When U.S. Secretary of State Antony Blinken visited Africa in late January, much of his talk was familiar, including a focus on threats to security and democracy, particularly in the Sahel region, where the coup occurred. Less predictable was the apparent expansion from security and health initiatives to include trade, industrialization, and infrastructure.
Mr. Blinken (quoting State Department Spokesperson Matthew Miller) emphasized “our forward-looking economic partnership and how the United States is investing in Africa’s infrastructure to foster two-way trade, create jobs at home and on the continent, and help Africa compete in global markets.”
The initiative was published in a White House fact sheet in December. The report lists a number of infrastructure-related initiatives, including $2 billion from the U.S. International Development Finance Corporation “to support strategic infrastructure,” project preparation grants from the U.S. Trade and Development Agency “to help leverage more than $3.4 billion in infrastructure financing for projects across the continent,” tailored financing packages with infrastructure components to countries including Mozambique and Kenya, and a wide range of sector-specific initiatives to provide cold-chain infrastructure to facilitate trade.
opportunity
US pivots to infrastructure
The pivot to infrastructure is notable because at a time when Chinese (many state-owned) contractors had grown to account for about 60% of the continent’s construction revenues by 2019, the US share of Africa’s contracting sector had fallen to single digits. The United States, unlike China, does not have such an oversupply of domestic contracting, nor does it have the advantage of state-owned enterprises that require Belt and Road Initiative-style international expansion. strategy. Nor do they share China’s strong rhetoric focused on infrastructure-led economic growth. As the Chinese proverb goes, “If you want to get rich, first build a road” is a common refrain in documents related to China and Africa.
It is important to note that observers often exaggerate the Chinese Communist Party’s ability to simply involve Chinese companies in African projects. However, the collaboration between the Party, state-owned enterprises, banks, and China’s private sector is much closer than that between Western governments and businesses. More specifically, these deals are powered by state-owned insurers like Sinosure, which ease the stress of African risks. These factors underpin China’s message of infrastructure-led growth.
In contrast, the United States has generally framed democracy, strong public institutions, free markets, and a free press as key ingredients for development, rather than infrastructure. This shift perhaps reflects how China has reframed its thinking about development in the so-called Global South itself, even as Beijing’s infrastructure lending is frequently framed as predatory lending.
Lobito Corridor Project
The most developed infrastructure proposal discussed so far is the Lobito Corridor project. The plan includes upgrading 1,344 kilometers (approximately 835 miles) of rail line linking the copper and cobalt mining region of the Democratic Republic of the Congo (DRC) with Angola’s Lobito port and Zambia’s mining center Ndola. The project is currently estimated to take five years. The United States has signed two memorandums of understanding related to this project, one in 2022 with the Democratic Republic of the Congo and Zambia, and the other in February 2024 with the Democratic Republic of the Congo’s state-run mining company Gecamines and the Japan Metals and Energy Security Agency.
In addition to the rehabilitation and construction of part of the railway line, the project also includes the development of logistics services, which are jointly targeted by the European Union’s Global Gateway Infrastructure Deployment Initiative. The U.S.-led Global Infrastructure Investment Partnership and Global Gateway both emphasize private sector investment. A consortium that includes Singapore-based commodity trader Trafigura and Portuguese construction company Mota Engil has announced plans to invest about $555 million in the corridor. The companies also signed a 30-year concession to operate logistics operations along the corridor.
The Lobito Corridor is key to the Biden administration’s determination to secure critical mineral supplies without Chinese involvement and aligns with the Inflation Control Act’s geopolitical strategy focused on green energy supplies.
But avoiding Chinese involvement could be complicated. Although the rail line on the Democratic Republic of the Congo side of the border still needs to be built, the Angolan side plans to unite around the Benguela railway. The Benguela Railway was renovated in the late 2000s and early 2010s by the China Railway Construction Corporation with sometimes controversial loans from the China International Fund. About a third of the shares in Mota Engil, a key member of the consortium, are also owned by China Communications Construction Company, a major state-run contractor.
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countering Chinese influence
Excluding Chinese actors will be a hurdle for both US and EU infrastructure projects in Africa. In late 2023, Global Gateway’s promise to “de-risk” Chinese investments came into question when it was revealed that Energías de Portugal SA, which had been appointed to Global Gateway’s corporate advisory board, was partly owned by state-run construction giant China Three Gorges Group.
This is just one example of how Chinese actors are integrated into both African railways and the continent’s broader construction sector. Chinese contractors account for an average of 61.9% of Africa’s construction market, with this share significantly exceeding 80% in some countries. The political networks and on-the-ground operational knowledge these statistics demonstrate mean that Chinese influence in Africa is a structural reality that needs to be factored into project planning.
Furthermore, the interest shown by Angola, Zambia and the Democratic Republic of Congo in cooperating with the Group of Seven (G7) countries, reflecting the need to diversify mining stakeholders, should be seen in light of the long history of Chinese investment, contracts and markets in all three industries.
Secure private sector buy-in
One of the key issues underlying the US and G7 infrastructure initiatives in Africa is the involvement of a powerful but risk-averse Western private sector. Let’s take the Lobito Corridor as an example. Despite the initiative’s emphasis on private sector involvement, only one Western mining company, Canada’s Ivanhoe, has so far signed a (non-binding) agreement to export minerals through the Lobito Corridor.
Although it is easy to exaggerate the Chinese government’s influence over Chinese contractors, Chinese contractors are probably more sensitive to political pressure than their Western counterparts. This has made attracting Western companies and private financial institutions a political and deal-making challenge, increasing pressure on Western governments to demonstrate clear risk avoidance and return-on-investment strategies. The Lobito Corridor project shows that efforts by G7 governments have so far failed to overcome long-held perceptions of African risks among Western businesses.
It is also unclear how to deepen engagement without imposing on African countries the burden of unfair risk premiums and tax breaks that threaten the attractiveness of such projects. This is particularly notable given that, unlike Zimbabwe’s pressure on Chinese lithium companies, these efforts are unlikely to force Western companies to refine their mineral resources. Instead, the Lobito Corridor now appears to be purely mining-oriented, which makes it less attractive to Africa.
Dealing with political uncertainty
One of the biggest challenges to the Biden administration’s new approach to Africa may be domestic. African leaders are closely monitoring the 2024 US presidential election, with a growing recognition that major cooperation initiatives with the US could face reassessment depending on the outcome.
Countering China’s influence in Africa’s critical mineral fields has bipartisan support among U.S. lawmakers, but the approach to doing so may vary from administration to administration. More broadly, U.S. involvement in Africa also tends to be gradual, potentially complicating multi-year infrastructure projects.
This uncertainty may make African policymakers reluctant to alienate relatively predictable trade and infrastructure partners like China in favor of untested engagement with the United States. This could increase tensions with the US over collaboration with Chinese technology providers like (for example) Huawei.
The need for creative solutions
From Africa’s perspective, the G7’s renewed commitment to infrastructure-led growth is a refreshing change. This responds to Africa’s growing concerns about over-reliance on China, while raising expectations that the continent’s profits from significant mineral deposits will increase.
However, these efforts face the challenge of overcoming cynicism in Africa over the ebb and flow of Western interest, especially compared to China’s consistent (if frequently problematic) presence in key mineral sectors.
U.S. policymakers interested in deepening engagement with Africa would be advised to coordinate U.S. efforts to secure critical mineral supply lines with African policies aimed at moving up value chains.
Additionally, addressing local demand for power and other key infrastructure (both regionally and in the communities surrounding the project site) fosters broader community buy-in for these projects.
More broadly, the structural embeddedness of Chinese actors in Africa’s infrastructure sector is unlikely to change in the near future. Finding creative ways to secure strategic supply chains without putting undue pressure on African governments to choose external partnerships could reduce risk aversion on the African side.
Cobus van Staden is Editor-in-Chief of the China Global South Project and a Visiting Senior Expert at USIP.
