The Democratic Republic of Congo (DRC) is in the news recently owing to protests about President Joseph Kabila’s apparent attempt to stay in office. Kabila has been president since 2001, when then-president Laurent-Desire Kabila, his father, was assassinated. It’s a striking contrast to the opportunities that are beginning to attract investors to the market.
Kabila’s term ends next year, after a constitutionally-mandated two elected terms in office. The president’s plans to begin a census prior to the election could cause a delay, which has sparked suspicion that he is simply attempting to prolong his hold on power.
In addition to arguing that a census will afford more opportunity for political participation, John Mbaku, an economics professor at Weber University and nonresident senior fellow at the Brookings Institution, told AFKInsider that Kabila has made a public services justification for the census.
“He argues that the census will allow the government to be able to determine how much public services are required, because if you don’t know how many people you have, the government will not be able to provide public services.
“But you see, that sounds like a joke because the Congolese government hasn’t been providing public services to anybody in the last 20 years or so.”
Protests and attendant internet shutdown aside, DRC looks rather unstable on paper.
Ben Longman, managing director of market intelligence research firm Trendtype, told AFKInsider, “The quality of governance in the DRC is among the poorest in Africa, and in some areas of the east the government has little practical control.”
Longman said that, of the 50 African countries Trendtype tracks, DRC has had one of the slowest growth rates in Africa since 2000, and that only Somalia and the Central African Republic have lower Gross Domestic Product (GDP) per capita numbers.
GDP per capita is a measure of each resident’s “share” total economic activity and is often used as a measure of income.
Infrastructure is also sorely lacking. Mbaku points out that it can take four or five days just to travel 100 miles owing to the lack of road and transport infrastructure.
This hints at the deep disparities between urban and rural areas: while over 98 percent of households in the country’s capital Kinshasa have access to safe drinking tap water, for rural households the number falls to less than 12 percent.
The numbers are just as stark for electricity. Over 40 percent of urban households had electric lighting in 2012; only 0.8 percent of rural households enjoyed the same. In Kinshasa, electric lights could be found in nearly 75 percent of homes.
“In short,” Longman said, “Consumers face a considerable battle to get access to goods and services… Getting clean water, gathering fuel to cook with, getting to and from work, buying and storing food, all these things take time and energy.”
That being said, DRC has a great deal of hidden potential.
“DRC is often positioned as a less-developed version of Nigeria and thought of with a similar narrative — a fast growing population in a country rich in natural resources,” says Longman.
Trendtype estimates suggest that DRC’s population will more than double to 155 million in 2050, though there are still serious infant mortality issues to contend with. Kinshasa, the capital, is also expected to grow into one of Africa’s megacities in the years to come.
Of course, that won’t make market entry for retailers or investors any easier. With a dispersed, relatively poor population and a lack of basic services and infrastructure, entering the DRC marketplace presents significant practical challenges, even for companies well-versed in African expansion.
For example, South African retailer Shoprite, operates in 14 African nations, opened a store in Kinshasa in 2012 with ambitions of greater market penetration, but it has yet to open a second store.
“DRC,” says Longman, “Is a market for pioneers only at present.”
“For many investors, entry in the next three to five years still requires considerable cost, DRC-specific expertise, and few trusted partners to rely on,” he added.
But the opportunities to serve an enormous and growing consumer base hungry for staple products and basics are certainly apparent to those with the requisite patience and perspective.
What the future brings to DRC depends largely on how the country can balance population growth with delivery of basic services. Says Longman, “The key to growth in DRC is security (stability), governance, enfranchisement (of consumers), and infrastructure.
“So many of the opportunities are all those things related to infrastructure and which in turn remove barriers to consumers and drive major changes in consumer lifestyles: investment in roads, rail, ports, telecoms, power and electrification, water, housing.”
Of course, infrastructure points back to DRC’s politics, and improving governance in a nation where authorities don’t even control the entire territory will require far more than an accurate census (or a fair and punctual election).
Difficult though it may be, Mbaku argues that what is needed now is a deliberate process of state-building. “The direction they need now is to come up with a government of national unity.”
He says, “In order for you to have peace in the country the majority of people who live in the country have to understand the law, and they have to be willing to voluntarily obey the law.”
Without legal legitimacy, Mbaku argues that resources end up being squandered on controlling the populace, a situation that also gives rise to corruption.
On the other hand, with institutions and rule of law, DRC’s government could focus on more important tasks, like encouraging economic growth to the enrichment of the entire nation.
While foreign businesses will surely attempt to enter DRC’s potentially rich market either way (and yes, this allusion to DRC’s wealth of natural resources is intentional), the practicalities of how those goods and services will be distributed is still an open question.
In the end, one hopes that the attractiveness of the rising consumer class also prompts the kinds of key investments that the majority of DRC’s citizens can benefit most profoundly from, those lynchpins of modern life: roads, power, water, housing.
