Zimbabwe and Mozambique have taken a significant step towards boosting trade with the resumption of rail transport services on the Machipanda railway line. Caminhos de Ferro de Moçambique (CFM) has rehabilitated the railway line, which links Beira and Zimbabwe, reducing transport costs and easing congestion at Forbes Border Post. The rail service is expected to enhance trade between the two countries by improving the movement of goods and modernizing infrastructure. Zimbabwe, a landlocked country, relies on Mozambican ports, railways, and road infrastructure for imports and exports. This development is expected to contribute to the growth of economies in the Southern African Development Community (SADC) region [92b10878].
This new rail service is a significant boost for Zimbabwe's trade ambitions. The country has been actively working towards achieving an upper middle-income economy by 2030 and has been investing in infrastructure and trade facilitation. The resumption of rail services aligns with Zimbabwe's goal of enhancing operational efficiency and capacity, particularly in line with the African Continental Free Trade Area (AfCFTA) and China's Belt and Road Initiative (BRI) [84d84b35].
Zimbabwe's economic resilience is further demonstrated by its strategic use of platinum exports to repay a $400 million loan from the African Export-Import Bank (Afreximbank). The loan, signed in February, carries a 10.2% interest rate and matures in six years. Zimbabwe's reliance on platinum exports highlights its resourcefulness in managing its financial challenges, particularly in the face of difficulties in obtaining loans from international financiers due to its high debt and ineligibility for new lines of credit. The successful repayment showcases the government's determination to find innovative solutions to its financial constraints [731a5d06].
China's economic influence in debt and trade is also evident in Zimbabwe's economic landscape. China has been a key player in providing loans and financial support to various countries, including Zimbabwe. However, caution is advised against the potential weaponization of debt relief arrangements for geopolitical and geo-economic gains. The complexities surrounding debt and trade relationships highlight the need for careful management and consideration of long-term implications [32c3a98f].
As Zimbabwe continues its efforts to revive its stagnant economy, discussions with creditors on a debt clearance plan are ongoing. The country's introduction of new levies and taxes reflects its determination to overcome financial challenges and achieve economic growth. The combination of strategic resource management, trade facilitation, and infrastructure development positions Zimbabwe on a path towards economic recovery and resilience [731a5d06].
Meanwhile, China plans to spend US$1 billion to refurbish the Tazara railway connecting Zambia's copper belt region with the Tanzanian port of Dar es Salaam. The project will be carried out through a public-private partnership (PPP) over the coming years. The railway, originally built in the 1970s with Chinese funding, will compete with a US- and EU-backed rail link between resource-rich areas and the Lobito port in Angola. China aims to use the railway to transport mining exports from Zambia and the Democratic Republic of the Congo (DRC). The refurbished railway will directly compete with the US and EU rail project, which aims to secure minerals for making batteries and advanced electronics. China's involvement in the Tazara railway began in the 1970s when it built the railway to help Zambia transport copper to the Tanzanian coast. The project was China's biggest overseas project at the time and boosted its political capital during the Cold War [f630ca6a].