USC RDC Investment Guide

Published

February 22, 2017

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The Democratic Republic of the Congo (DRC), also known as Congo-Kinshasa, is the second largest and fourth most populous country in Africa. Its central position on the continent makes it a repository for all of the peoples, cultures and religions that have gathered here over time, and has given it the role of a transit hub for flows of humans and goods, a role which supplements its tradition as an exporting country, established thanks to its multitude of natural resources.

The Democratic Republic of the Congo, formerly Zaire (1971–1997), the Democratic Republic of the Congo (1960–1971) and the Belgian Congo (1908–1960) is a vast territory in which several hundred ethnic groups live alongside each other, speaking as many different languages and practicing various religions, primarily Catholicism and Protestantism, but also Islam, Animism, and a range of syncretic religions that derive from multiple beliefs. Its population is young, with nearly half of all inhabitants under 15, providing a tremendous pool of labor, and the country’s innate strengths herald substantial economic development once tensions in the region abate.

Abundant natural resources

On maps of the globe, the DRC sits proudly at the heart of the continent, while still enjoying an outlet to the Atlantic Ocean, preventing it from being landlocked, and covers an area of more than 2.3 million square kilometers. It is bordered by nine states: the Republic of the Congo, the Central African Republic, South Sudan, Uganda, Rwanda, Burundi, Tanzania, Zambia and Angola.

One unique feature of the country is that it is 98% covered by the Congo River basin, whose rainforest is the second largest on the planet, after the Amazon. It is bounded to the east by the Great East African Rift, the African Great Lakes and high volcanic mountains, and to the south by the savanna. This unusual arrangement results in varied and spectacular landscapes, and the luxuriant forest on either side of the equator, crisscrossed by the Congo River and its tributaries, produces a great wealth of plant and wildlife.

This dense river system is a huge asset for the DRC. The Congo River has the second most stable and most powerful flow in the world (40,000 m3 /second), after the Amazon. The country’s exploitable hydroelectric power resources are estimated at 100,000 MW, more than 44% of which are concentrated at Inga alone, where two dams are currently operational. The catchment basin, covering 3.68 million square kilometers, is one of the largest freshwater reserves in the world. This potential is currently underutilized and there are numerous improvements which could be made. The river also plays a very important economic role in supplying fishery products. Of course, this is far from the only output of the primary sector in the DRC.

Although cultivated land covers only 3% of the country’s territory, agriculture employs 70% of the active population, and there are 80 million hectares of arable land in the DRC. Coffee and rubber are the key commodities produced, alongside wood, given that the vast tropical forest is full of highly prized tree species. But it is the DRC’s subsoil reserves that are particularly sought after, and which have produced the country’s nickname of “geological scandal.”

More than 1,100 minerals and precious metals have been identified, including copper, cobalt, diamonds, gold (10% of the world’s known reserves), iron, uranium, oil and more. The potential is astonishing, and mining products have long been extracted and exported. In 2015, the extractive industries accounted for 97.5% of national export revenue, according to the African Development Bank (AfDB). And global demand for mineral ores, led by China, has literally exploded. The future thus looks promising for these resources.

Strong political will

The DRC has not been immune to crises of all kinds, which engulfed it at the end of the twentieth century. In addition to public health emergencies (notably the endemic presence of the Ebola virus), the country has experienced political unrest, mismanagement, interAfrican wars on its soil (1996– 1997, 1998–2003) and a lack of security caused by the presence of armed militias. Recently, however, in 2018, the country emerged from the economic recession that resulted from the fall in global prices for its main export products.

The DRC’s central geostrategic location means that it is home to central Africa’s biggest potential market, numbering some 275 million consumers if the populations of neighboring countries are included. To take advantage of this location, there is a need for better management of the territory so that development can be built on stable, lasting foundations. It is for this reason that the President of the Republic, Félix Tshisekedi, has launched five priority projects, focusing on infrastructure, job creation and access to housing, water, electricity, education and health care.

The political will to boost growth can also be seen in the State’s involvement in international bodies. The DRC belongs to several subregional economic zones: the Southern African Development Community (SADC), the Common Market for Eastern and Southern Africa (Comesa) and the Economic Community of Central African States (ECCAS). Partners include the African Union (AU), European Union (EU), United Nations (UN) and the International Organisation of La Francophonie (IOF).

The country is also exploring other areas of economic development. It is hoping to embark on industrialization to further enhance the value of its raw materials, to step up its commercial relationships and partnerships with China, to redefine its cooperative relationship with the EU in order to take advantage of budget support aid... If it is successful in bringing back peace and stability, the DRC could be facing one of the brightest futures of any country in Africa, becoming a key player on the continent and even beyond.

USC RDC Investment Guide