A plethora of multibillion-dollar investment opportunities

No country with more abundant natural resources than the Democratic Republic of Congo (DRC).

Despite its riches, it has been marred by over two decades of armed conflict, yet is the global source of all minerals used in electronics and batteries.

Not only does the DRC hold abundant deposits of gold, tungsten, tin and tantalum, it is unfortunately attached to the “conflict minerals” stain, as these rich minerals have been a driver to the current conflict plaguing the nation.

  • African banks have a huge chance to expand and develop a rather profitable stream by investing in the DRC
  • DRC mining sector was a key driver of growth, with copper and cobalt production rising by 12 per cent and 7.6 per cent

Being the newest member of the East African Community (EAC), the DRC is about the size of Western Europe and the largest country in Sub-Saharan Africa (SSA). Being endowed with valuable resources such as cobalt and copper, it also boasts immense potential in hydropower, arable land and forestry.

Since 2003, which marked the end of the internal conflict ripping the country apart, Congo’s wars caused the largest displacement of people, creating a situation of endemic poverty, as the nation has scurried to rebuild and escape the economic doom created by neighboring rebel groups.

According to the World Bank, the DRC is among the five poorest nations in the world. In 2018, around 78 per cent of Congolese, which is about 60 million people, lived on less than US$1.90 a day.

“About one out of six people living in extreme poverty in SSA lives in DRC”, the World Bank notes. Much has been written about the history of the DRC and its associated mistakes. Hence, it is rather tricky and unfair to escape the grim reality, but also worthy of discussing the nature of escaping the economic gloom brought on by war. What is most interesting is how international investors are now eyeing the DRC and why the global business community is ideally poised to do business with Africa’s richest nation.

READ: DR Congo’s place in Africa’s manufacturing, economic potential

DRC economic situation

The DRC has been experiencing an interesting economic rebound. World Bank indicators show a revitalization of the economy, from the post-pandemic-induced slowdown of 1.7% in 2020 to 5.7% in 2021.

“The mining sector was a key driver of growth with copper and cobalt production rising by 12 per cent and 7.6 per cent, respectively. Non-mining sectors (particularly agriculture and services) recovered, growing by 3.9 per cent in 2021 despite economic restrictions due to Covid-19,” the World Bank.

Further, another important issue to note on the DRC’s economy is the higher 2022 commodity prices, which lifted domestic revenues. Coupled with increased grants, this allowed fiscal consolidation to be achieved despite higher expenditures.

“Fiscal accounts were balanced in 2021 compared to a budget deficit of 1.2 per cent in 2020” the World Bank noted.

According to UNCTAD’s 2021 World Investment Report, FDI flows into the Democratic Republic of Congo increased from USD 1.5 billion in 2019 to USD 1.6 billion in 2020, despite the global economic crisis triggered by the Covid-19 pandemic.

With the global expansion of industrial development worldwide, the World Bank indicated that DRC’s mining sector is expected to increase output, seeing a significant positive return in 2024. However, with potential geopolitical conflict still reigning in the region and vulnerability to global commodity prices, things may change.

READ: Powering Africa: Congo’s Inga Dam holds the continent’s electricity answer

Investing in the DRC

It is important to outline how the DRC stands to become a crucial investment hub in Africa. Foreign and domestic private entities reserve the right to establish business ventures across the nation and engage in all forms of remunerative operations, this is according to the US State Department as it outlines its engagement strategy with the country.

The DRC’s investment agency—the National Agency for Investment Promotion (ANAPI) provides essential facilitation services for initial investments over US$200,000 and is responsible for simplifying the investment process, make procedures more transparent, assist new foreign investors and improve the business image of the DRC —as the investment destination.

The DRC has potential sectors that are essential for investment and boosting the nation’s economic landscape for the betterment of the region. The sectors do not only create enough revenue to expand the welfare of the population, but create sustainable systems that create millions of job opportunities.

Agriculture, banking, energy, housing, tourism, insurance, housing and real estate, forestry, transport and infrastructure. With an array of investment opportunities, it is important to notice how vast profits go when it comes to mutual benefits in all sectors.

Banking

African banks have a huge chance to expand and develop a rather profitable stream by investing in the DRC, which would definitely use strategic and seamless banking services.

Mobile banking is a very interesting sphere in which nations such as Nigeria, South Africa and Kenya are exploring exhaustively, hence financial institutions stand a chance to pump life into DRC’s digital banking infrastructures and be the first to reap the rewards and create sustainable operating models.

However, the DRC has to prolong its internal efforts to build a healthy economic system. The DRC’s banking system is comprised of the BCC (Bank of Credit and Commerce) and 18 commercial banks as well as savings/credit cooperatives, microfinance institutions, financial transfer services and one development bank.

This signals an area of ​​improvement, hence some of African financial institutions have established subsidiaries in the DRC including the Attijariwafa Bank of Morocco via the Credit du Congo (CDC).

One of Tanzania’s leading banks, CRDB is now also expanding into the DRC by setting up operations in Lumumbashi, and hoping to take a chunk of the business between Tanzanian and Congolese cross border trade, especially in mining.

Agriculture

The farming front is undoubtedly one of the most profitable the DRC has to offer. Agriculture-based companies and stakeholders across the continent ought to weigh in DRC’s agriculture landscape with a “high-impact” initiative that leverages on the government’s efforts to improve food security, increase exports and thus earn greater revenue.

African agriculture companies have the potential to develop the DRC’s agriculture output but also improve the region’s food security system as the country holds immense underexploited arable land.

Its potential is so mammoth that the nation holds enough arable land to feed neighboring countries facing food insecurity, such as Sudan, Somalia, Ethiopia and Kenya. By pressing enough strategies and attention on high-value crops that cater for both – nutritional and market demands, agro-investors have the potential to take significant advantage of a burgeoning sector.

More importantly, developing muscle for smallholder farmers is essential to strike a rather inclusive, gendered and sustainable scenario that will allow low-income families to reap the rewards from agricultural yields, thus enabling a nation to escape the economic doom it is currently facing.

Whether it is cash crops such as coffee, palm oil, rubber, cotton, sugar, tea and cocoa or the widely demanded food crop such as cassava, maize, groundnuts and rice, the DRC is home to a potential food security machine that will benefit the entire EAC and beyond.

Suppose only the world were to see the DRC as a hotbed for investment. Would they enter the country, and its upon agencies such as ANAPI to take the lead to ensure that local investors see the potential and the larger global community. With the integration of the DRC into the EAC, if more East African investors see their new neighbor as a partner, the entire region stands to prosper.

READ: DRC President Tshisekedi Tanzania visit increases investments

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