Posted on April, 6, 2022 at 08:19 am
Last week, the Democratic Republic of Congo (DRC) was admitted to the East African Community (EAC) making it the seventh member of the trade bloc.
Ever since its independence in 1960, the DRC has been slow in aligning with evolving global economic and technical trends.
It has also missed many opportunities to stabilise and modernise its political and economic systems, mostly due to a series of disruptive internal political conflicts, including one which is still ongoing in the northeastern parts of the country.
By virtue of its enormous natural resources (minerals, energy, timber), DRC has always been the envy of many African countries and a theatre for mostly exploitive foreign interests, all of whom want to directly or indirectly share in these resources.
Indeed, DRC has what it takes to develop into the economic giant of Africa. The country is a member of South African Development Community (SADC) and borders with nine nations with enormous potential for intra-state trade. Of the six EAC members, only Kenya does not directly share a boundary with DRC.
Many see DRC as too huge a piece of land for effective centralized economic planning and governance. There is the eastern part which is essentially linked to the Mombasa/Dar corridors and its interests are essentially with the EAC.
There is the southern part centered in the mineral-rich Katanga and this is linked to the Durban/Beira/Lobito corridors making the region more inclined towards southern SADC neighbours.
The third fraction is the Atlantic zone centered on Kinshasa and this does trade with the neighbouring Atlantic coast states including Angola.
Transport infrastructure and connectivity throughout the entire DRC can be described as difficult, insufficient, and not always continuous to key economic centres.
These geographical and logistical facts limit EAC potential opportunities for cross-border and transit trade to the eastern parts of DRC, with Tanzania focusing on the lower parts and Kenya/Uganda on the northern sections of eastern DRC.
Various EAC countries will therefore see varying opportunities in DRC’s entry into the community. However, a shared cross-cutting plus for both EAC and DRC will be easier cross-border travel for citizens and goods.
In respect of Kenya, I see major opportunities in expanding financial and technical services to all economic hubs across DRC, the way Equity
and KCB
banks are already doing, an example which can be followed by the telcos like Safaricom.
Kenyan industrial investors can explore opportunities in DRC value addition manufacturing in various high-demand centres to reduce DRC dependence on imports of basic consumer and construction items.
The major competitor in respect of services and manufacturing will be South Africa which like DRC is a member of SADC.
Regarding food exports by EAC to DRC, Kenya will need to work overdrive to upscale its agriculture and livestock sectors to create surpluses for exports. EAC protocols will also make it easier to travel and access DRC job markets for Kenyans in various DRC economic sectors.
The current high global demands for critical minerals for tech industries will make DRC a key battleground where western and Chinese mining interests will be competing for resource control. Kenya can position itself to be the preferred transit corridor for exports of mineral ores.
For Uganda, when the oil resources on the DRC side of Lake Albert are developed, they will find an export outlet via the new crude oil pipeline through Tanzania.
On its part, the political leadership in DRC has to find a rallying common national agenda that unifies the political and economic interests of the DRC diverse regions and people.
Through closer association with various EAC government agencies and also business associations, it can be expected that DRC will hopefully pick a number of hints on how to professionalise its economic governance systems to improve resource accountability and sustainability, an aspect that cries for attention.
It is the informal and unofficial trade in resources that usually sustains corruption and insecurity in DRC.
Yes, EAC sees DRC as a strategic trading and transit partner, with huge capacity for investments by EAC enterprises. On its part, DRC will benefit from economic and political synergies offered by the community.
Source: Business Daily