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Catalyzed by geopolitical competition with the People’s Republic of China (PRC), and crises like the COVID-19 pandemic, the United States is approaching issues like the production and use of potentially strategic technologies as key national security issues. This recalibration, known as “de-risking,” has highlighted the vital concern of supply chain vulnerabilities, particularly in the sectors of strategic technologies and critical minerals.
Critical minerals, essential for key strategic and economic products such as batteries and semiconductors, are currently at the heart of a geopolitical dilemma. Today, the PRC produces over 85% of rare earth minerals and is responsible for 76% of cobalt mined in the Democratic Republic of the Congo (DRC), which itself provides nearly half of the world’s cobalt supply. In this climate of geopolitical competition, the United States considers the PRC’s significant influence over these critical industries unacceptable. This is particularly evident with the PRC’s near-monopoly on Gallium, vital for certain semiconductors used by the U.S. Military, and its use of this position to limit exports of the key mineral.
To address this strategic vulnerability, the United States is beginning to invest in domestic and allied manufacturing of key technology, while also securing a supply of critical minerals through investing in projects in Sub-Saharan Africa, such as the Lobito Corridor in Angola, under an updated Sub-Saharan Africa strategy.
The Lobito Corridor would connect key supply points for exporting critical minerals from the DRC and Zambia through an expanded road and railway system. This infrastructure would facilitate the export of these minerals to the United States or Europe for the manufacturing of critical technologies, a process referred to as “onshoring” or “friend shoring.”
However, this pursuit raises crucial questions about the broader implications of the United States’ involvement in the region. There is a risk that a myopic focus on de-risking through this approach might cause the U.S. to overlook the potential of how its novel development-focused strategy can revamp its other strategic and humanitarian approaches to the region.
The Challenges of Development
Traditionally, the United States has engaged with Sub-Saharan Africa through aid and stability-focused initiatives. Of the aid programs funded by the United States, one of the most successful is the President’s Emergency Plan for AIDS Relief (PEPFAR). PEPFAR is responsible for saving around 25 million lives through both bilateral investment and contributions to the Global Fund. The Global Fund addresses diseases such as tuberculosis, malaria, and AIDS through funding national strategies aimed at responding to these issues. Other Western-based charities have significantly contributed to resolving key humanitarian issues, such as vitamin A deficiency.
While these efforts have saved millions of lives and remain bastions of good policy, the U.S. approach to development in Africa has faced criticism. A major concern is the clash between the United States’ support for certain undemocratic and unpopular regimes, aimed at preserving stability, and the African values of self-determination in governance and funding. This can undermine African democratic values, leading to tensions and accusations of neo-colonialism.
Additionally, conditional development aid based on democratization requirements remains unpopular, despite support for these values. This presents a paradox: there is a strong value alignment with the United States, yet such conditional aid can alienate African nations if perceived as overly prescriptive. The risk of direct investment fueling corruption is another challenge, as seen in cases like Afghanistan where around 40% of the U.S. aid ended up in corrupt hands rather than supporting development projects.
In contrast to the United States, the PRC has adopted a state-led development model, exemplified by the Belt and Road Initiative (BRI). This program offers financing for infrastructure projects across Africa and East Asia, without imposing any requirements for democratic governance. However, the BRI faces its own challenges. Many of the recipient countries accepting loans are now struggling with heavy debt burdens, and there has been criticism regarding the initiative’s failure to meet environmental, social, and governance (ESG) standards. This comparison underscores the intricate dynamics and challenges inherent in international development efforts, with Sub-Saharan Africa being a focal point due to its rich natural resources, strategic geopolitical position, and diverse socio-political landscapes that present unique opportunities and obstacles for external development initiatives.
The Lobito Corridor and Current Approaches to Investment and De-Risking
As the United States and the PRC aim to amend past errors and achieve security objectives, their investment strategies in Sub-Saharan Africa are evolving.
Moving beyond its traditional focus on aid and stability the United States has adopted a new approach in the region, emphasizing four key pillars: transparency and development, democracy, Covid-19 recovery, and climate transition. This approach, highlighting the extraction of natural resources and critical minerals, integrates into a broader U.S. development strategy, run through the Partnership for Global Infrastructure (PGII). The PGII, a G7-led investment initiative that some have compared to the PRC’s BRI, signifies a shift toward more infrastructure investment in developing countries. As of 2021, the G7, with the United States at the forefront, has begun to outpace the PRC in infrastructure investment. It is through the PGII that the United States has invested in its flagship development project in Sub-Saharan Africa: the Lobito Corridor.
Announced at the Global Gateway Forum, held in Belgium in October 2023, this project involves collaboration between the United States, the European Union, the African Development Bank, and the Africa Finance Corporation. They signed a memorandum of understanding stating their intent to develop the Zambia-Lobito railway, a 260 km road network, along with investments in solar energy and telecommunications. Despite some investments in connectivity and solar energy, the Lobito Corridor fits squarely within de-risking and strategic competition narratives. U.S. International Development Finance Corporation CEO Scott Nathan stated that the purpose of the project was to “diversify supply chains” of critical minerals.
This development-focused strategy, if successful, promises mutual benefits: for the United States in securing access to critical minerals and for the host countries through increased mineral exports and tax revenue. Partnering with African lending institutions in these infrastructure investments can also help counter concerns of paternalism, fostering a more cooperative relationship and laying the groundwork for later investments in democracy. However, there remains a degree of uncertainty regarding the actual reinvestment of these mining-generated tax revenues into the broader development of these states, potentially undermining the impact on development.
Comparatively, the PRC is pivoting away from these large, expensive, and time-consuming projects to initiatives that the PRC has referred to as “small but beautiful/green.” These new projects prioritize quick completion, adhering to ESG standards, and some kind of revenue stream to avoid previous debt issues. Funded by both the PRC and private entities, these projects, such as new power stations and data centers in the DRC, can be completed quickly and provide immediate economic benefits. While still engaging in mineral extraction, the PRC’s smaller-scale, non-extractive infrastructure projects demonstrate a potential model for sustainable investment in Sub-Saharan Africa.
The Kitchen Sink Approach
The United States should view the change in the PRC’s approach as a wake-up call. The PRC previously embarked on large-scale infrastructure projects similar to what the United States and its allies are now pursuing. While feasible, this approach was fraught with economic challenges, repercussions of which are still being felt. In its development endeavors in Sub-Saharan Africa, especially under the PGII framework, the U.S. must broaden its scope. It should not only invest in necessary transportation infrastructure but also diversity into various types of infrastructure that address humanitarian needs and promote economic growth. This is not simply advantageous for the states receiving fundamental infrastructure but can also help achieve the United States’ Sub-Saharan Africa strategy and American security goals.
Focusing on small, fundamental infrastructure can help cultivate key partnerships in the region that the United States has failed to maintain since the end of the Cold War. This decline in influence was evident when a majority of African states either abstained or voted against the resolution at the United Nations condemning the Russian Federation’s invasion of Ukraine. By investing in projects that not only provide infrastructure and employment but also deliver tangible benefits to the average citizen, the U.S. can rebuild these relationships. Ensuring strict adherence to ESG standards is crucial, especially as the PRC still struggles in this regard. By targeting benefits directly at the populace, the U.S. can sway public opinion and influence the decisions of regional leaders, aligning infrastructure provision with the promotion of democratic values and responsible partnership.
Additionally, the United States should adopt a more expansive view of de-risking that goes beyond securing resources to include local and allied production of essential goods. While domestic manufacturing is vital, especially during national emergencies, it is often difficult and costly in the United States and other Western countries. By investing in infrastructure throughout the Sub-Saharan region, the United States could initiate the transfer of certain manufacturing processes, such as battery production, to the region. This shift not only elevates these states in the global value chain and boosts local incomes but also addresses humanitarian concerns such as child labor in mining, often a byproduct of poverty. By cultivating alternative supply chains, the United States would foster long-term poverty reduction and humanitarian benefits while also de-risking battery production from the PRC.
The current trajectory of U.S. strategy in Africa shows promise. Enabling vital investments in infrastructure will both contribute to local development and provide the G7 with long-term access to resources that can be used to de-risk key industries from the PRC. However, expanding investments into smaller projects like electricity and industrial capacity allows the U.S. to achieve a broader range of objectives beyond the current de-risking paradigm.
Ultimately, the choices made today will shape not just supply chains but also geopolitical alliances and the developmental trajectory of a region rich in potential. By adopting a comprehensive, “kitchen sink” approach to investment and de-risking—focusing on both large-scale transportation projects and smaller foundational and industrial infrastructure—the U.S. can effectively manage risks while fostering emerging green economies and forging valuable international partnerships.
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