Table of Contents
Introduction
Invest in Congo may seem difficult, but with a good knowledge of the country it will allow you to have a better view of the overall situation.
The Democratic Republic of Congo (DRC) is a small continent with many diversities, beautiful green spaces and youthful people. This country is rich in natural resources and cultures, music has a big place in lifestyle. It is not excluded that one cross the road with some sappers and sapology fans, discover what sapology movement is about.
Nevertheless, when it is time for investment, it is recommended to explore the country in way that is more analytic.
To do so, we will perform a quick analysis using PESTLE framework that will help us to take a big picture of DRC.
PESTLE is a framework that helps to analyze an organization’s external environment by examining six factors: Political, Economic, Socio-cultural, Technological, Legal, and Environment.
To invest in the Congo you must understand political history:
Since statehood in 1960, DRC is subject to multiple political and civil wars conflicts especially in the Eastern of the country.
Before the first presidential election in 2006. President Joseph Mobutu a former general of the army led the country during thirty-two undisputed years from 1965 to 1997.
From 1960 until today, the country had more than sixty new governmental teams. The government reshuffle happens on average each year or two.
This fast rotation contributes to making the political landscape complex for economic operators.
The lack of effective business continuity in-country management, is one of the biggest issues for companies in DRC.
You must have an economic overview:
After many years of economic recession, DRC appeared from recession in 2018 due to positive economic results between 2015 and 2017.
The country recorded 4,1% growth rate in 2018 versus 3.7% in 2017 and 2.4%. Mining activities drove those results.
DRC is a fragile economy that is re-emerging from years of conflict and instability.
Those results contrast with deficient performance in GDP (from 2.9% in 2017 to 3.9% in 2018) due to the increase of first consummation goods import and the presidential election in 2018.
DRC launched many reforms to improve the business climate.
DRC agreed on publishing a transparent report on natural resources revenues.
Other reforms such as laws on public-private partnerships, liberalization of telecommunications and insurance sector were also part of initiatives
You must know the Socio-cultural configuration:
World bank data have shown that in 2012, 77% of the population was living in extreme poverty with less than 1.90$ per day.
DRC is in second place just after Nigeria on this ranking.
DRC size is around two-thirds of Western Europe with more than 200 ethnic groups and 200 languages.
National Coverage is one of the biggest challenges for the telecommunication business, below an illustration of how big DRC is.
Figure 1. Comparison of DRC size to Western Europe
The World Health Organization said that life expectancy in 2016 was 59 years old for men and 62 years old for women.
The population is in majority young, around 70% are under 30 years old
Figure 2. DRC age breakdown (source: Encyclopedia Britannica
Due to economic and political instability, telecom infrastructure is among the least developed in the region.
The Fixed-Line infrastructure is almost inexistent giving mobile network providers the key role in the industry.
The connection to the West Africa Cable System (WACS) submarine optic fiber took place in 2013 giving the industry a slight change over satellite services.
Digital literacy still low, out of 88 million Congolese only 35 million have mobile phones and 16 million are internet users.
Figure 3. DRC age breakdown (Source: Hootsuite).
To invest in Congo you must have knowledge of the Legal framework
The primary framework that regulates the telecoms industry in DRC is Act n° 013-2002 of 16 October 2002.
Taxation and fees in the telecommunication industry have always been a big challenge in DRC. Companies have the obligation to pay below tax or fees:
- Value Added Tax (VAT)
- Excise duty of 10% directly influencing the customer price
- 27.6 % customs duty on all imported handsets
- 2 % of voice and internet revenues to the regulation authority
- Numbering fees
- Spectrum fees
- International and domestic interconnection charges.
To invest in Congo you must know the environmental issues
The equatorial forest is the second-largest tropical rainforest in the planet. After the amazon this forest contributing highly in slowing down the global climate change.
The preservation of this forest is not only a DRC issue but also a world challenge, supporting the development of alternatives to prevent usage of forest wood as development resources .
DRC is a big green land with approximately 135 million hectares of arable land (ccardesa.org, 2019)