Have you ever thought about doing business in the Democratic Republic of Congo (DRC) as a very viable option for success? Most of you will probably reply with ‘No’. And I have to confess to you: this includes me.
The last thing I saw about the Congo was a documentary of mass rapes of Congelese women, one of the most disturbing films I have ever watched.
There is not much information out there about doing business in the DRC and maybe that coupled with the shocking images on my TV screen contributed largely to my own ignorance towards the country as a upcoming market and a valuable business destination in Africa growing at around 7% each year.
Now, here is what happened. Waiting for my flight from Nairobi to Kigali I met a Rwandan business man at the airport who works in Kinshasa, DRC (it is a long story indeed, but I will make it short here). We had afternoon tea together with him and three other Rwandans talking about business opportunities in the region. Here are the words of this young man, who I will call B.:
B.: “Doing business in Rwanda is great, but wait until I tell you about doing business in Congo and you will cry”.
And you know what?! He was right! We were crying tears….from laughter….by the time he finished. Because here we sat with all these ambitious Rwandan business people and suddenly all of them wanted to buy a plane ticket to Kinshasa. He gave us incredible insights, and while I could not verify them, I will take his words for it (maybe with a pinch of salt).
B. explained to us that the potential in Congo was beyond imagination. The DRC is a country with over 70 Mio people, and according to B.’s latest figures with about 12 Mio of them living in the capital Kinshasa, yet at the moment the Congolese were hardly producing anything themselves. Everything was either largely imported or simply unavailable on the market.
He talked about bread and how one Indian lead company was producing around a million loafs a day covering most of Kinshasa, owning almost the entire market, because no-one else was competing.
There were only a handful of banks for a tiny portion of the population, which opened incredible potential for financing businesses covering risk with short-term loans offered at staggering interest rates. Locals were still grateful for those high-interest loans, because they provided a rare opportunity to grow their small businesses.
There is hardly any agricultural production or manufacturing taking place in this huge country, which is heavily depending on minerals, and this makes Congo one of the biggest regional buyers of imports.
“In the Congo you can produce or import anything, and it will sell. Look at my laptop. It costs a maximum of US$500 anywhere in the world. In Kinshasa I bought it for almost US$2,000. I needed it urgently and had no choice. You need to come and see it for yourself and you will be amazed.” B. said.
We sipped our tea, while B. continued to give us insights into Congo’s business climate. He told us that there were small shops where people would pay $10 just to get What’sUp downloaded onto their mobile phones and how it was difficult to find a barber in Kinshasa. This also demonstrated the need for very basic services on the ground.
“What about safety”, I asked.
“The conflict and dangers you hear about are happening in Eastern Congo, it’s a small portion of the country and it is very far away from the capital city. Kinshasa is certainly safer than Nairobi”, B. claimed.
More Congolese are now returning home to build businesses. One of them is Olivier Ndombasi, who turned his father’s small store into a supermarket franchise called Peloustore, with four locations and more on the way. “It’s very exciting to be able to do things in a new environment, and do things you didn’t think you’d be able to do,” Ndombasi tells CNN in an interview. “The challenge is great, but it’s very exciting.”
In the same report, Alain Yav, founder of Pygma Group, which produces the country’s most popular TV show, seems to share that belief: “Come to Kinshasa, you unlearn what you thought you knew. You take your MBA book, your business plan, put it in your pocket and start from scratch”
According to a 2013 report by Clifford Chance the main investment sectors are the following three:
Mining
The potential for investment is enormous as the DRC has the largest untapped deposits of raw mineral ores in the world.
Telecommunications
Even if the telecommunications sector has already experienced tremendous growth in the last few years, the potential for further growth is enormous, considering the current telephone (landlines and mobiles) penetration rate is only 18.6%. It is the second most dynamic market, after the mining sector
Energy and Power
The DRC has the potential capacity to generate 100,000 MW of hydropower, of which only 6% is currently used. The hydropower sector in particular has a huge potential for growth since 52% of Africa’s surface water reserves are located in the DRC.
For us in the Africa Business Jumpstart community, these industries seem often far-fetched, having said that, telecommunications/ICT and energy solutions can also be introduced by you at a small-scale level targeting households.
There are new efforts by the Congolese government to industrialize the agricultural sector, but again the plan does not involve the millions of Congolese small-scale farmers, but addresses international investors. Some investors are said to have expressed interest but no deals have been signed yet, according to Reuters. The images of war and instability are probably the reason for that and up to this day, doing business in the DRC is no straight forward undertaking. According to the World Bank it still is one of the most difficult places in the world to do business in, but the new 2015 index is finally showing some improvements in this regard.
This surely demonstrates to you that the DRC still has a very long way to go, but with Kinshasa being a safe hub to do business in, this is precisely why the current situation offers amazing opportunities for you with little or no competition. There is huge potential to start something small and grow it to a big success story in a short period of time. Consider manufacturing, agriculture, construction, transport, finance, and an often highly competitive segment in other countries: import-export. This could even work if you are based abroad finding a partner in Kinshasa handling the business with him or her.
The DRC is a dynamic market place with immense potential and it is certainly on my list from now on – I want to visit, see, learn, and possibly implement. It is a high-risk high-reward area – but the risks are different from those so widely perceived. I hope this article has managed to bring the market place Congo a little closer to you and filled you with excitement. Because that is a major driver towards our path to success in Africa!
What was your image of doing business in Congo so far or which experiences can you share with our Africa Business Jumpstart Community? As always , we look forward to hearing from you in the comment section below!
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These are interesting insights Harnet! “… the DRC holds 52% of Africa’s surface water reserves” Amazing!
This shows again how little the rest of the world (Africans included) knows about the continent. In my mind, I’d imagined the DRC would be a “No go area” – war, hunger etc. No thanks to the gory stories and images from the media.
This explains why the few businesses that summon the courage to enter ‘bad image countries’ and see things for themselves almost always achieve tremendous success.
Your revelations here prove again that most of the perceptions we have about Africa are far from its realities. Thanks for bringing this to light.
Great article as always!