Kenya leads scramble for DRC as Kinshasa opens for business

Equity Group CEO addresses journalists on the sidelines of the trade mission. [Frankline Sunday, Standard]

When newly elected President of the Democratic Republic of Congo (DRC) Felix Tshisekedi arrived in Nairobi in 2019, few people understood the importance of his first official state visit.

It came two weeks after Tshisekedi’s inauguration in the country’s first peaceful transition of power in more than five decades. 

The election itself had been delayed repeatedly since 2016, and Kenya had played a significant role behind the scenes to maintain stability in the volatile nation in negotiations that eventually saw immediate former President Joseph Kabila step down after 18 years in power.

President Uhuru Kenyatta was the only foreign Head of State present at Tshisekedi’s inauguration in a delegation that also included ODM leader Raila Odinga alongside cabinet secretaries Fred Matiangi and Monica Juma as well as a slew of MPs.

“We believe that Kenya and DRC have a common destiny and we are grateful for your contribution to the destiny of the DRC,” President Tshisekedi told his Kenyan counterpart at a meeting in State House.

“We believe that the cooperation between the two countries will be pivotal in the Africa that we want, and that is going to count in the rest of the world,” he said.

On his part, President Kenyatta pledged to support DRC’s economic ambition and facilitate political stability in the country.

“We will continue to help you achieve peace and stability because we have had a similar experience, which we can share,” he said.

“We are ready to partner in building infrastructure, sharing skills in the extractive industry and many other areas of mutual benefit.”

In keeping with this promise, a delegation of more than 250 Kenyan investors landed in DRC last week as part of the first DRC-Kenya trade mission in a move seen as the first major step towards boosting economic ties between the two countries.

The trade mission was supported by both the Kenyan and Congolese governments and facilitated by the Equity Group, which has its sights firmly set on becoming a key financier to the DRC’s economic revival after decades of being viewed as a failed state.

In December last year, Equity Group received approval from the Central Bank of Congo to acquire a majority 77.5 per cent majority stake in Banque Commerciale du Congo (BCDC).   

The new brand, Equity BCDC was inaugurated in April this year during Uhuru’s state visit to the DRC.

Equity Group chief executive James Mwangi is bullish about the subsidiary’s growth prospects.

“The trade mission was mooted during our visit in April, and we are overwhelmed because we had planned to bring 200 Kenyan investors but ended up with 253 and more than 2,500 entrepreneurs in DR Congo registered to host us,” said Mwangi.

The two-week trade mission will see the Kenyan investors visit key provinces, including Kinshasa, Lubumbashi, Goma and Mbuji-Mayi.

“DRC is joining the East African Community (EAC) and this is one way of welcoming them to the economic bloc as we leverage the free flow of capital and labour,” he said.

The second-largest country in Africa by landmass, DRC is endowed with natural and mineral resources, including the majority of the world’s cobalt and coltan reserves, raw materials crucial in a variety of industrial and digital applications.

The country also boasts vast agricultural land holdings, Africa’s largest rainforest, as well as an immense potential for hydroelectric energy production.    

However, years of political conflict have made it difficult for foreign investors to make headway in the country, but 2019’s political transition is seen as a positive signal that the country is open for business.

George Nyanja, a former Limuru MP and an architect by profession is part of the Kenyan delegation to DRC. He said he is looking forward to setting up shop in the country.

“This is a golden opportunity for Kenyan investors who are hardworking and eager to do business,” said the former politician.

“I have designed airports in the DRC, and right now I am going to design two more in Goma and Bukavu.” 

Joss Dijimba, the founder and CEO of Pharmagro, a firm headquartered in Kinshasa that deals in the production of pharmaceutical products, and Dijimba, a company that produces packaging materials, is also upbeat about the opportunities arising from the current political stability.

Dijimba said the onset of the Covid-19 pandemic highlighted the need for establishing local industries in the country, which for years relied on imports to sustain a growing consumer market.

“We have been importing everything and with the closure of the borders with the pandemic, we saw the essence of establishing local production,” he said.

According to Dijimba, the size of the DRC population provides an insatiable market for both local and international investors.

“It feels good to have African investors come to African countries to invest because we are used to people from outside the continent coming in, but often they do not know the nuances of the local markets,” said Dijimba.

He identified the high cost of credit as one of the impediments to the growth of local industries in DRC but noted that the influx of investors accompanied by financiers would now be a game-changer.

“Access to affordable credit with longer repayment periods and lower interest can be a boost,” he explained.

“We are in the process of expanding and in a few years we could increase our output five times compared to what we are doing now.”  

Equity boss Mwangi said the lender expects Equity BCDC to surpass the Kenyan division within the next decade given the untapped potential in the vast country.

“Our entry into the DRC is backed by the Sh500 billion war chest that Equity Group wants to deploy into the region, and our message to investors is that the financing is available for their prospective ventures,” he said.

“DRC is twice the population of Kenya, but the banking industry is also not as competitive as Kenya. At the moment, Equity BCDC holds 27 per cent market share in DRC, while Equity Bank Kenya holds 13 per cent market share. We predict that Equity BCDC is likely to outperform the Kenyan business within five years.”  

[email protected]