Investing in the Congo, a real opportunity? – Companies

Following the election of President Tshisekedi, the climate in the Democratic Republic of the Congo seems more favorable for business. And even if the war in Ukraine may eventually affect the economy, growth forecasts there remain good.

“Belgium and the Congo are a family history. There are times when things get worse, others get better. But no matter what happens, we remain a family. This mission is an opportunity to restore the fraternal relations that unite us. ” In March last year, Rudy Verworth, Prime Minister of the Brussels-Capital Region, began a five-day stay in Kinshasa, accompanied by representatives of about a hundred Belgian companies. It is highly anticipated, as this economic mission has been postponed several times, so it was all the more important that it was the first since the election of President Felix Cisekedi. The triregional economic mission, organized with Awex, Flanders Investment & Trade, hub.brussels, aimed to present and even deepen the Congo market.

“Belgium and the Congo are a family history. There are times when things get worse, others get better. But no matter what happens, we remain a family. This mission is an opportunity to restore the fraternal relations that unite us. ” In March last year, Rudy Verworth, Prime Minister of the Brussels-Capital Region, began a five-day stay in Kinshasa, accompanied by representatives of about a hundred Belgian companies. It is highly anticipated, as this economic mission has been postponed several times, so it was all the more important that it was the first since the election of President Felix Cisekedi. The triregional economic mission, organized with Awex, Flanders Investment & Trade, hub.brussels, aimed to present and even deepen the Congo market. Most were Brussels companies: about sixty. Because the region accounts for a modest 13% of Belgian exports in the country, compared to 83% for Flanders and only 4% for Wallonia, the DRC is its first African customer. Our country remains the leading European supplier, while lagging behind China, a leading trading partner with 17% of total imports and 1.122 billion euros. The Asian giant is also the first recipient of exports from the DRC (51%) due to its ubiquitous presence in mining. In total, in 2020, Belgian exports to the Congo still amounted to about 291.01 million euros. As you can see, not everything is so bad in Belgium. But given her knowledge of the industry, the network she has, and the connections that continue — even if they weaken over time — it might be tempting to say, “It could be done better.” Especially since our country benefits from tax and legal incentives that can especially promote trade between the two countries. We cite the Convention for the Prevention of Double Taxation, which, as the name implies, aims to avoid the accumulation of taxation. But also the Convention on the Promotion and Reciprocal Protection of Investments, the implementing regulations of which were finally ratified at the end of 2021. Now the issue of “business climate” remains delicate. It seems that the efforts of the government appointed by Felix Cisekedi, who has made proper management the focal point of his program, are to be commended. Shortly after coming to power, a special center of “business climate” was created, which was attached directly to the president. It will be recalled that in the World Bank’s Doing Business 2020 ranking, the DRC was among the worst students (183 out of 190), while, for example, neighboring Rwanda was proud of 38th place. However, an encouraging sign is that in July 2021, a three-year program – the first in 10 years – was signed with the International Monetary Fund, which provided the DRC with $ 1.5 billion. The agreement aims to help the country support recovery from the Covid-19 pandemic, maintain macroeconomic stability and restore the momentum for reform to boost growth. Despite the fact that the war in Ukraine may eventually affect the Congolese economy, growth forecasts remain quite good. The IMF’s forecasts have even been revised upwards: growth in 2022 was 6.2% instead of the 5.6% initially announced. But what investments to make in the DRC? According to Congolese Industry Minister Julien Paluku during the Belgian economic mission, the Congo had more than 10,000 industrial companies since independence. Today there are only 500 of them. Landscaping, which forces the country to import everything it can produce, be it the agri-food, pharmaceutical, textile or mechanical sectors. Not to mention the raw materials that are little or not yet exploited and which the country is full of. We quote oil: today 8 million barrels per year, with a potential of 20 billion and for which a tender has just been launched for 16 of the 32 oil units (13 on land, 3 on the shelf). Or, lesser known, nickel and chromium, present in the province of Kasai, are very little exploited. And not only does the DRC have some of the world’s largest stocks of components needed for electric batteries and smartphones – 70% cobalt and 40% coltan mined in the world – but its competitiveness seems real in terms of recycling. these minerals. According to a Bloomberg study, the construction of a treatment plant in the DRC would cost only $ 39 million, compared to $ 117 million if it was built in the United States, $ 112 million in China or even $ 65 million in Poland. The opportunity, which will also require the construction of infrastructure to serve the territory, is an investment estimated at $ 58 billion according to a master plan for industrialization initiated by the government. Thus, the opportunities and funding for which can be exhausted through PPPs (public-private partnerships), which the current Congolese Minister of Industry proposes to consider as “calls for applications” for foreign companies. Among the most famous PPPs: the Inga II Dam restoration project, which is responsible for about 60% of the country’s electricity production. Also insufficiently used: agricultural potential. Of the 75 million hectares that can be exploited in the country, only 10 million are actually exploited today. At full capacity, the earth could feed more than 2 billion people, far exceeding the continent’s needs. During the Belgian economic mission, Kimona Bononge, president of the Federation of Congolese Companies, eagerly recalled how the Congo was once one of the world’s largest exporters of coffee, cocoa, rubber and palm oil. “We are only talking about our mines, but the real wealth of the country is agriculture,” said Modest Batu, president of the Senate. He is also working on a law aimed at making the industry more attractive. Exports, which will contribute in the future since the construction of the country’s first deep-water port, in Banana, finally began in January after many ups and downs. In the end, the project, won by DP World of the United Arab Emirates, promises an annual capacity of 300,000 containers or a turnover of more than 1.3 million tons. “Don’t wait until the Congo becomes Switzerland to invest in it,” Nicolas Kazadi, the finance minister, insisted during the visit, proudly announcing that a bill had been submitted to facilitate lending and banking financing. One of Congo’s main problems remains the inability to secure long-term financing through a bank rate of around 10%. There are many in Kinshasa today who insist on the transition that is taking place, while remaining aware of the efforts that still need to be made. Rome was not built in one day, others say, adding that investing in the Congo “remains an adventure”, where, oddly enough, the results are equal to the risks involved, even exponential for those who “dare”. True, its real impact is not yet known, but the day after the economic mission in March, Brussels Prime Minister Rudy Verworth was delighted with its success, citing several agreements in telemedicine, textiles, construction and the environment. . And it is expected that there will be more such initiatives in the future. Because, as Isabelle Gripp, CEO of hub.brussels, put it so well: “International trade is a long-term love story.”

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