International Trade in the D.P. Congo

News Related to International Trade in the D.P. Congo

Business outline for the D.P. Congo

Economic Overview

The economy of the Democratic Republic of Congo (DRC) is still marked by the two decades of political conflict which shook the country.  In spite of a relaunch of the Congolese economy since the transition, sustained by the massive support of financial aid sponsors, a clear slowdown was observed in 2009 due to the international financial crisis and the drop in raw material prices.  The global revival, the increase in prices, the international financial aid and the reforms adopted by the government have allowed an economic recovery in 2010.  After having dropped to 2.8% in 2009, the growth increased to 5.4% in 2010 and it should continue to strengthen.

The government has negotiated with the IMF a new program of extended credit facility (FEC) and engaged itself to establish a series of structural measures aiming to promote a strong growth, to control inflation and to improve the business climate.  Some factors, such as the low quality of infrastructures, corruption, lack of transparency in government's policies and an uncertain legal framework continue to slowdown the country's growth;  in addition, the humanitarian crisis and the domestic conflicts undermine the country's development.  Moreover, a large proportion of the economic activity is done in the informal sector and it is not reflected in the official GDP data.

FDI in Figures

FDI inflows have been very slow but they experienced a strong increase in 2007-2008.  As a consequence of the global recession, the flows petered out in 2009 and despite the revival, they still remain too low when compared to their potential.  The war, economic and political instability, corruption, and anti-trade political decisions have discouraged foreign investments.  Refugees and soldiers from Rwanda continue to be a destabilizing factor.  Moreover, political interference and local cartels hinder foreign investments.  However, the reforms supervised by the IMF have produced some stability into the investment framework.  The country has an enormous potential:  it is rich in mining resources largely unexploited such as diamonds, copper, cobalt, gold and uranium; it benefits from a significant domestic market; and it is located at a strategic position in the center of the African continent. 

The mining sector attracts most of the investments, and it is now followed by the telecommunications sector.  South Africa and Belgium are the two main investor countries.

Foreign Trade Overview

The Democratic Republic of Congo (DRC) is open to foreign trade which represented 60% of its GDP in 2008, before the reduction of trade due to the effects of the global recession (it only represented 30% of the GDP in 2009).  The government of President Joseph Kabila has implemented a series of reforms aimed at improving the country's business framework and at diversifying its exports, it is also trying to promote regional integration.

Meanwhile, the country, which had its first democratic transition in 2006, has to manage the challenge posed by the political instability in the eastern part of the country.  This problem has a considerable impact in the country's economic performance.

The DRC imports much more than what it exports, which translates into a substantial deficit in its trade balance and it is expected that it will remain negative for the next decade.  The main trade partners of the Democratic Republic of Congo are the European Union, China and the countries members of the SADC (Community of Development of Southern Africa).