Lobito Corridor key to unlocking trade
Published On January 3, 2024 » 509 Views» By Times Reporter » Business, Columns
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ZAMBIA’s envisaged economic milestones need a robust regional infrastructure link to make the country a transport hub.
The country’s drive to increase copper production to an all-time high of three million tonnes per year by 2031 from the current annual average of about 800, 000 tonnes will no doubt cause a serious logistical nightmare if measures are not put in place to expand local and regional infrastructure.
From last year, the future looks good following the country and regional commitment to develop the Lobito Corridor which links the country to the sea through Angola.
As a major highlight of 2023, member states of the Lobito Corridor, namely Angola, the Democratic Republic of Congo (DRC), and Zambia launched the concessioning of the Lobito port and the rail line.
According to President Hakainde Hichilema, the significant infrastructure will be operated under a Special Purpose Vehicle (SPV).
At the invitation of the Angolan President, the Zambian President and his DRC counterpart Felix Tshisekedi successfully implemented the long-standing Memorandums of Understanding (MoUs) among the three countries.
It is not a secret that traditionally, as President Hichilema observed, Zambia has relied on a limited number of trade routes for its goods and services.
But it is encouraging that there is a recognition for the need for additional alternatives to seaports.
Indeed, Lobito Corridor offers not only the shortest route to the sea but also serves as a vital logistics facilitator for our imports and exports.
This corridor will involve the utilisation of the rail system for the transportation of imports and exports through Jimbe border in the North Western Province.
This will relieve pressure on the roads, particularly the Solwezi-Chingola road, thus minimising damage and associated maintenance costs.
From the undertaking, the Zambian government has committed to prioritise the urgent upgrade of infrastructure in the North Western Province, thereby ensuring seamless connectivity to the Angolan and DRC routes.
During the end of year media interaction, the President indicated the long-awaited North- Western greenfield railway line initiated by former Vice-president Enoch Kavindele will be supported.
Earlier in the year, Ministers responsible for Transport and Corridor Development from Angola, Democratic Republic of Congo and Zambia, with support and coordination of the Secretariat of the Southern African Development Community (SADC), signed the Lobito Corridor Transit Transport Facilitation Agency (LCTTFA) Agreement at Lobito.
The LCTTFA Agreement aims to provide an effective and efficient route that facilitates the transportation of goods within territories between the three Corridor Member States.
This will entail coming up with harmonised policies, laws and regulations; coordinated joint corridor infrastructure development strategies and activities; dissemination of traffic data and business information.
Others will be the implementation of trade facilitation instruments to support greater participation of small and medium enterprises (SMEs) in business value chains mainly in agriculture and mining.
There is a general consensus that the Lobito Corridor, once in operation, will present an alternative strategic route to export markets for Zambia and DRC and offers the shortest route linking key mining regions in these two countries to the sea.
In Angola, the corridor connects 40 per cent of the country’s population and several large scale investments taking place in agriculture and retail in the provinces of Benguela, Huambo, Bie, and Moxico.
Already, this corridor has gotten international endorsement as United States President Joe Biden announced a US government investment of an initial $250 million to develop the Corridor at the G7 Summit in Japan in May 2023.
As commentators observe, having a robust infrastructure is one thing but what is critical as President Hichilema highlighted is having a strong an export oriented production and manufacturing that can produce goods that can utilise the corridor.
The country needs to come up with policies and practical measures to bolster growth in production and agro processing thus taking advantage of the corridor.
Apart from agro processing, there is a need to heighten value addition minerals like gold, copper, gemstones and manganese among other high and medium value minerals that can be exported.
On this score, there is a need to expedite the implementation of the electric vehicle battery value chain that has been implemented alongside the DRC.
Time is running out for the country to get more benefits from the energy revolution and the expanded regional and the global markets.
There is a need to avoid costs of the country being a transit point by participating effectively through exports and critical imports especially raw materials and oil.
With Angola withdrawing from the Organisation of the Petroleum Exporting Countries (OPEC), Zambia needs to take advantage of the development and use the Lobito infrastructure to import affordable petroleum products.
International oil speculators are holding that the withdrawal of Angola from OPEC will mean less control on Angola oil supply which will be advantageous to neighbouring countries.
This corridor should not be like the case with the Kasumbalesa border entry to the DRC where most of the goods pass through the country, damaging roads and leaving national coffers to bear repair costs which is draining.
This should not be the case with the Lobito Corridor infrastructure which the Government is envisaged to commit resources towards infrastructure upgrade on the Zambian side.
Local private business players are also called upon to strategically position themselves and make use of the infrastructure through the production of export goods and services.

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