Creativity needed to secure supply chains and avoid pressuring African countries to pick between the United States and China.
An interesting trend is emerging in U.S.-Africa relations: even as the United States moves to counter Chinese influence in key sectors like critical minerals, China's influence in Africa is subtly reshaping the United States' own approach to engaging with the continent.
An interesting trend is emerging in U.S.-Africa relations: even as the United States moves to counter Chinese influence in key sectors like critical minerals, China's influence in Africa is subtly reshaping the United States' own approach to engaging with the continent.
When U.S. Secretary of State Antony Blinken's visited Africa in late January, many of his talking points were familiar, including a focus on threats to security and democracy, particularly in the coup-ridden Sahel region. Less predictable was a seeming expansion from security and health engagement to include trade, industrialization and infrastructure.
Blinken emphasized (in the words of State Department spokesperson Matthew Miller) "our future-focused economic partnership, and how the United States is investing in infrastructure in Africa to boost two-way trade, create jobs at home and on the continent, and help Africa compete in the global marketplace."
This engagement was laid out in a White House fact sheet in December. It listed numerous infrastructure-related initiatives, including $2 billion from the U.S. International Development Finance Corporation "supporting strategic infrastructure," project preparation grants from the U.S. Trade and Development Agency to "help leverage more than $3.4 billion in infrastructure finance for projects across the continent" and individual financing packages with infrastructure components for countries, including Mozambique and Kenya, as well as broader sector-specific commitments to provide trade-boosting cold chain infrastructure.
The Opportunities
The U.S. Pivot to Infrastructure
The pivot to infrastructure is notable because the United States' share of the African contracting sector fell to single digits during the era when China's (frequently state-owned) contractors grew to occupy about 60% of the continent's construction revenue by 2019. Unlike China, the United States doesn't have such a domestic oversupply in contracting, nor the preponderance of state-owned companies to necessitate a Belt and Road Initiative-style international expansion strategy. It also doesn't share China's strong rhetorical focus on infrastructure-driven economic growth, which has made "as an ancient Chinese proverb says, if you want to get rich first build a road" into a ubiquitous cliché of China-Africa documents.
It's important to note that observers frequently overstate the Chinese Communist Party's ability to simply deploy Chinese companies to participate in African projects. That said, coordination between the party, state-owned companies and banks, and the Chinese private sector is much closer than between Western governments and companies. More specifically, these deals are sweetened by state insurers like Sinosure, who soften the stress of African risk. These factors undergird China's messaging around infrastructure-driven growth.
In contrast, the United States has generally framed democracy, strong public institutions, free markets and a free press--not infrastructure--as the key building blocks of development. The shift arguably reflects how China has reshaped thinking about development in the so-called Global South itself, despite the frequent framing of Beijing's infrastructure financing as predatory lending.
The Lobito Corridor Project
The most developed infrastructure proposal on the table so far is the Lobito Corridor project. It entails upgrading a 1,344 km rail line (about 835 miles) linking the copper and cobalt mining regions of the Democratic Republic of the Congo (DRC) with the Angolan port of Lobito and the Zambian mining center of Ndola. At present the project is estimated to take five years. The United States has signed two memoranda of understanding related to the project, one with the DRC and Zambia in 2022, and one with the DRC's state mining company Gécamines and the Japan Organization for Metals and Energy Security in February 2024.
In addition to refurbishing and building parts of the rail line, the project also involves the development of logistics services, jointly covered by the European Union's Global Gateway infrastructure rollout initiative. Both the U.S.-led Partnership for Global Infrastructure Investment and the Global Gateway emphasize private sector investment. A consortium including the Singapore-based commodities trader Trafigura and the Portuguese construction company Mota-Engil announced plans to invest around $555 million in the corridor. The two companies also signed a 30-year concession to run logistics operations along the corridor.
The Lobito Corridor is key to the Biden administration's determination to ensure supplies of critical minerals free from Chinese involvement, and dovetails with the Inflation Reduction Act's geostrategic focus on green energy supplies.
However, warding off Chinese involvement could be complex. While the rail link on the DRC side of the border still has to be built, the Angolan side will cohere around the Benguela Railway, which was upgraded during the late 2000s and early 2010s by China Railway Construction Corporation, with a loan from the sometimes controversial China International Fund. About a third of Mota-Engil, a key consortium member, is also owned by China Communications Construction Company, a large state-owned contractor.
The Challenges
Countering Chinese Influence
Eliminating Chinese actors will be a hurdle for both U.S. and EU infrastructure projects in Africa. In late 2023, the Global Gateway's pledge to "de-risk" its investments from China faced doubts when it was revealed that Energias de Portugal SA, appointed to a Global Gateway corporate advisory board, is partly owned by the state-linked construction giant China Three Gorges Corporation.
This is only one example of how embedded Chinese actors are in both African rail and the continent's construction sector more broadly. Chinese contractors occupy on average 61.9% of the African construction market--in some countries, this share is well north of 80%. Both the political networks and the on-the-ground operational knowledge represented by these statistics mean that Chinese influence in Africa is a structural reality that will have to be factored into the project planning.
In addition, while Angola, Zambia and the DRC's interest in working with the Group of Seven (G7) reflects a need to diversify their mining industry stakeholders, it should be seen against the history of the massive long-term centrality of Chinese investment, contracting and markets in all three mining industries.
Securing Private Sector Buy-in
One of the key issues underlying the United States and G7's infrastructure initiatives in Africa lies in involving a powerful, but risk-averse, Western private sector. Take the Lobito Corridor: despite the initiative's strong emphasis on private sector involvement, only one Western mining company--Canada's Ivanhoe--has so far signed a (non-binding) agreement to export minerals via the Lobito Corridor.
While it is easy to overstate the Chinese government's leverage over Chinese contractors, the latter are arguably more responsive to political pressure than their Western counterparts. This makes enticing Western companies and private financers a political and deal-making challenge, and increases the pressure on Western governments to demonstrate clear de-risking and return on investment strategies. The Lobito Corridor project shows that the commitment from G7 governments has so far not overcome long-held perceptions of African risk among Western companies.
It Is also unclear how to deepen involvement without burdening African countries with undue risk premiums and tax breaks that would threaten such projects' attractiveness. This is especially salient if one takes into account that, unlike Zimbabwe's pressure on Chinese lithium companies, these initiatives are unlikely to force Western companies to refine minerals at source. Instead, the Lobito Corridor currently seems destined to be purely extractive, which tempers its attractiveness to Africa.
Addressing Political Uncertainty
One of the biggest challenges to the Biden administration's new approach to Africa could lie at home. African leaders are closely watching the 2024 U.S. presidential elections, and there is a widespread perception that key cooperation initiatives with the United States may face reappraisal depending on the outcome.
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While countering Chinese influence in the African critical minerals sector enjoys bipartisan support among U.S. lawmakers, the mode to pursue it could fluctuate depending on the administration. More broadly, U.S. engagement with Africa also tends to move through phases, which could complicate multiyear infrastructure projects.
These uncertainties could make African policymakers less willing to alienate a relatively predictable trade and infrastructure partner like China in favor of untested engagement with the United States. This could, in turn, raise tensions with the United States around (for example) working with Chinese tech providers like Huawei.
A Need for Creative Solutions
From an African perspective, the G7's renewed engagement with infrastructure-driven growth is a refreshing change. It responds to growing African concern about overdependence on China, while boosting hopes of increasing the continent's benefit from its critical mineral deposits.
However, these engagements face the challenge of overcoming cynicism in Africa about the waxing and waning of Western interest, compared to the consistent (if frequently problematic) presence of China, especially in the critical minerals field.
U.S. policymakers interested in deepening this engagement with Africa would be advised to coordinate U.S. initiatives to secure critical mineral supply lines with African policies aimed at moving up value chains.
In addition, being responsive to local demand (both regionally and from communities around project sites) for electricity and other key forms of infrastructure will facilitate broader community buy-in for these projects.
More broadly, the structural embeddedness of Chinese actors in the African infrastructure sector is unlikely to change in the near term. Finding creative ways of securing strategic supply chains without putting undue pressure on African governments to choose external partnerships could lessen risk aversion on the African side.
Cobus van Staden is the managing editor of the China-Global South Project and a USIP visiting senior expert.
