There is a new opening for the DR Congo as East African states rush to forge business and political ties with President Félix Antoine Tshisekedi Tshilombo, who has taken full control of a new government after a four-month power struggle with predecessor Joseph Kabila.
Tshisekedi in February named the head of state-owned mining giant Gecamines, Jean-Michel Sama Lukonde Kyenge, as prime minister.
Sama Lukonde succeeded Sylvestre Ilunga Ilunkamba, who was forced out after a coalition between supporters of Tshisekedi and Kabila broke down.
Tensions boiled over last year when Tshisekedi declared that power-sharing with the Kabila faction was blocking his agenda for reform, vowing to seek a new majority in parliament.
In a series of moves, he won over many Kabila legislators, gaining the perceived support of almost 400 out of 500 members of the National Assembly.
While members of Tshisekedi’s inner circle have been given the defense, interior, finance and education portfolios, figures from the anti-Kabila opposition have been named to key posts, including environment minister and deputy prime minister Eve Bazaiba of the Movement for the Liberation of the Congo (MLC).
The new foreign minister is Christophe Lutundula, close to Moise Katumbi, a former governor of Katanga province who himself attempted to challenge Kabila in a 2018 election.
With re-organization of the Kinshasa government East African states have moved in to start doing business with the DRC, which applied for admission to the East African Community in June 2019.
On the one hand, Tshisekedi wants to solidify his reconciliation with the countries of the EAC zone with which he has several times shown his solidarity since his inauguration in January 2019.
On the other hand, the Kabila camp — and in particular certain generals who have remained loyal to the former president — seem to be looking more towards the Southern African Development Community (SADC).
The new era for the DRC and East Africa started with the Kampala administration authorizing the surfacing or upgrading of the road from the border to Congo’s town of Beni as well as the road from the border post of Bunagana to the city of Goma.
The Uganda government said it will contribute about 20% of the project value while the rest will be met by Congo’s government in an envisaged public-private partnership.
Uganda and the DRC are also expected to ink deals on shared oil resource in Lake Albert.
Reports from current and former concessionaires suggest that there are over 2.5 billion barrels of oil in place underneath Lake Albert, shared between DRC and Uganda.
Uganda has recently signed the long-awaited Final Investment Decision (FID) with international oil companies Total E&P and CNOOC to pave way for the construction of the $3.55 billion 1440km crude export pipeline from Western Uganda to the Tanzanian Indian Ocean Port of Tanga, a key piece of infrastructure needed to get the east African country’s oil out of the ground and on to international markets.
Should DRC join EAC, the Uganda-Tanzania oil pipeline could also transport the Congolese crude oil.
In addition, Kinshasa also wants to take back two oil blocks from sanctioned Israeli billionaire Dan Gertler and sell them to another company. The blocks could be a natural fit for Tullow and Total, which already share rights to adjoining areas on the Ugandan side of the lake where more than a billion barrels of oil have been discovered.
Dan Gertler, a controversial Israeli mining magnate and friend of the DRC’s former president, Joseph Kabila, is believed to have used a series of shell companies to open accounts at Afriland First Bank between 2018 and 2020.
However, Kampala’s new relationship with Kinshasa comes at the time the DRC seeking $39.1 million in reparations for Uganda’s military intervention back in 1997. DRC accuses Uganda of sending troops, ostensibly to help, but ended up looting.
After two-and-a-half decades of frosty relations, including an armed invasion in 1997 that contributed to one of the region’s deadliest conflicts, Uganda is betting that infrastructure investments and shared economic benefits will build better relations and long-term stability.
Kenya, which is the current chair of EAC, is also giving Kinshasa a deal that will see it deploy officials at the Port of Mombasa to help fast-track clearance of goods destined for the Great Lakes. DRC may be granted dedicated clearing deports, complete with harmonized Customs.
“We intend to link, thanks to Kenya, the Indian Ocean to the Atlantic Ocean. This work should start in the next few days,” said an excited President Tshisekedi at a joint press conference last week. “It will take Mombasa-Beni through Uganda- Ituri-Kisangani to the River Congo. This will pave the way for energy projects.”
With potential guarantee for a smooth flow of goods to the Great Lakes, Kenyan companies are bracing for the scramble for DRC’s low-hanging fruit, against expected competition from the EAC and farther afield. Kenya has, therefore, offered to open diplomatic outposts in Goma and Lubumbashi in the troubled but resource-rich eastern DRC, in what President Kenyatta said would ease consular services for traders. The two sides also agreed to harmonize their visa rules.
For Kenya, the current $16.4 million annual trade with DRC is expected to go higher and the percentage share of the Port of Mombasa in delivering goods to the DRC will increase, according to Kenya’s ambassador to the DRC George Masafu.
Kenya Airways has signed a code-share agreement with Congo Airways to pursue ways of more frequent flights to Nairobi, Kinshasa and other destinations. The deal also involves aircraft maintenance and shouldering each other’s “excess” passengers.
The code sharing will initially be working for two years and officials said it could help both ailing airlines to sustain their routes across Africa. Kenya airways had been flying to Kinshasa and Lubumbashi and the new arrangement means passengers from Nairobi could travel to other regions of the DRC on a KQ ticket, even where Kenya Airways doesn’t fly.
Kenya’s Equity Bank officially opened their offices in Kinshasa, a year after buying stakes in the BCD Bank.
Kenya says it will be deploying troops to the Rapid Intervention Force, an arm of the UN Mission to the DRC [Monusco], composed of African troops.
Rwanda on her part has moved in to fill the security gap in DRC. According to the UN, Rwandan troops had moved into the DRC to prop up Tshisekedi’s government.
Released on 23 December 2020, UN’s latest 200-page report states that “from late 2019 to early October 2020, members of the Rwandan Defence Forces (RDF) were present in North Kivu.” presence of RDF has been confirmed in the territories of Nyiragongo, Rutshuru and Masisi. “Sixty members of the RDF carrying 18 PKM machine guns and four rocket launchers” were reportedly observed on Mount Rugomba in Rutshuru territory.
One of the largest countries by land in Africa, the DRC has vast potential for economic success based on the abundance of natural resources such as land, water, and minerals. However, the country has been faced with significant challenges related to political instability, high poverty rates, and recurring disease outbreaks.
For example, Congo has faced epidemics such as Ebola and measles and is also fighting Covid-19. Its human development index is poor, ranked 175 out of 189 on the UN index. And it has poor roads, yet it is rich with timber, gold, and other rare earth minerals.
Despite its vast size and wealth of natural resources, Congo remains one of the poorest countries in the world. Eastern Congo is particularly plagued by rebel violence.
The DRC’s myriad rebel groups are based where most of the imported goods imported go. Neighbours have been accused of funding rebels to access the minerals.
But a new study by the East African Business Council in collaboration with the German International Co-operation Agency shows that DRC presents a huge trade opportunity given that its huge population accounts for almost half of the population of the EAC member states combined.
The study titled “Opportunities for Trade in DRC: A perspective from East Africa” carried out in 2020 shows that the potential for trade in DRC has not been fully exploited by the EAC member states largely due to the prevalence of non-tariff barriers and the informal nature of the trade amongst them.
According to the report DRC’s imports from the EAC are dominated by petroleum oils and oils obtained from bituminous minerals (excluding crude), wheat or mesin flour, rice, cement and palm oil, with EAC’s exports of petroleum oils growing faster than that of other products.
“The DRC’s application to join the EAC is a signal to businesses in the EAC to strategically and operationally prepare to tap into the lucrative DRC market. In order to achieve this, a reasonable starting point would be to establish the opportunities for trade in the DRC that are aligned to the strength of business in the EAC,” says the report.
Joseph Hartung, a researcher at the Horn International Institute for Strategic Studies in Nairobi, said there are substantial challenges to the DRC’s integration. These include domestic problems with infrastructure development and chronic insecurity as well as economic and political squabbles within the EAC itself.
“These should certainly not be taken lightly. However, the massive potential of the DRC’s population of nearly 87 million people as a market for the EAC’s goods cannot be passed up. The DRC’s inclusion in the EAC has the potential to reverse current negative trends in trade volume with the EAC member states.”