across Angola, Zambia, and the DRC
  • Increase regional competitiveness
  • Generate significant economic benefits for Zambians

The Lobito Corridor Project has three main components: 

  • Capacity building for trade facilitation and corridor coordination
  • Technical assistance for value chains and economic cluster development
  • Project management

The Lobito Corridor has the potential to generate significant economic benefits for Zambians by upgrading critical infrastructure, expanding export possibilities, boosting the regional circulation of goods, and promoting job creation and regional travel. 

As an immediate next step, the United States and the European Union will support the Governments in launching pre-feasibility studies for the construction of the new Zambia-Lobito railway line from eastern Angola through northern Zambia. This builds on the initial U.S.-led support to refurbish the railway section from the Lobito port in Angola to the Democratic Republic of the Congo.

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“Once transport infrastructure connecting all three countries is fully operational, the Corridor will enhance export possibilities for Zambia, Angola, and the Democratic Republic of the Congo, boost the regional circulation of goods, and promote the mobility of citizens. By significantly reducing the average transport time, the new railway will lower the logistics costs and carbon footprint of exporting metals, agricultural goods, and other products, as well as for future development of any mineral discoveries.

The United States and the European Union plan to explore cooperation in three specific areas:

  • i) Transport infrastructure investments;
  • ii) Measures to facilitate trade, economic development, and transit; and
  • iii) Support related sectors to fuel inclusive and sustainable economic growth and capital investment in Angola, Zambia, and the Democratic Republic of the Congo in the longer term.

Specifically, this includes developing clean energy projects to increase the power supply to surrounding communities, supporting diversified investment in critical minerals and clean energy supply chains, extending digital access, growing agriculture value chains to enhance local food production for the region’s expanding population and to address global food insecurity, as well as augmenting local workforce training, support for small and medium enterprises and economic diversification.” Click here to read more on this.

To contact the Author for public speaking, advising, or consulting engagement, please send an email to: saidcherkaoui@triconsultingkyoto.com

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Lobito Corridor: United States and European Union Direct Entrance in Mining Industry