Congolese resources can propel country out of poverty
On the sidelines of the first-ever Kinshasa Economic Forum in March, the EU launched an initial mobilization of €50 million into the Democratic Republic of Congo’s (DRC’s) critical minerals sector. The investment underlines just how important Congolese resources are to the rest of the world, with the country home to an estimated €4 trillion in untapped raw materials, many of which are increasingly in demand due to the global digitalization of today’s world.
But despite its embarrassment of natural riches, the DRC still ranks as one of the poorest nations on the planet, with almost two-thirds of its population suffering from poverty. In order for the DRC to achieve the full potential of its abundant natural resources, it’s necessary for trustworthy international investors to lend their financial clout – and their technical expertise – to bring Congolese infrastructure in line with the quality and capabilities that its resources—and its people—both demand and deserve.
Strong mining sector can’t paper over Congolese cracks
On the surface of things, the economic outlook should be optimistic for the DRC. A recent visit by representatives from the International Monetary Fund (IMF) saw real GDP growth revised from a previous estimate of 6.1% to 8.5% in 2022, with a similar jump (6.7% to 8%) projected for the coming year. That’s largely thanks to the performance of a booming mining sector, which enjoyed a 20% surge in production last year.
Nonetheless, the country is still buffeted by significant economic headwinds. The mining industry boom did not fully offset the spike in food and energy prices precipitated by Russia’s invasion of Ukraine, meaning the deficit deteriorated further to 2.7% in 2022. That has only compounded problems in a country listed as among the five poorest globally by the World Bank, with 62% (some 60 million people) of the DRC’s residents living beneath the International Poverty Line of $2.15 per day. It’s also ranked a lowly 164th out of 174 countries on the Human Capital Index, with Congolese babies expected to achieve a mere 37% of their potential due to their difficult start in life.
Despite those grim statistics, there are an abundance of reasons to believe the DRC can turn things around. The largest country in Sub-Saharan Africa, it’s home to around half of the world’s known cobalt reserves, while it also has substantial stores of coltan, diamonds, gold, tin and tungsten. All of those are expected to become more in-demand in the coming years due to their use in computer chip technology, while the rise of electric vehicles will further spur demand for these critical minerals. Meanwhile, the DRC is also home to 53% of Africa’s and 13.5% of the planet’s hydropower potential, while it has the world’s second largest rainforest and 80 million hectares of arable land, only 10% of which were being tilled in 2016.
Trustworthy, targeted FDI is essential
The DRC needs solid and dependable international partnerships in order to leverage those incredible resources. Fortunately, the DRC has already benefited from several such collaborations. For example, Barrick Gold has successfully transformed the Kibali gold mine into the largest of its kind in Africa, ploughing some $4.6 billion into the country over the course of 13 years to do so. 95% of the company’s workforce are Congolese and the company has also mentored sustainable projects in the country, such as the Azambi hydropower station, while its CEO is aiming to raise $3 million for abused women and neglected children through a charity motorbike ride spanning over 8000 km.
Similarly, CMOC—one of the world’s largest mining companies and the world’s second-largest cobalt producer—is equally committed to carrying out their operations in the DRC sustainably and in a way that benefits the local community. To illustrate the point, one only need to look at the TFM Social Community Fund created by CMOC’s TFM operation, into which 0.3% of net revenue is funneled each year and which has raised $59.06 million since TFM began operations in the DRC in 2009. Furthermore, with the signature of the Scope Statement for Community Development in 2021, it has detailed plans in place to invest 31 million dollars in community development over a five-year period, targeting investment to priority areas including health, education, economic development, roads and bridges, electricity, sports, infrastructure, and telecommunications. The company also makes a point of continually interacting with local stakeholders, holding quarterly meetings with them and resolving any disputes that might arise through an independent mediation committee, 60% of the members of which are selected from the community.
Canadian mining giants Ivanhoe Mines are also building infrastructure in the DRC which will not only benefit their own operations, but the greater good, too. Their rebuild of the spur railway line at their Kipushi zinc mine is one such investment, while they have also upgraded the Mwadingusha hydropower plant (creating 78MW of clean energy) and are intent on doing the same with Turbine 5 at the Inga II plant (producing 162MW more). Any power not consumed by their mines is redirected back to the national grid.
Plumbing the depths to reach for the skies
As stressed by the EU Commissioner for International Partnerships Jutti Urpilainen at the recent Kinshasa Economic Forum, any investments and accords struck with the DRC “must be about more than just mining”. The importance of securing dependable investors who have both a clear vision of how to develop the DRC’s awesome potential and the experience to see the project through cannot be understated.
That’s why the EU’s €50 million mobilization of funds is such an encouraging step in the right direction, alongside the ventures outlined above by private companies in the DRC’s vital mining sector. While the Congolese economy still faces major headwinds, they are by no means insurmountable. Indeed, with the cornucopia of natural resources and untapped potential that the DRC’s population has under its feet and at its fingertips, there’s no reason why one of the world’s poorest nations can’t transform itself into one of the richest. It will take time, effort and, above all, investment – but a brighter future for the DRC could well be in sight.