"Within one month our revenues had jumped over 50%."

Doing Business in Congo

on the road

It is the second largest country in Africa by area and the eleventh largest in the world. When it comes to geographic size and population, does it affect trade in the Congo? With a population of over 71 million, according to the CIA, the Democratic Republic of the Congo is the nineteenth most populous nation in the world, the fourth most populous nation in Africa, as well as the most populous officially Francophone country. The Second Congo War, beginning in 1998, devastated the country and is sometimes referred to as the “African world war” because it involved nine African nations and some twenty armed groups. Despite the signing of peace accords in 2003, fighting continues in the east of the country. The level of violence, however has gradually decreased since the peace accords.

The global growth in demand for scarce raw materials and the industrial surges in China, India, Russia, Brazil and other developing countries require that developed countries employ new, integrated and responsive strategies for identifying and ensuring, on a continual basis, an adequate supply of strategic and critical materials required for their security needs. Although citizens of the DRC are among the poorest in the world, having the second lowest nominal GDP per capita, measured at $186 by the IMF. The Democratic Republic of Congo is widely considered to be the richest country in the world regarding natural resources; its untapped deposits of raw minerals are estimated to be worth in excess of US$ 24 trillion, according to various sources such as The Free Library and OTC Investor. A number of International Monetary Fund and World Bank missions have met with the government to help it develop a coherent economic plan, and President Joseph Kabila has begun implementing reforms. Much economic activity lies outside the GDP data. A United Nations Human Development Index report shows human development to be one of the worst in decades.

The economy of the second largest country in Africa relies heavily on mining. However, the smaller-scale economic activity occurs in the informal sector and is not reflected in GDP data, according to Research and Markets. In 2006 Transparency International ranked the Democratic Republic of the Congo 156 out of 163 countries in the Corruption Perception Index, tying Bangladesh, Chad, and Sudan with a 2.0 rating. The Congo’s main industries are mining (diamonds, gold, copper, cobalt,coltan, zinc), mineral processing,consumer products (including textiles,footwear, cigarettes, processed foods and beverages), cement, and commercial ship repair. The GDP can be broken down into various sectors with the following proportions agriculture (55%), industry (11%),services (34%). The Congo’s main export goods are diamonds, gold, copper, cobalt, wood products, crude oil, and coffee. While its main export partners are China 47.3%, Belgium 15.4%, Finland 9.6%, United States 8.1%, Zambia 4.4%. The Congolese government is trying to take better advantage of its resources byThe DRC is embarking on the establishment of special economic zones to encourage the revival of its industry. The first SEZ should come into being in 2012 in N’Sele, a commune of Kinshasa, and will focus on agro-industries. The Congolese authorities are already planning to open another dedicated to mining (Katanga) and a third dedicated to the cement (in the Bas-Congo).

Overall, the Congo is still a very difficult market to invest in. With the World Bank ranking it 178th out of 183 for Ease of Doing Business for 2012. However, there are a large number of opportunities for companies wishing to do business. The population is quite large and there is a lot of mineral wealth that various companies could extract. The economy is quite small at $21.64 billion as measured by the IMF in 2009. But it seems that the overall situation is improving in the Congo.

 

Tags: , ,

Author:Globial International Business Team

The Globial International Business Team researches, analyzes, and reports on all things related to global trade and business.

Subscribe

Get our news and articles

No comments yet.

Leave a Reply

CommentLuv badge