Congo-Kinshasa: Peace and Politics – Can Congo Achieve Economic Stability?

The underlying structural drivers of conflict in the Democratic Republic of Congo have evolved. Motivations not only based on long-standing grievances rooted in political and economic exclusion but also the exploitation and trafficking of natural resources have played a significant role in sustaining conflict.

Patterns of political and economic exclusion and the institutionalization of ethnicity are at the root of many conflicts across the DRC–from tensions between communities in the Masisi and Lubero territories of North Kivu, Banyamulenge and Bafuliru, Babembe, and Banyindu communities in South Kivu, Twa and Bantu communities in Tanganyika, and Kuba and Luba communities in Kasa├» and Kasa├» according to Relief Web.

  • Despite the conflicts and political instability that haunts the Democratic Republic of Congo, this is a big pull factor for investments.
  • The mining sector is central to the DRC’s economy, accounting for over 17 per cent of GDP and 90 per cent of exports. In 2020, the Democratic Republic of the Congo was the world’s biggest exporter of cobalt oxides and hydroxides, cobalt, other ores, cobalt ore, and copper alloys.

Importantly, the cost of violence to the economy of DRC is among the highest in the world. Overall, the country ranked 158th out of 163 countries in the most recent Global Peace Index, an index measuring countries’ peacefulness based on 23 quantitative and qualitative indicators.

Produced by the Institute for Economics and Peace (IEP), the Global Peace Index (GPI) is the world’s leading measure of global peacefulness. This report presents the most comprehensive data-driven analysis to date on trends in peace, its economic value, and how to develop peaceful societies. The GPI covers 99.7 per cent of the world’s population, using 23 qualitative and quantitative indicators from highly respected sources, and measures the state of peace across three domains: the level of Societal Safety and Security, the extent of Ongoing Domestic and International Conflict, and the degree of militarisation.

DRC’s standing in the index is cause for concern. This indicates a much higher level of political risk in the country.However, the resource portfolio of the Democratic Republic of Congo is impressive and unmatched in the East African region. Despite the conflicts and political instability that haunts the country, this is a big pull factor for investments. The richness in resources made the country gain membership in the East African Community (EAC).

That was music to the ears of many citizens and corporations of the EAC, who have been salivating at the opportunities Kinshasa brings to the table. Its membership will provide a stimulus for economic development and act as a catalyst for regional trade.

DRC presents the potential to open the Indian Ocean to the Atlantic Trade Corridor and link the region to Central Africa, North Africa, and other continental sub-regions.

In return, the DRC will benefit from the EAC Common Market and Customs frameworks, with easier and seamless access to the markets and seaports of Kenya and Tanzania at cheaper rates.

However, Roselyne Omondi, associate director of research at the HORN Institute, in a blog said, becoming EAC’s newest member “will not suddenly melt away the socioeconomic and geopolitical problems that plague DRC.”

“DRC’s inability to improve its development outcomes sufficiently despite rising commodity prices and her expanded production capacity could point to poor economic management, geopolitical interference, and protracted political crises. To be clear, DRC’s entry into the EAC will not introduce anything that its six current members are not already accustomed to.

“With or without DRC, armed militant groups, terrorism, illegal migration, political turbulence, underdeveloped economies, youth unemployment, poverty, and poor infrastructure are realities that EAC has contended with. However, it will recalibrate the bloc’s peace and security considerations,” she wrote.

The mining sector is central to the DRC’s economy, accounting for over 17 per cent of GDP and 90 per cent of exports. The development of legal and regulatory frameworks for natural resource management and the progressive formalization of the mining sector will be instrumental in ensuring natural resources are a driver of shared prosperity and inclusive growth. While the government undertook revisions of mining codes and regulations in 2018 and an audit of mining licenses under President Tshisekedi.

In 2020, the Democratic Republic of the Congo was the world’s biggest exporter of cobalt oxides and hydroxides, cobalt, other ores, cobalt ore, and copper alloys.

In an article by The East African dated April 4, 2022, DRC’s entry means integrating the EAC’s trade infrastructure, intermodal connectivity, one-stop border posts, and systems to reduce trade time and costs.The private sector says Congo’s admission is a milestone in the transformation of the bloc into the most attractive trade and investment destination in Africa.

According to the East African Business Council, EAC’s exports to the DRC have averaged 13.5 per cent in the last seven years to 2020. In 2018, the value of imported goods into the DRC stood at US$7.4 billion against exports of US$855.4 million.

“Following this milestone, trade is set to increase immensely, as DRC shares its borders with five EAC partner states. We call for the improvement of regional infrastructure connectivity plus the implementation of EAC commitments to unlock trade opportunities,” said the council’s CEO John Bosco Kalisa.

The Congolese expect a lot from the region. “The benefits expected from the EAC membership are the multiple administrative facilities, the reduction of charges and the increase in commercial and economic activities of citizens as well as the facilitation of their mobility between our countries; the reduction of Customs tariffs for goods received in the ports of Mombasa and Dar es Salaam,” said President Tshisekedi.

In 2020 Democratic Republic of the Congo was placed as the 87th economy in the world in terms of GDP (current US$), number 70 in total exports, number 105 in total imports, number 187 economy in terms of GDP per capita and the number 123 most complex economy according to the Economic Complexity Index (ECI).

According to figures from the Observatory of Economic Complexity (OEC), a global data visualization tool for international trade, as of 2020, the top exports of the Democratic Republic of the Congo are refined copper, cobalt oxides and hydroxides, cobalt, raw copper, and copper ore, exporting mostly to China, Tanzania, United Arab Emirates, South Africa, and Singapore.

The top imports of the Democratic Republic of the Congo are documents of title (bonds etc.) and unused stamps, packaged medicaments, sulphur, refined petroleum, and poultry meat, imported mostly from China, the United States, Zambia, South Africa, and India.

Source:

Leave a Reply

Your email address will not be published. Required fields are marked *