16.12.2024
The Lobito Trans-Africa Corridor is indeed a true reflection of how marine and railway transportation services are intertwined in fostering economic cooperation and enhancing inter-continental trade integration, said Dr. Kelvin Kamayoyo, Zambian Economist and Technical Advisor for African Rivers a nonprofit international nongovernmental organization. The infrastructure development corridor initiative has positive externalities arising from the perceived United States geopolitical competition with China which in the last twenty [20] years has muscled up corporate control of several mines on the continent of Africa. The recent not uncommon economic and social arguments by myriad stakeholders, that Africa is on the right trajectory towards accelerated growth is more compelling amidst regional infrastructure developments, increased greenfield investments especially in the mining sector and trade facilitation infrastructure, such as the Lobito Trans-Africa Corridor. The promising steady socio-economic transformation of the continent is anchored on its abundant natural resources, maturing democracy and improved governance systems including continued peace and stability across nations. All these factors are critical ingredients in strengthening mutually beneficial global partnerships, and enhancing transparency and accountability in the manner the natural resources are harnessed.
During this week’s
Partnership for Global Infrastructure and Investment [PGI], Lobito Trans-Africa Corridor Summit in Angola, that primarily brought together leaders from the United States, Zambia, Democratic Republic of the Congo [DRC], and Tanzania the leaders affirmed their commitment to continue developing the Corridor and increase investment in infrastructure to connect the Atlantic and Indian Oceans. The Summit further underscored the importance of enabling sustainable private sector investments that potentially would unlock inclusive economic growth and stimulate sustainable development for both local and regional communities.
The Atlantic Ocean has within the ambit of the Lobito Trans-Africa Corridor demonstrated to be a viable trade facilitation conduit that is capable of bridging the global infrastructure gap in order to spur regional economic development and enhance cost efficient inter-continental connectivity. The Lobito Trans-Africa Corridor is a multinational ambitious regional infrastructure project with an estimated budget of $6billion plus, while covering a total distance of over 2,200-kilometer railway lines, from the port of Lobito on Angola’s Atlantic Ocean coastline through Zambia to the Democratic Republic of Congo [DRC] with intent to annex Tanzania in the near future. The three [3] regional African countries belong to the Southern African Development Community [SADC] regional economic grouping and are among the thirty-eight [38] subSaharan eligible African countries under the African Growth and Opportunity Act [AGOA], which is a United States unilateral trade preference program providing developing countries with more than 6,600 product lines enjoying duty-free market access.
The Lobito Atlantic Corridor is anchored on core railway lines investments traversing multiple regional African countries [i.e. Angola, Zambia and Democratic Republic of Congo], aimed at smoothly connecting Africa to the United States of America through increased inter-trade intensity and economic diversification. Most importantly for the United States within it’s Group of Seven [G7=Canada, France, Germany, Italy, Japan, The United Kingdom, and The United States] and partners, the Lobito Railway project is a strategic and transformative economic corridor aimed at boosting it’s ability to increase access to Africa’s critical minerals [exempli gratia, copper, cobalt and lithium] as crucial to sustaining the growth of the consumer technologies and enhancing climate adaptation strategies. The anticipated benefits of the Lobito Railway Corridor are immeasurable both in theory and practice due to comparative variable geometry of the specific African countries involved and considering the market size of the world’s largest economy, United States.
The success of the Lobito Atlantic Corridor will depend, inter alia, on the efficient and effective management of the regional railway line systems and how the critical minerals are exploited, and the overall impact on the continent’s economic future. The Lobito Corridor is likely to yield multiplier-effects thereby inducing growth in associated sectors such as tourism, agriculture, livestock, transportation and logistics, clean energy, health, and e-commerce. Notwithstanding the anticipated ripple effects in these sectors, there is still need to increase investment in the water sector [i.e. river restoration and watersheds preservation], and environmental protection in order to aggressively combat climate change.
However, the vividly and immediate economic argument for African countries in support of the Lobito Corridor is largely focusing on anticipated job opportunities, improved trade relations, discovery of new markets for their critical minerals, financial assistance to inject as capital in priority sectors, and support towards building climate resilience, going forward. Conversely, the United States is particularly anticipating to expand wealth creation opportunities for its private sector players or investors and also stockpile sufficient quantities of critical minerals which are expected to rise exponentially in the decades ahead as the world priorities transitioning to greener energy technologies amidst the unrelenting climate change. Therefore, African countries may wish to consider embracing some practical strategies to help maximize the full benefits of the Lobito Trans-Africa Corridor which may include: strengthening the regional institutional frameworks to enhance railway operations by incorporating Southern African Development Community [SADC] and establishing a dedicated regional authority to manage the railway corridor; develop a Comprehensive Lobito Trans-Africa Action Plan to help promote inclusiveness, economic diversification, strictly track implementation of regional development projects and strengthen regional industrial value chains; harmonize regional policies; and encourage company mergers [i.e. help to empower local entrepreneurs to own reasonable amount of shares in the mines which is their natural resource and other business ventures associated with economic cooperation for meaningful inclusive socioeconomic transformation] to promote synergies and technology transfer.
Furthermore, there is need to prioritize the integration of the road networks or spinal nerves, and regional marine transportation services or channels which can then be linked to the Lobito Railway Corridor which is a spinal cord of trade facilitation. The Lobito Atlantic Corridor will bring about tangible benefits by playing an active catalytic role in operationalizing the African Growth and Opportunity Act [AGOA] which has been in existence for over 24 years. AGOA is available for utilisation by the 2024 approved 38 eligible subSaharan African countries which include; Zambia, Angola, and Democratic Republic of Congo. The African Growth and Opportunity Act (AGOA) is a non-reciprocal trade preference program where the United States provides duty-free market access to the eligible subSaharan African countries. An exciting development that gives policy space, predictability and sustainability to the economic cooperation between the United States and the subSaharan African countries is that the AGOA program which was set to expire in 2025, has since been extended to 2041 pursuant to the United States-AGOA Renewal and Improvement Act of 2024.
Apparently and not wishing investor confidence erosion, African countries including the core Member States of the Lobito Corridor, ought to seize this opportunity to undertake investment and tax reforms in their respective mining sectors in order to significantly and sustainably benefit their economies, protect the environment, create wealth for their people and improve citizens’ livelihoods, going forward. This is also an opportunity for the artisanal miners to consolidate their formations and strengthen production capacities so that they can participate in the supply chain of the Lobito Railway Corridor. The success of the Lobito Railway corridor requires concerted efforts from all various stakeholders as such there is need to rollout targeted sensitisation programmes using different engagement approaches [i.e. community regional workshops, mass media and outdoor media, internet and social media marketing, digital and mobile marketing, audio-visual, and special events and outreach activities such as expos and indaba] to educate the general public and communities near the mines, port and those living alongside the railway line systems about the benefits of the project.
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