The latest stop for Nairobi’s hardy tradespeople and financiers is Kinshasa in the Democratic Republic of the Congo. If everything works out, the new partnership might spur digital innovation in Central Africa and benefit the IT industries in East Africa.
Although the Democratic Republic of the Congo (DRC) joined the East African Community (EAC) only four months ago, the economic ties that allowed for its entrance already existed before it did. Animated marketplaces are located in the border cities of Goma and Bukavu, where traders from the DRC, Uganda, Burundi, and Rwanda trade commodities. Additionally, there are several artisanal mines run by miners from the DRC as well as neighbouring nations.
In addition to small-scale border trading, the DRC’s abundant mineral
Along with small-scale cross-border trade, the DRC’s abundant mineral riches have drawn the attention of its neighbours. Some of the attention has been blatantly or subtly violent, which has aided the DRC in its conflict with rebel groups around the nation. Due to the ensuing instability, neighbouring nations fought to defend their interests on Congolese territory, turning the DRC into a boxing ring.
The DRC is a desirable market for investors worldwide since it has 90 million people and more than $24 trillion in undeveloped mineral reserves.
However, with the DRC’s political climate turning in 2018, which resulted in longtime leader Joseph Kabila’s ouster in 2019, Kenyan business people who had been creeping into the country flooded in. 2020 will see Equity Bank, one of Kenya’s major largest lenders, strengthened its presence in the nation by acquiring Banque Commerciale Du Congo (it had already acquired a majority stake in ProCredit Bank) (BCDC).
The news was made by Equity Bank’s entry, but smaller Kenyan companies had already started moving westward years earlier. In the DRC’s mining hub of Lubumbashi, Kenyan mechanic Dorine Akinyi established a successful truck and heavy equipment repair business as early as 2016.
However, in the months before the country’s accession to the East African Community, major Kenyan enterprises started to prospect in the DRC. Following the confirmation of its EAC status, Equity Bank reported that during a trade tour, more than 20 Kenyan companies made investment commitments totaling $1.6 billion. Included in this is the additional $100 million the bank added to its DRC subsidiary. The governments of Kenya and the DRC joined together with Equity Bank to organise the trade trip.
Gold panning
The DRC takes up a sizable portion of central Africa. The country, the second largest in Africa, is bordered by nine nations (Angola, Burundi, the Central African Republic, the Republic of the Congo, Rwanda, South Sudan, Tanzania, Uganda, and Zambia), making it the African nation with the most borders. It is almost entirely landlocked, with the exception of a southwestern thrust that ends at the mouth of the Congo river as it empties into the Atlantic.
The surprising and crucial part of this narrative is the DRC’s eastern flank, which borders Tanzania, Uganda, Rwanda, Burundi, and Uganda. Along with developing similarly to the Western Rift Valley, the
It is almost entirely a natural border created by five of Africa’s Great Lakes: Lake Kivu, Lake Tanganyika, Lake Mweru, Lake Albert, and Lake Edward. The Western Rift Valley, which forms along its western arm and is where the East African Rift System is gradually tearing the continent apart, is also a part of this border.
In this region, which is also home to substantial natural resource deposits that have been at the heart of the DRC’s protracted conflict, informal cross-border trading is well established.
The sudden desire to formally establish commercial links in the DRC may have its roots in those very minerals. The money from the mining industry is calling them, but the banks are leading the drive.
In essence, Kenya has sought to establish ties to the DRC that go beyond finance.
Nanjira Sambuli, a researcher and policy analyst, told TechCabal, “I believe that following the politics of the “Great Lakes” has whetted my countrymen’s thirst to enter at ground level and seize the bag from the El Dorado that the DRC is.
James Mwangi, group managing director of Equity Bank, stated earlier this year to a Kenyan media outlet, “We want to disrupt value chains.”
Value chains may act as development’s catalysts. We therefore have a strategy—a blueprint for East and Central Africa’s transformation. We are explaining to investors like Tesla’s Elon Musk why it would be better to build an electric vehicle battery facility in the DRC rather than importing cobalt. Instead of shipping copper ore to, why can’t he also produce copper cables there?
Nanjira Sambuli, a researcher and policy analyst, told TechCabal, “I believe that following the politics of the “Great Lakes” has whetted my countrymen’s thirst to enter at ground level and seize the bag from the El Dorado that the DRC is.
James Mwangi, group managing director of Equity Bank, stated earlier this year to a Kenyan media outlet, “We want to disrupt value chains.”
Value chains may act as development’s catalysts. We therefore have a strategy—a blueprint for East and Central Africa’s transformation. We are explaining to investors like Tesla’s Elon Musk why it would be better to build an electric vehicle battery facility in the DRC rather than importing cobalt. Instead of shipping copper ore to, why can’t he also produce copper cables there?
Value chains may act as development’s catalysts. We therefore have a strategy—a blueprint for East and Central Africa’s transformation. We are explaining to investors like Tesla’s Elon Musk why it would be better to build an electric vehicle battery facility in the DRC rather than importing cobalt. Why doesn’t he export copper ore to China, where he imports wires, and instead manufacture copper wires there?
Following in the footsteps of Equity Bank, Kenya’s KCB Group ultimately revealed on August 2 that it had signed binding agreements to buy Trust Merchant Bank (TMB), a major lender in the Democratic Republic of the Congo. An agreement that had been the subject of rumours in Kenyan financial circles was finalised by the statement.
At the time, Joshua Oigara, CEO of KCB Group, pledged to buy a bank in the DRC with a “national footprint, available in all provinces.” TMB runs the largest bank branch network in the DRC, with 110 locations across 20 of the country’s 26 provinces. Following Equity Bank’s purchase
Being the preferred banker makes sense because every resource is connected to the financial or banking system, according to Sambuli.
Mwangi’s explanation for why he was optimistic about the DRC was that the prices of the raw resources that the country produces are at an all-time high on the world market. Its current account position has transformed from a deficit to a surplus because of this.
Does digital innovation have a place?
It can be tempting to merely consider the narrative from the massive extractive sector of the DRC. However, there are other business people interested in operating in the Congo besides financiers.
A government contract for 9 book titles and Longhorn Publishers’ arrival into the DRC were both announced this past Wednesday by the international education publisher. Maxwell Wahome, the chief executive of Longhorn, stated that his Nairobi-listed company wanted to use its books to reach 20 million students.
Leave feedback about this