China signed a $1.4 billion agreement with Zambia and Tanzania on Thursday to modernise the TAZARA railway, a key trade route connecting landlocked Zambia to the Indian Ocean.
The railway, originally financed by China in the 1970s to facilitate copper exports and fuel imports through Tanzania, remains strategically important and is seen as countering the U.S. and EU-backed Lobito Corridor, which runs from Angola through Zambia to the Democratic Republic of Congo.
The agreement was signed during a visit to Zambia by Chinese Premier Li Qiang, his first in 28 years, at a time when Africa’s second-largest copper producer is emerging from a financial crisis, Reuters reported.
“We want to work with Zambia to advance the cause of modernisation,” Li said during talks with Zambian President Hakainde Hichilema ahead of the signing.
A representative of China Railway Corporation explained that the works on the 1,860 km (1,155 mile) railway line will include rehabilitation of stations, tracks, tunnels, bridges, and construction of other infrastructure along the corridor.
The revamp is expected to increase freight volumes on the line to 2.4 million tonnes annually from the current 100,000 tonnes.
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Li’s visit is part of China’s broader push to deepen its presence in Zambia as Europe and the U.S. compete to serve as alternative benefactors, following Zambia’s restructuring of its $13.4 billion debt.
Hichilema expressed gratitude for China’s role in Zambia’s debt restructuring process. China, Zambia’s largest official creditor, is owed $5.7 billion, and Beijing aims to showcase countries that exemplify participation in President Xi Jinping’s Belt and Road infrastructure initiative.
Earlier this week, Zambia issued a licence to a joint venture with China’s Fujian Xiang Xin Corporation (FJXX) to build a $1.1 billion crude oil refinery and energy complex, highlighting China’s expanding economic footprint in the country.
According to the official Xinhua news agency, China, together with Tanzania and Zambia, will strengthen cooperation around the TAZARA railway and promote trade among African nations.
The three countries will support the implementation of China’s zero-tariff policy for African countries with diplomatic relations, “encourage the localisation of production and processing in Africa, and expand the exports of high-quality products to China.”
They will also promote the development of existing industrial parks and zones along the railway and in surrounding areas.
Over the past two decades, Chinese companies have invested approximately $6 billion in Zambia, largely in the metals sector, according to data from the American Enterprise Institute.
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Image Credit: Business Insider Africa
