Conflict in Congo has cut government revenues by 5%, economy minister says: EXCLUSIVE

Daniel Mukoko Samba, the Democratic Republic of Congo’s deputy prime minister and economy minister, spoke to Global South World on the sidelines of the Crans Montana Forum in Casablanca

• He said Congo’s economy remained strong, but the government had lost about 5% of its revenues as a result of rebels capturing towns in the east of the country.

• He expressed hope that the central bank would cut interest rates and help revitalise efforts to move the economy away from the US dollar
• He pledged to invest more in agriculture to improve infrastructure and help farmers increase yields as part of a 10-year plan to eliminate the need to import key foodstuffs

The DR Congo is resilient, and government finances remain robust despite large-scale rebel attacks in the east, Mukoko Samba said.

“We have lost the revenues because there are two provinces that we are not… controlling any more. We hope it's not going to take too much time. But so far, inflation is going down; growth is high; and public finances are doing well. So far so good. And we wish that this situation can come to an end so quickly so that we can recover.”

He put the lost revenue from the provinces of North and South Kivu at 5% of total government receipts. Rebels from the M23 group, which Kinshasa says is backed by neighbouring Rwanda, captured the areas earlier this year. With its eyes on mineral concessions in the region, Washington stepped in and last week brokered peace talks between the two nations.

Despite regular outbreaks of violence, the DRC economy has grown every year for more than two decades, recovering strongly after COVID. Much of that has been as a result of buoyant demand for commodities such as copper, cobalt and gold.

In February, the country halted cobalt exports following a price collapse, a decision that is still expected to be reviewed in June, according to the minister.

Dedollarisation

To help improve its control of the economy, the government is seeking to shift away from widespread use of the US dollar, which has been a popular shield against inflation and swings in the local currency, the Congolese franc. The central bank last year mandated that electronic payments should be made exclusively in francs but Mukoko Samba conceded that the switch is not happening as quickly as the government would like.

“We still have 90% to 95% of bank deposits in the US dollars, in the entire banking system in the country. And it's almost the same figure for bank credits, 95%. So that's the best illustration, you could have that. We have a highly dollarized economy.”

Asked how the government planned to change the situation, Mukoko Samba, a trained economist, said completing the process would require 10 to 15 years of consistent growth with low inflation. He indicated that he was looking to the central bank to help out by lowering interest rates which would encourage borrowers to take out local currency loans.

“Let's hope that the central banks will become, I would say, less worried about what could happen if it lowers the interest rate. They've kept it for now. One year and even more. So once that interest rate keeps going down or starts going down, then probably the interest rates on credits in Congolese francs will also be lower.”

Feeding the world

As the second biggest country in Africa and holding an astonishing 52% of the continent’s surface water, the DRC should be an agricultural powerhouse. And yet it is reliant on imports of some of its most important foodstuffs. Yet George Forrest, the businessman behind the country’s biggest food producers, believes that the country should be producing enough to feed the whole of Africa.Forrest’s vision is shared by Mukoko Samba, who puts a ten-year time frame on achieving self-sufficiency in staple crops such as maize and rice. Nevertheless, the country has a long way to travel with only around 1% of its cultivable land currently being farmed.

“What needs to be done is first, we have to invest more in agriculture because the whole chain is not in place. We are not putting money into seeds production; we are not putting money into irrigation; systems; we are not investing enough in research, agronomic research. So public investment in the agriculture sector is the first step.”

Videography: Glody Nzita Matondo