US gives Zambia $458m to complement Lobito project

The United States has approved $458 million to assist Zambian farmers to access regional and global markets.

The funds, given under the United States Millennium Challenge Corporation (MCC), complement the US government’s investments in Lobito, a major logistical corridor spanning Angola, Zambia and Tanzania and linking the Atlantic and Indian Oceans.

Washington has pledged $4 million for the Lobito project, in an apparent scramble for the region’s critical minerals with China, which has promised $1 billion for the rehabilitation of the Tazara, a transborder railway corridor running from Dar es Salaam to Kapiri Mposhi in central Zambia.

Zambia has effectively joined the growing list of African countries that are recipients of US grants under the MCC.

In East Africa, Kenya and Tanzania are beneficiaries. Kenya signed the MCC in 2023 while Tanzania had the US reinstate it in December 2022 after it was suspended during the John Magufuli presidency.

Antony J. Blinken, US Secretary of State, said in a statement on October 19, said   the landmark Zambian $491 million project was expected to deliver “sustainable and inclusive economic growth for the Zambian people.”

“This MCC compact, based on a $458 million debt-free grant from the US and a $33 million investment by the Zambia, will develop infrastructure to assist Zambia’s farmers and rural communities in accessing regional and global markets, support policy reforms to catalyse agricultural sector growth, and complement the US government’s investments in the Lobito Corridor,” Blinken said.

The deal was signed in Lusaka by MCC CEO  Alice Albright and Zambia’s Minister of Finance Situmbeko Musokotwane and witnessed by President Hakainde Hichilema.

“MCC recognises Zambia’s potential to not only become food secure, but also a leading supplier of agricultural goods to the region and the world,” Ms Albright said. “This compact makes it easier for Zambia’s farmers and agriculture processors to sell their products and grow their businesses, an output critical to Zambia’s economic growth.”

The Millennium Challenge Corporation provides time-limited grants that pair investments in infrastructure with policy and institutional reforms to countries that meet rigorous standards for good governance

“The signing of the second Millennium Challenge Compact today signifies yet another landmark in our bilateral cooperation and friendly relations with the people and government of the United States of America,” President Hichilema said. 

The Zambia Farm-to-Market Compact features a combination of investments in rural road infrastructure and maintenance, and access to finance for irrigation, electricity, storage facilities,

It will do so through logistics and processing equipment and infrastructure for agriculture, and agricultural policy reform initiatives, hence its importance and linkage to the Lobito Corridor.