Lobito Corridor…. three SADC countries sign pact to facilitate trade

SANF 23 no 2 –  By Clarkson Mambo

The year 2023 has begun with a major boost for trade in the SADC region as three countries have signed a pact to facilitate easier movement of goods and people.

Three Member States of the Southern African Development Community (SADC) signed the Lobito Corridor Transit Transport Facilitation Agency (LCTTFA) Agreement on 27 January following negotiations that began 2013.

The signatories, Angola, Democratic Republic of Congo (DRC) and Zambia have agreed to fund the establishment of a secretariat and all institutional organs.

The Agency will promote infrastructure development along the corridor and ensure that such developments support the present and future needs of users, as well as encouraging the reduction of costs for movement of cargo and passengers.

Other aspirations include railway lines linking the three countries as well as the establishment of One Stop Border Posts.

Lobito is a port city in western Angola, lying on the Atlantic coast and known for its long and unique natural harbour and active port, with important railway terminals and connections to the continental road network.

The Lobito Corridor covers four provinces in Angola (Huambo, Benguela, Bié and Moxico); four provinces in the DRC (Katanga, Tanganyika, Lomami and Lualaba); as well as two provinces in Zambia (Copperbelt and North-Western).

This corridor reaches 40 percent of Angola’s population, providing an alternative route for export markets for Zambia and the DRC, which are major mineral producers, linking them to the sea.

Between them, the DRC and Zambia hold major reserves of key minerals such as cobalt and copper which will find a shorter route to world markets through the Lobito Corridor.

Angola is well known for its oil production, but has made it a priority to diversify its development agenda, leading to growth in sectors such as mining as the country has sizeable reserves of gold, diamond, iron ore and rare earth minerals.

SADC recognizes the importance of transport corridors as a means to facilitate trade and attract investment, as the corridors facilitate efficient movement of people, goods and services, labour, and capital within countries and across borders in the region.

The SADC Secretariat, which supported and coordinated the signing, said the LCTTFA Agreement will “accelerate growth in domestic and cross-border trade along the corridor through the implementation of harmonised trade facilitation instruments, strengthening coordination of joint corridor development activities, and fostering effective participation of small to medium enterprises in value chains.”

The instruments will have to be aligned with the existing SADC Treaty, Protocols and development frameworks such as the Regional Indicative Strategic Development Plan 2020-2030, Regional Infrastructure Development Masterplan 2020-2027, and SADC Industrialisation Strategy and Roadmap 2020-2063.

The SADC region has at least 18 transport corridors, and has developed a “Corridor Cluster” where countries served by a particular route, sharing ports and other transport and logistics, are put in the same group in order to strengthen coordination, monitoring and reporting of regional trade, as well as transport facilitation and implementation of infrastructure projects.

The Angolan government has estimated that it will earn around US$2 billion over 30 years when the Lobito Corridor is fully operational. The country expects that a project to establish a railway service running for nearly 1,300km from Luau on the eastern border with the DRC to Lobito Port will create over 1,600 jobs.

The Minister of Transport for the Republic of Angola, Ricardo Daniel Sandão Queirós Viegas de Abreu said operationalising the agreement would curtail unnecessary delays in the movement of people and goods across the countries.

Frank Museba Tayali, the Minister for Transport and Logistics in Zambia, sees the LCTTFA Agreement as unlocking vast business potential along the corridor through the participation of the private sector to create jobs and foster economic growth.

He said signing the deal was not enough, but it will be imperative to see everything agreed upon being implemented.

The Zambian government has also requested for land to use as a dry port at the Port of Lobito, describing the corridor as “Zambia’s alternative and strategic outlet to the Western and European export markets.”

On signing the agreement, His Excellency Kalala Mayiba Constantin, Ambassador Extraordinary and Plenipotentiary of the DRC to Angola, said mining companies and other investors in his country eagerly await the operationalisation of the agreement to accelerate the rehabilitation of the 427km railway line linking towns in the DRC and Angola.

The African Development Bank is supporting the Lobito Corridor development project due to its significance in the regional and African integration agenda.

The AfDB provided a three-year US$8.1 million grant towards capacity building for trade facilitation and corridor coordination, technical assistance for value chains development and economic cluster development, and project management.

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