Joe Biden’s early-December trip to Angola—his first to Sub-Saharan Africa as US president, and likely his last overseas trip in the role—underscored the stickiness of the colonial development paradigm of resource extraction that has long debilitated Africa. The major highlight of Biden’s visit related to a transnational railway initiative, which is considered by some to be the quickest and most efficient way to export raw materials and critical minerals from the Central African ‘Copperbelt’ via the Angolan port city of Lobito.
While indicative of a new era of US engagement with Africa, the Lobito Corridor project nonetheless perpetuates a highly volatile development model that focuses unduly on resource extraction and commodity dependence. Africa is the most commodity-dependent region in the world, with a median value of commodity exports of 90% of all merchandise exports, according to UNCTAD data. Such a high degree of dependency has stymied African economic development for decades, and risks undermining regional economies’ integration into emerging green global supply chains. The economic and social costs could be colossal, ranging from exporting resource rents and rising unemployment to mounting migration pressures, the latter already being exacerbated by climate crises.
Mine-related transport infrastructure that typically connects mines directly to ports—a pattern most prevalent in Sub-Saharan Africa—has been one of the most important physical representations and lasting legacies of colonialism. During the colonial era, transport and infrastructure networks in Africa were not designed to foster endogenous growth or support commodity-based industrialization. Instead, their principal objective was to maximize the extraction and transfer of natural resources and raw materials used in manufacturing processes across various industries to Europe.
Commodity-abundant nations in the Global South were reduced to resource stockpiles in the context of global economic integration, entrenching the divide between developed and developing countries. By holding the monopoly on technology and dominating the production and export of higher-value commodities, European powers widened the income gap with emerging economies in the Global South, locking the latter into a perpetual cycle of intergenerational poverty and aid dependency. Balance of payments crises became commonplace in the Global South, with the deterioration of commodity terms of trade sustaining structural current account deficits in the exclusive bilateral trade relationships between each imperial power and its respective former colonies.
Despite the multiplicity of actors both within the African continent and destination countries in the developed world, the Lobito Corridor project exemplifies these historical patterns. The 800-mile railway will connect Zambia’s Copperbelt as well as the copper, lithium, and cobalt mines of the Democratic Republic of Congo to the Angolan port city Lobito. Backed by the US and European Union (EU), the project will expedite the transportation of essential minerals—including many green minerals critical to the manufacture of electronics and electric vehicle (EV) batteries—significantly reducing transit times from 45 days by road to just 45 hours. For the EU and US, improved access to these critical minerals allows them to diversify and make their supply chains more resilient as geopolitical tensions and great power rivalries deepen and increase the weaponization of commodities.
Biden’s trip was eminently geopolitically motivated, with two key related objectives in a world set on an irreversible energy transition as the combustion engine-led growth model enters its waning years. First, securing access to minerals vital to the green transition and, second, countering China’s growing influence across Africa. China has become a significant economic player in the region, particularly in the natural resource sector and in infrastructure development. For decades, China’s engagement with Africa has prioritized infrastructure projects and investment in the region’s transportation networks, often financed by natural resource-backed loans.
China’s growing influence in Africa is also visible in the trade arena, in which it overtook the US as Africa’s largest trading partner in 2009. China has consolidated that pole position in the years since, while US imports from Africa collapsed following the country’s shale oil revolution and bid for energy independence. Angola, one of the most natural resource-dependent countries in the world—the oil sector accounts for more than 90% of Angolan exports and 70% of government revenues—was particularly affected by US’s shale revolution. Between 2012-23, Angola’s exports to the US fell by more than 88% to around US$1.2 billion, and the country’s direction of trade shifted towards Asia, with China becoming the top destination for Angolan crude oil.
However, though Africa may now be trading with different parties, the nature of the region’s trade patterns has not changed. Under the sticky colonial development paradigm of resource extraction, primary commodities and natural resources continue to dominate Africa’s exports, including around 60% of Sub-Saharan African exports to China. The region’s increasing reliance on China for manufactured goods has led to increasingly large trade deficits—the most recent estimates put Africa’s trade deficits with China at US$45.9 billion in 2022 and US$63 billion in 2023, a record high.
When challenged on the persistence and scale of trade imbalances between China and Africa, Chinese Vice Commerce Minister Qian Keming responded, “Africa must have things to sell [for China to buy].” This candid assessment again underlines the consequences of the costly development paradigm of resource extraction.
But the obstacles to growing African exports—particularly today, when trade is driven largely by intermediate and manufactured goods with increasing technological content—have a long history and have colored Africa’s engagement with both China and the US. Over the years, these hurdles have also skewed the distribution of African trade towards extra-African trade—intraregional trade has remained very low at around 15% of total African trade, compared to 60% in Asia and 70% in Europe.
Despite trade preference programs such as the African Growth and Opportunity Act (AGOA) along with benefits extended under the Generalized System of Preferences program, Africa’s trade with the US remains marginal, accounting for less than 1% of total US trade in 2023. In comparison, consider Vietnam, which accounted for more than 2.5% of total US trade last year. Vietnam’s exports to the US exceeded US$119 billion in 2023, dwarfing the US$29 billion of total exports from the 50 combined Sub-Saharan African nations.
Beyond boosting exports and sustaining high economic growth, Vietnam’s integration into high-value global supply chains has significantly raised per capita incomes and lifted millions out of poverty. It is not a natural resource-rich country, but has successfully leveraged the increasing foreign value-added content of exports to diversify its sources of growth and trade, including the production of critical electronics and other high-demand goods in the technology sector. For instance, 40% of the components in Samsung’s phones are made in Vietnam, while none are made in Africa where countries have remained confined to the bottom of global value chains as feedstocks that provide the raw materials used to produce them.
The colonial development model of resource extraction has been very costly in terms of growth, macroeconomic stability, and welfare. The ongoing net-zero transition provides the opportunity to transcend that model to promote the rise of downstream industries and boost domestic value addition from natural resources. This would enhance Africa’s integration into emerging green global supply chains, including those connected with the EV industry. More than catalyzing the injection of patient capital and technology transfer, that transition will mitigate the substantial foreign exchange reserve leakages and deadweight losses that underpin Africa’s balance of payments pressures. It would also accelerate the diversification of sources of growth to boost African trade and expand employment opportunities, stemming migration pressures in a region where abject poverty and destitution has compelled young people to relocate overseas.
Globally, transitioning to localized value chains in Africa aligns with environmental and economic priorities. That transition will accelerate the diversification of global supply chains for greater resilience and, in the process, address the persistent global macroeconomic imbalances that have become the source of trade frictions between nations. Furthermore, it will enhance the net-zero transition by reducing the shipping industry’s carbon footprint, exacerbated over the years by the highly polluting round-tripping model under which Africa’s raw materials are first exported and then imported as manufactured goods at higher prices. Demographic trends are such that this model is no longer sustainable and will only intensify carbon emissions and external imbalances.In the climate change era, boosting domestic value added from natural resources within Africa is not just good economics, but also environmentally sound.
The world has an interest in increasing downstream processing in Africa to maximize the value of and development impact of commodities and minimize the negative externalities of growth. This historical shift will ensure that African countries have things to sell to the rest of the world and to each other, boosting long-languishing intra-African trade and compounding the benefits of the African Continental Free Trade Area (AfCFTA). The returns on the Lobito Corridor investment project will be even higher if the transnational rail line is the locomotive that sustainably bolsters the export of both primary and higher-value commodities.
For the region to truly benefit from the project, policymakers and investors must look beyond short-term resource extraction and prioritize long-term, sustainable economic development. Only then can Africa move beyond its colonial legacy and become a competitive contributor to global value chains.
