The Kenyan entrepreneurs advance cautiously in the DRC, a new market in the EAC
Since the Democratic Republic of the Congo joined the East African Community, Kenyan businesspeople have been vying for a piece of the Congolese economic pie (EAC). They are, however, acting with caution, mindful of their new partner’s delicate political and economic situation.
Kenyan businesses are expanding their activities in the Democratic Republic of the Congo, with the government’s help, now that the nation, governed by Félix Tshisekedi, has been accepted to the East African trade bloc.
In November 2021, the East African Community (EAC) of Kenya arranged a 200-member trade delegation to the central African nation. According to Equity Group, the 15-day trade trip to the Democratic Republic of the Congo (between November and December 2021) was intended to strengthen economic links between Nairobi and Kinshasa.
The Kenyan banking giant’s plan was to “highlight trade and investment potential in the DRC,” as part of a government campaign to “promote regional commerce and encourage corporate development by unlocking investment opportunities in East and Central Africa.”
Kenyan enterprises, SMEs, and entrepreneurs will have the chance to present their services and collaborate with their DRC counterparts via this trade mission.
During its 44th special meeting on November 22 in Arusha (Tanzania), the East African Community Council of Ministers validated the DRC’s application for membership. The DRC, which borders five of the organization’s member nations – Tanzania, Burundi, Rwanda, Uganda, and South Sudan – was examined on its degree of compliance with the organization from June 25 to July 5.
On January 17, DRC Deputy Prime Minister and Foreign Affairs Minister Christophe Lutundula Apala Pen’Apala flew to Arusha, where he expressed optimism that his journey would “mark the last round of discussions before Kinshasa’s accession” to the Community.
He met with Kenyan Adan Mohamed, head of the Community’s Council of Ministers and minister in charge of the ECA, who also said that the discussions should be completed within 10 days.
People will be traveling from the DRC to the [East African] area and vice versa, thus DRC integration will be a game changer in terms of intra-regional commerce in East Africa.
According to an official meeting record, “the report on the discussions will subsequently be forwarded to the Council [of Ministers], which will then submit it to the ECA Heads of State Summit for consideration.” According to Peter Mathuki, secretary-general of the ECA, “once this phase is successfully completed, it will pave the way for the accession phase, which literally concludes the admission process, and the DRC will be admitted as the seventh member of the EAC as soon as the Summit [of heads of state] decides on the matter.”
The DRC’s desire to join the Community is not a certain conclusion. “The Democratic Republic of the Congo has borders with five EAC member states: Tanzania, Burundi, Rwanda, Uganda, and South Sudan,” he noted.
Equity CEO James Mwangi told the Kenya Broadcasting Corporation on November 12 that the business sees prospects in the DRC because of its population of roughly 100 million people, the majority of whom are young. “When we visited the DRC, barely 4% of the population had bank accounts, reminding us of Kenya in the early 1990s.” “We saw this big potential to ease access to financial services in Congo,” he said.
The financial business is also betting on the DRC’s natural resource riches. “Today, the world will be unable to succeed in its bet on renewable energy, particularly […] in electric vehicles, without the DRC, since it produces 70% of the world’s cobalt and almost 50% of the world’s copper… We have also observed the DRC’s potential in hydroelectric power generation and agro production, and we want to be pioneers in funding the DRC so that it may attain its full potential,” said James Mwangi.
Agriculture, the forest industry, and local and regional supply networks, particularly in the industrial sector, are among the most appealing areas of the Congolese economy, according to the Kenyan entrepreneur.
Despite the shocks associated with Covid-19, the African Development Bank estimates that real economic growth in the DRC will be +3.3 percent in 2021 and +4.5 percent in 2022.
This is due to an increase in the pricing of key mining goods such as copper, as well as a rebound in consumption and investment. Economic expansion in the nation, as well as the building of roads, schools, health facilities, and consumer goods companies, are creating new business prospects.
The secretary-general of the East African Community (EAC), Peter Mathuki of Kenya, also mentioned the DRC’s demographic potential in an interview with the Kenyan daily The Star.
“We will see individuals traveling from the DRC to the [East African] area and vice versa, so the DRC’s integration will be a major changer in terms of intra-regional commerce in East Africa,” he said.
“In 2018, for example, the value of commodities imported into the DRC was $7.4 billion.” While the value of commodities from the EAC amounted to just $855.4 million, or only 11.5 percent of the DRC’s imports,” Mathuki remarked, pointing to bigger market shares held by nations outside the zone such as China, South Africa, and even Zambia. According to the Kenyan ambassador, formal economic integration of the DRC into the East African Community may treble the latter’s proportion of the country’s imports.
Jubilee Insurance, Equity Bank, and Kenya Commercial Bank are among the Kenyan firms that have showed interest in the DRC (KCB). Equity Bank is already established in the Democratic Republic of the Congo.
In August 2021, the KCB Group announced its intention to enter the DRC via the purchase of a local bank as part of its continental development. Its managing director, Joshua Oigara, said at the time that KCB was in talks with “two to three banks” in the DRC about establishing a branch in Kinshasa in the near future.
Jubilee Insurance, the region’s biggest insurer, stated in October 2015 that it was opening a branch in the DRC to capitalize on the high demand for insurance. So far, the Kenyan insurer has collaborated with the state-owned Sonas to provide medical and life insurance products. Over the next five years, Jubilee hopes to build a portfolio of 5.5 million consumers.
Jambo Jet raised the frequency of their rotations to three flights per week two months later, in November, citing growing customer demand.
The executive in Nairobi supports Kenyan enterprises’ ardour for the Congolese market. President Uhuru Kenyatta conducted a state visit in April 2021, about a year ago. To boost bilateral commerce, the two nations negotiated agreements on transportation, security, and trade.
Among the agreements struck by Presidents Kenyatta and Tshisekedi was one on the processing of commodities at the Mombasa port, which granted specific benefits to DRC businesspeople.
Kenya recently announced the establishment of diplomatic posts in the eastern DRC cities of Goma and Lubumbashi to enable consular services for merchants.
Agriculture, education, health, sports, and tourism are among the economic sectors targeted by the two nations’ broad framework of cooperation, but so are the environment, SMEs, housing, energy, and infrastructure development.