News (77)
In the Democratic Republic of Congo (DRC), the African Development Bank (AfDB) will support a staple farming project with $260.4 million. The Congolese Council of Ministers approved the financing on October 11, 2024.
The project aims to boost the production of rice, corn, and cassava, the main food products in the DRC. It will include building storage facilities and providing financial support to producers and other stakeholders in these areas.
The funds will be allocated across several regions: the Western Axis, which includes Kongo Central, Maï-Ndombe, and Kwango; the Central Axis, covering Kasaï Oriental and Lomami; and the Eastern Axis, primarily in Sud-Kivu.
Environmental studies have been completed at the intervention sites, and certificates of conformity have been obtained for both production zones and storage infrastructure.
The AfDB plans to implement the project between 2024 and 2029. Funding will mainly come from the African Development Fund ($250.4 million) and the African Transition Facility ($10 million). The Congolese government will also contribute $51.2 million, bringing total funding to $311.6 million—well above the $163 million allocated for agricultural investment from 2025 to 2028.
This project aims to address food security challenges in the targeted regions. For instance, in the cassava sector, a staple for about 70% of the population, current availability is only 47 kilograms per person per year, while needs are estimated at 144 kilograms.
According to the World Bank, in 2022, 56% of the DRC's workforce worked in agriculture. However, the sector contributed only $51.7 billion to the economy between 2013 and 2023, despite the country having vast arable lands. The World Bank’s investments in the DRC’s agricultural sector currently stand at around $322 million.
Georges Auréole Bamba
Ivanhoe Mines scaled down its 2024 production targets at the Kamoa-Kakula mine in the Democratic Republic of Congo (DRC). In a press release dated October 7, the Canadian company revised its expectations from 440,000-490,000 to 425,000-450,000 tonnes of copper concentrate.
Last month, Ivanhoe was very optimistic about the mine’s outputs: "Thanks to ongoing improvements in throughput and optimized copper recovery after launching the Stage 3 concentrator fine mills, Kamoa-Kakula expects to maintain its record production run and achieve its 2024 targets".
With the commissioning of the third treatment plant last August, Kamoa-Kakula achieved a record production of 116,313 tonnes of copper concentrate in Q3 2024. So far this year, the mine has produced 303,328 tonnes, according to Ivanhoe.
While the revised estimate integrates the commissioning of the Phase 3 concentrator, it reflects "production losses due to intermittent electricity supply from the grid, especially before installing additional on-site generation capacity and ongoing agreements for electricity imports." It also includes "known and unknown risks and uncertainties that may cause actual results to differ significantly." The country’s power issues caused production in H1 2024 to fall 5% year-on-year to 187,015 tonnes.
Last year, Kamoa-Kakula produced 393,551 tonnes of copper concentrate, up 18% year-on-year. Sales in 2023 also went up, exceeding $2.7 billion. This year, they should be higher due to rising copper prices. In Q1 2024, the average copper price reached $9,215.84 per tonne compared to $8,726.90 during the same period in 2023.
Kamoa-Kakula is owned by Ivanhoe Mines (39.6%), China’s Zijin Mining Group (39.6%), Crystal River Global Limited (0.8%), and the Congolese state through Gécamines (20%). During a Council of Ministers meeting on October 4, 2024, Minister Jean-Lucien Bussa expressed a desire for closer involvement of the Congolese State in selecting buyers for the copper produced by this mine, which is not only the largest in the DRC but also ranks as the third largest copper mine in the world.
Pierre Mukoko
On October 9, 2024, Vodacash SA, the mobile financial services branch of Vodacom RDC, signed a partnership with the International Finance Corporation (IFC), the private sector financing arm of the World Bank. This strategic agreement will help Vodacom expand its user base for M-Pesa, its mobile micro-finance and money transfer service launched in 2012.
"IFC is very proud to sign this partnership with M-Pesa in the DRC to facilitate access to financial services for many more people. Through this partnership, IFC will expand the M-Pesa service, increase the number of agents using it, and provide more people in remote areas with access to this financial service," said Mary Porter Peschka, IFC Director for East and Central Africa.
With this partnership, Vodacom aims to strengthen its leading position in the mobile financial services market. As of March 31, 2024, Vodacom had 12.07 million subscribers, giving it a market share of 52.05%. Airtel follows with a 27.81% share, Orange has 20%, and Africell holds just 0.15%.
To expand the M-Pesa service, the partnership aims to "strengthen interactions with the mobile financial services industry" and promote "regulation that facilitates the expansion of electronic money" while reducing "over-the-counter (OTC) transactions," which are conducted directly between two parties without intermediaries.
Most people still use cash in the DRC. In 2022, the International Monetary Fund (IMF) estimated that only 26% of the working population had a bank account. According to the country’s telecom watchdog, the ARPTC, there were 24.19 million active mobile money subscribers in the DRC as of March 31, 2024, representing a penetration rate of 24.36% for a population of nearly 100 million.
One major barrier to using e-money and banking services is identification. To open an account, individuals need a voter’s card, driver’s license, or passport which many Congolese do not have. Vodacom states that this partnership with the IFC aims to "overcome challenges facing the mobile financial sector, particularly identification issues," while promoting "best regulatory practices."
While specific changes to current regulations are not detailed, the collaboration will focus on five main areas: providing loans as part of best practices; strengthening local teams to improve key personnel skills; integrating agents and merchants for better processes; developing a go-to-market strategy for registering M-Pesa customers; and enhancing risk management by creating efficient work processes and training Vodacash staff.
Pierre Mukoko
The Democratic Republic of Congo (DRC) is set to gain significantly from the discovery of large gold reserves by Barrick Gold Corporation, a Canadian firm. Mark Bristow, the firm's President and CEO, announced that these reserves are located in the Kibali region, about 150 kilometers from Arua near the Ugandan border.
This discovery presents major opportunities for mining subcontractors, local councils, and the government to earn more through taxes and infrastructure contracts with Barrick as it aims to increase gold production in the DRC.
To date, Barrick Gold claims payments of $2.87 billion to local contractors and suppliers, $1.66 billion in royalties, taxes, and levies, and $216 million in infrastructure and community support.
While specific details about the reserves are still under wraps, exploiting them could position the DRC among the world's top gold producers and exporters. Bristow stated that the new reserves will greatly enhance output at Kibali, which is already the largest gold mine in the world. “The newly defined ARK target, located 4 kilometers from the processing plant, has the potential to provide a multi-million ounce high-grade deposit,” he said.
In 2023, the DRC was the seventeenth-largest gold producer globally, with a slight increase in output from 2022. Production is expected to rise by 0.88% between 2023 and 2027, according to Global Data.
Barrick Gold, which owns the Kibali mine, is a joint venture between Randgold (45%), AngloGold Ashanti (45%), and Sokimo (10%).
Emmanuel Tumanjong
At the Hamburg Sustainable Development Conference (HSC) on October 7-8, 2024, Judith Suminwa Tuluka, the Prime Minister of the Democratic Republic of Congo (DRC), called for fair compensation for carbon credits for countries with large forest areas.
"The DRC, like the Amazon, is a solution country with its forest basin that acts as a green lung for the world. We must be fairly rewarded for our contribution to fighting global warming. It's time to have an honest discussion about carbon pricing. We have formed a strategic alliance with Brazil and Indonesia to prioritize our tropical forests. Our voices need to be heard, and negotiations must lead to real results," she said during the panel discussion titled "Summit of the Future - What Next?"
The Prime Minister also highlighted the carbon offsetting services provided by forest ecosystems. Congolese forests absorb more carbon than those in the Amazon and Southeast Asia combined. According to World Bank data, these forests are among the few that sequester more CO2 than they emit yearly, acting as a net carbon sink and removing 822 million tons of CO2 equivalent annually.
Given this context, Suminwa stressed the need for a fair global price for carbon credits so that countries can fully benefit from their forest resources.
Her call comes just weeks before the 29th United Nations Climate Change Conference (COP29), scheduled for November 11-22, 2024, in Baku, Azerbaijan. As in previous summits, climate financing for African countries will be a key topic of discussion.
According to the French Development Agency (AFD), 90% of the $22.5 billion in climate action funding recorded in Africa comes from external sources. A better valuation of carbon credits could help forest-rich countries raise additional funds to adapt to climate change impacts.
It's worth noting that Maï-Ndombe province in the DRC was one of the first regions to pilot the REDD+ program, which aims to reduce emissions from deforestation and forest degradation while promoting sustainable forest management.
Espoir Olodo
In March 2024, Sino-Congolaise des Mines (Sicomines), a joint venture between the state-owned Gecamines and a group of Chinese companies, signed a new contract with the Democratic Republic of Congo (DRC). Under this agreement, Sicomines will donate $324 million a year—about 32% of its profits—to fund infrastructure projects. This information was shared by the International Monetary Fund (IMF) in its report following the sixth review of its program with the DRC, published in July 2024.
Under the contract, around $5.5 billion should be spent on infrastructure development from 2024 to 2040, when Sicomines’ concession ends. Adding previous loans, total financing for the concession would thus exceed $7 billion. This amount far exceeds the $3.5 billion needed for the three-year public investment plan for 2025-2027. Additionally, it covers more than a third of the funding required for the first phase of the Inga 3 project (4.8 gigawatts), as outlined by President Félix Tshisekedi in his speech on December 13, 2019. This financing could significantly reduce the debt needed to complete this ambitious energy project.
Given that copper prices averaged $9,215.84 per ton in the first half of 2024, funding from the Sicomines contract for infrastructure could increase. The IMF notes that the annual donation of $324 million is based on an international copper price of $8,000 per ton. "The contract states that the subsidy will be adjusted: it will drop to zero if prices fall to $5,200 per ton and will increase by 30% if prices reach $12,000 per ton," the Fund said.
However, managing this financial boost is crucial to maximizing benefits. "Transparency and accountability mechanisms regarding the use of funds generated by the new contract need to be strengthened," says the IMF. To address this, they recommend that authorities include Sicomines' income and expenses in the budget and regularly publish financial reports on funded projects. A meeting was held at the Ministry of Finance last July to discuss how to implement these IMF recommendations.
In 2023, the DRC's mining sector generated $5.4 billion in revenue for the state from royalties, taxes, and other payments made by mining companies. This sector remains a key driver of the Congolese economy, and the revised contract with Sicomines could further enhance this dynamic. Along with funding for infrastructure projects, the revised contract includes royalties of 1.2% on Sicomines' annual sales and gives Gecamines control over marketing 32% of annual production. "This reduces opportunities for transferring profits from the DRC to Chinese buyers through transfer pricing," indicates the IMF.
Pierre Mukoko
In the Democratic Republic of Congo (DRC), the government plans to build a seed analysis laboratory and create a national seed service between 2025 and 2026. The authorities will spend about $18 million (51.6 billion Congolese francs) on the project. This information is part of the public investment program for 2025-2027 included in the finance bill for fiscal year 2025.
The document does not provide further details on the project, but it is expected to help regulate the seed industry and be welcomed by those in agriculture.
According to the National Report on Climate and Development (CCDR) released by the World Bank in November 2023, the certified seed system in the DRC is still in its early stages, with only 5% of farming households using improved, climate-resistant seeds. The report suggests that increasing public-private support for producing climate-resilient seeds could help the agricultural sector adapt better to changes in temperature and rainfall.
A 2020 report from the African Centre for Biodiversity (ACB) found that less than 4% of seeds used in the DRC come from the official seed system, whether purchased from agricultural traders or donated through development programs. Farmers primarily rely on seeds from their previous harvests or buy them from local markets and communities.
Espoir Olodo
Two months away from Air Congo’s launch in the Democratic Republic of Congo (DRC), executives from Ethiopian Airlines met with Jean-Lucien Bussa, the Congolese Minister of Portfolio. During the meeting, held on October 3, discussed the project. They believe its success will depend on strong cooperation between both parties.
Air Congo is a mixed-economy company with a capital of $40 million, where the Congolese state holds a 51% stake and Ethiopian Airlines holds 49%. This partnership allows Ethiopian Airlines to strengthen its lead over competitors in the DRC, a country rich in natural resources essential for energy transition, with economic growth projected at 6.5% by 2025.
Unlike local private airlines like CAA, Ethiopian Airlines can leverage its extensive international network. The airline currently operates four direct flights to the DRC: two to Kinshasa, one to Lubumbashi, and one to Goma. Additionally, it partners with Asky, which runs two daily flights to Kinshasa from Lomé and South Africa.
With Air Congo's launch, Ethiopian Airlines could also leverage its connections with international organizations like the United Nations. The airline's experience would help meet some air transport needs for these groups, which are often served by private airlines or chartered planes.
First Aircraft Delivery Expected in November
Air Congo’s arrival is a key step toward better air service, especially as road infrastructure struggles to connect major cities effectively. "This project aims to strengthen national air connectivity, stimulate the economy, and marks a major strategic turning point after the suspension of Congo Airways," said the Ministry of Portfolio.
Congo Airways has been inactive since July 2024 due to a lack of operational aircraft. The airline has 90 days from September to renew its international IOSA certification, which is currently suspended. This situation has reduced air transport options in the country. Before the COVID-19 pandemic exacerbated its financial issues, Congo Airways was carrying nearly 400,000 passengers annually, according to 2018 data.
Structurally, the Congolese State will appoint the deputy managing director and six directors for Air Congo, while Ethiopian Airlines will appoint the managing director and three other directors. For now, however, no detail has filtered on the investment strategy.
Ethiopian Airlines has previously provided aircraft to other partners but it’s uncertain if this will happen with Air Congo. After last week’s meeting with Ethiopian Airlines executives, the Ministry of Portfolio announced that the first aircraft would be delivered in November but did not provide further details.
Georges Auréole Bamba
Julien Paluku, the Congolese Minister of Foreign Trade (Democratic Republic of Congo) visited Tesla's factories in San Francisco on October 2, 2024. After the visits, the official said that the American company "gives hope" to the DRC, which seeks to produce electric batteries. "Cobalt, lithium, manganese, nickel, coltan... are housed in our land. The others, who don't have it, have done it in 20 years. Let's chase immediacy and plan," he tweeted.
Tesla serves as an inspiration. After raising about $7.5 million in 2004, the company's valuation reached nearly $785 billion by October 4, 2024, with earnings of $14.9 billion in 2023. This is more than the combined value of the 18 largest companies in the DRC's portfolio, estimated at $10.9 billion in 2022. Julien Paluku noted that this impressive growth shows that to achieve great things, you need to take action: "To get started, you have to get started."
The DRC took many steps to advance its project for the local transformation of resources essential for the energy transition. Among others, the country set up a Council to oversee its goals related to batteries and electric vehicles, the Conseil Congolais des Batteries. It also created the DRC Battery Corporation, a joint venture among several mineral producers responsible for supplying raw materials for pilot battery production plants. Additionally, a framework agreement was signed with Zambia to jointly produce electric batteries, enhancing regional cooperation in this key industry.
On the research side, a significant step was taken with the launch of the African Center of Excellence for Batteries (CAEB) at the University of Lubumbashi on April 22, 2022. This center focuses on promoting innovation and technological development in battery technology.
To achieve these ambitions, the DRC must overcome major infrastructure challenges, particularly in electricity supply and connectivity (roads and telecommunications).
Paluku's visit to Tesla is part of broader efforts by Congolese authorities in the United States to showcase the DRC's potential and attract American investors. These initiatives aim to secure international partnerships to support development in strategic sectors like electric battery production and effective use of natural resources essential for energy transition.
Julien Paluku previously led the Industry portfolio and helped develop a $58.4 billion industry plan.
Georges Auréole Bamba
Belgium's ambassador to the Democratic Republic of Congo (DRC), Roxanne de Bilderbing, met with Minister Jean-Lucien Bussa, responsible for public enterprises, on October 2, 2024. During their meeting, the ambassador learned about the government's plans to improve the governance, management, and strategy of public enterprises.
"The reform of public enterprises is fundamental to support the country's economic growth," she said after the meeting while voicing Belgium’s readiness to support the DRC in the process.
Since the new government took office in May, the ministry has been very active. Minister Bussa faces two major challenges: legal issues affecting state-owned companies and improving their performance.
"The repeated seizures of these companies' accounts have had disastrous economic and social consequences," Bussa noted at a conference on September 26, 2024. The conference focused on a decree aimed at securing the assets of public companies to protect them from financial threats.
The Minister also emphasized the need to enforce a 2008 decree requiring all executives of state-run companies to sign contracts that outline their terms of office, rights, and obligations.
The reform mainly aims to restore public companies as key players in the DRC's economic development. However, there is still much work to be done.
A study from 2022 by the Conseil Supérieur du Portefeuille shows that public companies are vital to the Congolese economy. By the end of 2021, their book value was $14.3 billion, making up about 26.14% of the country's GDP, down from 29.6% in 2020.
Regardless, many public companies are heavily in debt, often exceeding their asset values. Their poor operating results limit their ability to repay creditors, and they face significant cash flow challenges. In 2024, their short-term financing needs were estimated at nearly one billion dollars.
Cooperation with Belgium could significantly help revitalize these companies by providing short-term solutions to improve production infrastructure.
There are opportunities to reduce the public sector deficit through debt restructuring and long-term plans in partnership with the financial sector. Similar successful initiatives have been carried out in Cameroon for state-owned companies like AES Sonel (electricity) and Sonara (oil refining).
Georges Auréole Bamba
More...
DRC: Pepsi Bottler Varun Beverages Wants to Build a New Beverage Factory in Kiswishi City, with $50M
Varun Beverages, Pepsi Cola’s Indian bottler, plans to invest $50 million to build a new beverage production plant in the Democratic Republic of Congo (DRC). The plant will be built within the Special Economic Zone (ZES) of Kiswishi City, in Lumumbashi.
Spanning 15 hectares, the facilitate aims to leverage the logistical advantages of the Likasi road for shipping products to consumers in Lubumbashi and the surrounding region. This is Varun's second major investment in the DRC. It previously built a plant in the Maluku Special Economic Zone, near Kinshasa, the capital. This other project produces 1.2 million bottles per day.
"Varun's expansion will meet the growing demand for Pepsi beverages in the DRC and support our long-term growth trajectory in Africa," said Ravi Kant Jaipuria, president of Varun Beverages.
With the new project, Varun wants to helps boost the DRC’s agri-food industry and tap into the potential of the Congolese market. The country's youth population, which makes up 60% of the total population, offers a large consumer base for soft drinks.
Besides the DRC, Varun Beverages operates in Zimbabwe and Zambia and holds franchise rights for various PepsiCo products in Morocco.
ES
The Democratic Republic of Congo (DRC) imported about 14,500 tonnes of pork, mostly cuts and offal, in 2023. The figure, disclosed in the latest annual report of the Brazilian Animal Protein Association (ABPA), is over 28% higher than that recorded in 2022. That year, the DRC imported 11,300 tonnes of pork.
The surge placed the DRC as Brazil’s third-biggest pork buyer in Africa. Angola and Côte d'Ivoire are the top two. Increased demand for Brazilian pork highlights the potential for local producers to enter this market and develop a national supply.
Pork is widely consumed in the DRC, both in rural areas and urban outskirts. However, FAO data shows that national production remains low; it grew from 24,622 tonnes in 2012 to 27,415 tonnes in 2022.
To bolster the sector, many experts believe several interventions are needed, especially in production and marketing. These include educating farmers on good hygiene practices to ensure safe products for consumers. It's also important to improve access to essential inputs to lower production costs and introduce mechanisms for farmers to sell pork and by-products to restaurants, hotels, delicatessens, and supermarkets.
Espoir Olodo
President Félix Tshisekedi began a three-day visit to Hungary on September 29, 202. According to the DRC presidency, his trip will include political discussions, as Hungary currently holds the presidency of the Council of Europe. Observers believe this could be an opportunity for the DRC to ask Hungary to speak out against "Rwandan aggression" in the eastern part of the country.
The visit will also focus on economic matters. "To bolster their partnership, Hungary and the DRC will sign economic cooperation agreements in priority sectors such as agriculture, infrastructure, and energy production in the DRC," stated the Congolese presidency.
Tshisekedi is with several ministers, including the ministers of Foreign Affairs, Agriculture, Infrastructure, and Hydraulic Resources, as well as executives from the Congolese lithium company. The Congolese leader will also visit Hungarian industries, especially those involved in technological innovation.
While it's unclear if lithium battery production is a main focus of Tshisekedi's agenda, Hungary has valuable experience to share in this area. In recent years, the European nation has become a leading producer of lithium batteries.
The DRC aims to build a value chain around resources linked to the energy transition, such as lithium. The African country has recently established a Battery Council to develop conditions for producing essential components for electric mobility.
Georges Auréole Bamba
Microsoft co-founder, Bill Gates, met with the President of the Democratic Republic of Congo (DRC), Félix Tshisekedi, on September 24. During the meeting, Gates explored the possibility of improving satellite internet connectivity to bolster education in the DRC. According to the Ministry of Health, the American billionaire requested the audience.
If the project moves forward, Gates might implement his satellite internet solution on a large scale using technology from Kymeta, a company in which Microsoft invested $85 million in 2020. This would give Gates an edge over Elon Musk, whose Starlink services are currently banned in the DRC due to licensing issues.
Bill Gates expressed interest in the DRC's agricultural sector, which needs substantial investment to meet national demand and develop its potential as a food exporter. He also mentioned support from the Gates Foundation for public health initiatives, particularly in fighting diseases like polio.
Few days before the meeting, Congolese Minister of Higher Education Marie-Thérèse Sombo launched the "One student, one computer" project. This project aims to make university training more innovative. "This project aims for inclusiveness and equity, as it grants the same opportunities to all students, without distinction," the official said, quoted by Radio Okapi.
Though it was not reported, Gates and Tshisekedi may have also talked about mining. In November 2023, KoBold, a company active in Zambia's copper sector, expressed interest in expanding into the DRC. KoBold's main shareholder is Breakthrough Energy Ventures, which includes several billionaires like Gates and Jeff Bezos.
Georges Auréole Bamba