- Last week, the Democratic Republic of the Congo (DRC) was admitted to the East African Community (EAC), making it the seventh member of the trading bloc.
- Due to its vast natural resources (minerals, energy, timber), the DRC has always been the envy of many African countries and a theater of mostly exploitative foreign interests.
Last week, the Democratic Republic of the Congo (DRC) was admitted to the East African Community (EAC), making it the seventh member of the trading bloc.
Since gaining independence in 1960, the Democratic Republic of the Congo has been slow to adapt to evolving global economic and technological trends.
It has also missed many opportunities to stabilize and modernize its political and economic systems, largely due to a series of disruptive internal political conflicts, including one that still lingers in the north-eastern parts of the country.
Due to its enormous natural resources (minerals, energy, wood), the Democratic Republic of the Congo has always been the envy of many African countries and the scene of mostly exploitative foreign interests, all of which want to participate directly or indirectly in these resources.
In fact, the Democratic Republic of the Congo has what it takes to become Africa’s economic giant. The country is a member of the South African Development Community (SADC) and borders nine nations with enormous potential for intrastate trade. Of the six EAC members, only Kenya does not directly border the Democratic Republic of the Congo.
Many consider the DRC to be too large a piece of land for effective centralized economic planning and governance. There is the eastern part, which is essentially connected to the Mombasa/Dar corridors and whose interests lie essentially with the EAC.
The southern portion is centered on mineral-rich Katanga and is connected to the Durban/Beiira/Lobito corridors, tilting the region more towards the southern SADC neighbors.
The third faction is the Atlantic Zone, centered in Kinshasa, which trades with neighboring Atlantic seaboard states including Angola.
The transport infrastructure and connections throughout the Democratic Republic of the Congo can be described as difficult, inadequate and not always continuous to important economic centers.
These geographic and logistical constraints limit the EAC’s potential cross-border and transit trade opportunities to the eastern parts of the DRC, with Tanzania concentrating on the lower parts and Kenya/Uganda on the northern parts of the eastern DRC.
Different EAC countries will therefore see different opportunities in the entry of the DRC into the community. However, a common overarching plus for EAC and DRC will be easier cross-border travel for citizens and goods.
Regarding Kenya, I see great opportunities in expanding financial and technical services to all economic hubs across the DRC, as the banks Equity #ticker:EQTY and KCB #ticker:KCB are already doing, an example that telecom companies are keen to follow can follow Safaricom.
Kenyan industrial investors can explore DRC value-added manufacturing opportunities in various high-demand hubs to reduce the DRC’s dependence on imports of basic consumer and construction goods.
The main competitor in terms of services and manufacturing will be South Africa, which, like the DRC, is a member of SADC.
Regarding food exports from EAC to the DRC, Kenya needs to work flat out to improve its agriculture and livestock sector and create surpluses for export. The EAC protocols will also facilitate travel and access to DRC labor markets for Kenyans in various DRC economic sectors.
The current high global demand for critical minerals for the technology industry will make the DRC a key battleground where Western and Chinese mining interests will compete for resource control. Kenya can position itself as a preferred transit corridor for the export of mineral ores.
When oil resources are developed on the DRC side of Lake Albert, Uganda will find export outlets via the new crude oil pipeline through Tanzania.
For its part, the political leadership in the DRC must find a common national agenda that unites the political and economic interests of the different regions and people of the DRC.
By working more closely with various EAC government agencies and also business associations, it is expected that DRC will hopefully take up a number of pointers to professionalize its economic governance systems to improve resource stewardship and sustainability, an issue that calls for attention.
It is the informal and unofficial trade in resources that usually perpetuates corruption and insecurity in the DRC.
Yes, EAC sees DRC as a strategic trade and transit partner with tremendous investment capacity for EAC companies. In turn, DRC will benefit from economic and political synergies offered by the community.