The United States and the European Union will offer assistance on the construction of an international railway in Africa to bring resources from mining areas to a port in a test of whether they can gain a foothold in Africa, where China has gained influence through its Belt and Road Initiative. It is also intended to strengthen supply chains for critical minerals, reducing the donors’ dependence on China.

“This is a game-changing regional investment,” U.S. President Joe Biden said on Sept. 9, when he announced the U.S. would support the development of the Lobito Corridor in partnership with the EU. The corridor aims to strengthen a distribution network that connects Angola’s port of Lobito on the Atlantic coast to Zambia and the Democratic Republic of the Congo, inland countries that are rich in mineral resources. 

The U.S. and the EU will support feasibility studies on extending an existing railway from eastern Angola through northern Zambia, according to the U.S. government. Helaina Matza, acting special coordinator for the Partnership for Global Infrastructure and Investment at the U.S. State Department, said at a news conference on Sept. 13 that the U.S. would also finance a project to refurbish the existing railway from Angola to the Democratic Republic of the Congo. “We will do so in ways that serve our purpose of supporting democracy,” she said, drawing an implicit contrast with China’s approach.

The Democratic Republic of the Congo is the world’s largest producer of cobalt, a material essential to the production of lithium-ion batteries, which are used in electric vehicles, consumer electronics and other products. The central African country also has deposits of other critical minerals, and, along with neighboring Zambia, is a major producer of copper. Chinese mining companies are already active in both countries. Increased U.S. and EU involvement in physical distribution in Africa may help Western companies enhance their supply chains.

In Africa, China has been the first to lend a helping hand in building railways, mainly in sub-Saharan countries. In Kenya, a railway linking Nairobi, the capital, with the port of Mombasa was completed in 2017 with Chinese assistance. Work to extend the railway has continued since then, and there is a plan to extend the line to the Ugandan capital, Kampala, by 2030.

A Chinese-built railway is also operating between Addis Ababa, the capital of Ethiopia, and Djibouti, its eastern neighbor facing the Red Sea and the Gulf of Aden. A Chinese company has also received an order for railway construction in Nigeria, whose population of 200 million is the largest in Africa.

China brings strengths including generous lending and companies able to engage in large-scale projects. It does not concern itself with human rights or democracy in the countries it assists, unlike the U.S., so China tends to be welcomed by authoritarian leaders.

However, the terms of the loans China offers are often criticized as opaque, and some accuse it of setting “debt traps” in which borrowing nations are at risk of taking on debts they cannot repay and giving China influence over how resources in those countries are developed. 

Beijing has also been forced to reconsider its lavish lending. Last year, it lent just under $1 billion in Africa, according to research by Boston University. Chinese loans to Africa have continued to fall since peaking at $28.5 billion in 2016. The main reason is that defaults on loans have risen in countries that are taking part in the Belt and Road Initiative, partly because of the COVID-19 pandemic. According to a survey by U.S. research specialist Rhodium Group, loan defaults in 2020 to 2022 were worth a total of $76.8 billion, 4.5 times the amount in 2017 to 2019.

The slowing Chinese economy is also forcing its leaders to adjust their overseas investment policy. China’s foreign exchange reserves, which help fund new investments, are flat. The Belt and Road Initiative is at a turning point as President Xi Jinping has given instructions to raise investment returns from the project.

The U.S. and EU support for the Lobito Corridor is one of the first projects under the Partnership for Global Infrastructure and Investment, a framework for infrastructure development in developing countries that was agreed on at the Group of Seven summit in 2022. The G7 nations aim to provide a total of $600 billion in assistance, including private funds, under the framework by 2027.

Washington touts the Lobito Corridor project as a source of local jobs, trade promotion, strengthened supply chains and food security in African countries, as distinguished from the Chinese model, which typically comes as a package that includes Chinese workers and locomotives.

Projects such as the Lobito Corridor are “big undertakings that will take many years to bear fruit, even under the best circumstances,” said David Sacks, a fellow with the Council on Foreign Relations, a U.S. think tank.