Tanzania in the mix as US-China trade battles shift to Africa

Both superpowers pursue strategic investments in Tanzania and Angola’s respective transport corridors (Dar es Salaam and Lobito), aiming to secure access to critical resources for the global economy. These resources likely include copper and cobalt, essential for both the energy transition and electronics manufacturing, including smartphones.

Two companies, Singapore’s Trafigura and Canada’s Ivanhoe Mines, recently signed a deal to export copper from the Democratic Republic of Congo (DRC) using the Lobito rail route in Angola. This agreement marks a significant development for the corridor, which stretches from the Angolan port city of Lobito to the DRC’s copper-rich Katanga province.

At the Mining Indaba industry summit, Trafigura announced that Ivanhoe’s Kamoa-Kakula mine would be allocated capacity on the line. This move underscores the growing importance of the Lobito Corridor for transporting resources from central Africa to international markets.

Meanwhile, the United States has committed to funding the construction of the entire 1,300-kilometre rail line. Additionally, they are exploring options with multinational lenders to further expand the project into Tanzania, potentially creating a transcontinental connection between the Atlantic and Indian Oceans.

This development can be seen as part of a wider geopolitical competition between the US and its allies and China, both vying for influence in Africa. China has been actively investing in African infrastructure projects, often in exchange for mineral access. The US, through initiatives like the Lobito Corridor, seems to be adopting a similar approach, potentially offering alternative development partnerships to African nations.

However, Tazara believes that Tanzania is strategically and geographically positioned in an advantageous location for the smooth movement of minerals from the DRC and Zambia to the global market.

The authority says Tazara remains the shortest route for the transportation of raw materials to their final destination, which is mostly in the Far East.

“We welcome the opening of the Lobito line and the competition it brings, as it will spur us to higher efficiencies in operations,” says Tazara managing director and CEO Bruno Ching’andu. In his written response to The Citizen, Mr Ching’andu says Tazara’s focus was on leveraging existing strengths, partnerships, and infrastructure to ensure the authority remains a viable and competitive option in the transportation of critical minerals.

Furthermore, he says Tazara has embarked on the revitalization of the infrastructure and the provision of new rolling stock with the Chinese, which will increase reliability and improve transportation as well as the delivery of goods.

He insisted that the initiative would attract an increased number of neighbouring countries moving their cargo through the railway linking Tanzania and Zambia. “The perceived ‘US-China tussle’ on trade issues in Africa presents many opportunities and a chance for African nations to negotiate favourable terms, diversify partnerships, and attract investments that contribute to sustainable development,” he says.

“It is crucial for the region to carefully navigate these dynamics, ensuring that their national interests and development goals are prioritised in any engagements with global powers,” he adds.

He asserts that the Lobito Corridor and the Dar es Salaam Corridor offer complementary prospects, serving distinct markets and providing alternative routes. “As the tracks of diplomacy and development intertwine, the region can benefit from harmonious enhancement of regional connectivity, trade, and economic growth,” says Mr Ching’andu.

However, the spokesperson of the US Embassy to Tanzania, Ms Kalisha Holmes, says in her response to this newspaper that the development of the Lobito Corridor and Tazara railway revitalisation represent a historic opportunity to build Africa’s first transcontinental railway, linking Dar es Salaam in the east to Lobito in the west.

“This would unlock tremendous economic growth and development potential across Tanzania, Zambia, and Angola, therefore benefiting citizens of all three nations,” she says.

“We see the construction of the Lobito Corridor and the revitalization of the Tazara line as complementary transportation projects that will be stronger and more beneficial if they are linked and interoperable,” she adds. Furthermore, she says the US is working with both the Lobito Corridor and Tazara to ensure that the lines are compatible, deliver economic growth and development to the citizens of all three countries, and establish Africa’s first transcontinental rail link.

“As Secretary Blinken (US Secretary of State Antony Blinken) has said, we encourage responsible investment in Africa, and we want to offer African countries choices instead of limiting them,” she says.

“Our Africa policy is about Africa. In Tanzania, we are focused on deepening and strengthening our great partnership with the country, which is exemplified by the return of the MCC (Millennium Challenge Corporation) threshold programme and unrivalled leadership in development, especially in the health sector and food security,” she adds.

According to her, the recently signed US-Tanzania Commercial Dialogue and promotion for the expansion of US investments in energy, mining, ICT, tourism, and other sectors will further economic development.

The embassy of China to Tanzania couldn’t comment on the said geopolitical battle as it had temporarily closed businesses in the country for the Chinese New Year or Spring Festival celebrations. However, Open University of Tanzania (OUT) lecturer on economics, Dr Lawi Yohana, said the Lobito Corridor wasn’t a threat to Tazara, citing the country’s geographical location as an added advantage. “The route is also short and low cost for transporters because the global economy has shifted to the East (China, Japan, among others), increasing world demand for raw materials,” he said over the phone.

“The global east now attracts industrial investment even from giants from the west,” he added, insisting that despite the competition, Tanzania has a comparative advantage.

An economist from the University of Iringa (UoI), Prof Enock Wiketye, said the two countries were struggling to win the continent’s market and abundant natural resources for their industries. “The US has seen how China is conquering the continent after Beijing’s penetration, including West Africa, which could threaten Washington,” he said. “DRC is the world’s most resource-rich country, where giant nations pay attention. The US intends to get part of the region’s natural resources instead of remaining a spectator,” he added.

However, he said the success would depend on the nation’s conviction and African countries’ perceptions of the giants, stressing that the ongoing situation was an opportunity for both Tazara and Tanzania.