Country FilesCentralCountry Profile 2014: DEMOCRATIC REPUBLIC OF CONGO

Fri,24Nov2017

Posted on Friday, 07 February 2014 15:52

Country Profile 2014: DEMOCRATIC REPUBLIC OF CONGO

Will he stay or will he go?

One of the government’s principal challenges in the year ahead is the stabilisation of the political landscape. President Joseph Kabila failed in his late-2013 attempts to create a consensus about a proposed constitutional change that would allow him to run for another term. The defeat of the Mouvement du 23 Mars (M23) rebels in the east in late 2013 was a major victory for the Congolese government and the United Nations (UN) forces.

 

 

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TOP CONGOLESE COMPANIES

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ar-infographie-dem-rep-congo-2014Will he stay or will he go?

Kabilia says he will not run for re-election, but oppositionists are not convinced

Mining and agricultural growth are constrained by the lack of infrastructure

One of the government’s principal challenges in the year ahead is the stabilisation of the political landscape. President Joseph Kabila failed in his late-2013 attempts to create a consensus about a proposed constitutional change that would allow him to run for another term. The defeat of the Mouvement du 23 Mars (M23) rebels in the east in late 2013 was a major victory for the Congolese government and the United Nations (UN) forces.

The political parties that challenged the validity of the 2011 legislative and presidential elections–Etienne Tshisekedi’s Union pour la Démocratie et le Progrès Sociale and former national assembly speaker Vital Kamerhe’s Union pour la Nation Congolaise – boycotted the national political dialogue held between7 September and 5 October. The official goal of the talks was the strengthening of national cohesion, which was weakened by the attacks of the M23 rebels and the fact that M23 and the other armed groups were not invited to participate (see box).

The one small victory that Kabila gained was the support of senate president Léon Kengo wa Dondo, who obtained just 4% of the national vote in the 2011 presidential race. However, in looking to broaden his political support by announcing the formation of a government of national unity on 23 October, Kabila angered his supporters in Katanga Province who feared losing ministerial seats and who are opposed to proposals to split the province into four.

RESHUFFLE RUMOURS

With speculation rife about the succession or lack there of in 2016, Kabila was thought to be considering a personnel change. Prime minister Augustin Matata Ponyo, who claims to be the architect of the country’s progress on governance and economic growth, appears to have been spared. It is unclear who would be the opposition frontrunner in 2016 because Tshisekedi will then be 84 years old. Kabila also announced that he would gather the country’s senators and deputies together in December to announce “important measures” arising from the national debate. On 15 October, Kabila signed off on the law to create the Cour Constitutionnelle, a judicial body that will resolve disputes about election management.

The situation remained muddled in 2013. In order to calm the opposition, national assembly president Aubin Minaku announced on 10 October that the government will not change the constitution and that President Kabila will not run for re-election. The opposition said it still suspected the ruling party.

DECENTRALISATION

Nonetheless, important issues, like creating the system of decentralised government set out in the constitution, remained on the political agenda. The central government is supposed to give 40% of its revenue to the provinces.

Questions that remain unanswered are whether the government will seize the opportunity presented by the military victories in the east to accelerate reforms of the security sector and improve the discipline and living conditions of its soldiers. The government already owes them their salary arrears.

On the economic front, growth is set to continue despite the chronic insecurity in eastern Democratic Republic of Congo (DRC), not only in the Kivu provinces but also in northern Katanga Province and in several areas of Orientale Province. That growth is due to the performance of the mining sector and the dynamism of trade,construction and agriculture. But such growth is both vigorous and fragile. It is not inclusive and is a poor guarantor of political and social stability. The country was ranked last out of 186 countries in 2012 on the UN Development Programme’s Human Development Index.

There are frequent strikes in the education and transportation sectors. The country’s development is unbalanced. While southern Katanga is booming, other areas are stagnant. The government hopes that a boom will take place in Kasaï-Oriental Province thanks to an agreement signed in March 2003 with the Chinese firm Anhui Foreign Economic Construction Corporation, which is due to restart diamond production at the Sengamines concession. The agreement stipulates that Anhui is going to invest $100min infrastructure projects, like power plants and roads, in order to develop the region’s mining potential.

A lack of electricity in Katanga is holding back the mining sector there. Tenke Fungurume Mining, a joint venture between Freeport McMoRan and Lundin Mining, had to reduce its production of cobalt hydroxide in the second half of 2013 due to power shortages. In the short term,operators in Katanga will have to import electricity from Zambia. The government has promised that work will start on the Inga III hydroelectric dam before the end of 2015. According to optimistic estimates, the dam would begin producing electricity before 2020 and triple national electricity production.

Economic growth will also depend on continuing the government’s reform drive, says the Organisation for Economic Cooperation and Development. The government has implemented a series of measures to stabilise macroeconomic performance, including a restrictive budgetary policy and a gradual softening of monetary policy. In 2014, it is going to try to maintain the policies that prime minister Matata Ponyo established in 2012 to reduce inflation, stabilise the exchange rate and increase the level of foreign exchange reserves.

ar-infographie-dem-rep-congo-2014 2DEFICIT FALLING

The Banque Centrale du Congo drastically reduced its policy rate from 21% to 6% between late 2011 and 2012 in order to boost credit levels. The budget deficit has been dropping steadily. It was 6.2% of gross domestic product in 2011, 5.2% in 2012 and was set to be 3% in 2013.

The lack of infrastructure, the poor quality of governance,weak institutions and a risky business environment are all holding back the DRC’s development, according to the African Development Bank. The government says it is going to pursue more reform in the domains of electricity and hydrocarbons. It has already made progress on the issuing of licences, the transfer of property and procedures for declaring bankruptcy.

The government is in theory committed to transparency and is preparing new laws to regulate the oil sector, to strengthen the management of the forestry sector and to make the publishing of mining contracts and payments in the natural resource sector mandatory. Nonetheless, the Extractive Industries Transparency Initiative suspended the Congolese government for a year from 18 April 2013 due to the weakness of traceability of revenue from the mining industry.

Problems of transparency in the mining sector also contributed to the suspension of the International Monetary Fund’s support programme in December 2012. The government will attempt to negotiate with the two institutions in 2014. The government is also facing criticism because it has allowed SOCO International to explore for oil in Virunga National Park, a UNESCO World Heritage Site.

The Kinshasa government is expecting the countries that supply it with aid will be more severe in the years to come. The European Court of Auditors issued a report in October 2013 that said that progress has been slow, variable and limited. It argued that less than half of EU aid programmes were likely to achieve their goals. The European Union (EU) supplied the government with $2.5bn in aid between 2003 and 2011. The court also said that the EU should put more conditions on it said due to the Congolese government’s lack of political will.

MORE PEACE IN THE EAST?

THE CONGOLESE GOVERNMENT and the M23 rebels were close to signing a peace agreement in Kampala, Uganda, in November. The arrival in 2013 of the UN intervention brigade, composed of troops from South Africa, Tanzania and Malawi, demonstrated a new firmness on the part of the peacekeeping mission in the country, the Mission des Nations Unies pour la Stabilisation du Congo (MONUSCO). The force retook the Nord-Kivu Province capital of Goma and caused the M23 forces to withdraw. M23 military leader Sultani Makenga and some 1,500 rebels sought refugee status in Uganda in early November.

The government in Kampala promised to hand over the M23 rebels to the Congolese government after the signing of the peace deal. The Kinshasa government said there would be no blanket amnesty or integration of the M23 fighters into the

Congolese armed forces. On 5 November, M23 political leader Bertrand Bisimwa declared an immediate end to the M23 rebellion that started 20 months earlier. However, UN special envoy Mary Robinson said the deal included provisions for some M23 troops to be integrated into the army and for others to return to civilian life. The MONUSCO force planned to deal with other rebel forces in eastern DRC, including the Forces Démocratiques du Libération du Rwanda.

 TOP CONGOLESE COMPANIES

Rank 2012Rank 2011CompanySectorCountryTurnover (Thds $)Turnover changeNet profits
296359ENGEN RD CONGOPETROL. SERVICESDR CONGO429,78236.19%11,558
351457AIRTEL CONGO RDCTELECOMSDR CONGO335,97344.54%-65,060
495466GNRALE DES CARRIRES ET DES MINESMININGDR CONGO208,454-8.29%-173,905
 

 TOP CONGOLESE BANKS

 

Rank 2012Rank 2011Bank nameCountryTotal assetsNet interest incomeLoansDeposits
188-RAW BANKDEM REP CONGO533,73041,820156,740407,820
 


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