MASTERING YOUR MARKET UNDER AFCFTA (THE CASE OF CONGO DRC)

OVERVIEW OF CONGO DRC

Democratic Republic of Congo or Congo DRC is a country located in central Africa with a coastline of about 37 km. It is the second-largest country in Africa and the 11th-largest in the world with a population of around 108 million. It is a nation surrounded by the Congo Republic, Central African Republic, Angola and Tanzania towards the West, North, South and East respectively. The capital and largest city is Kinshasa. It is the third largest African city in the metropolitan area after Lagos and Cairo. Its official language is French although they have some other native dialects. DR Congo's level of human development was ranked 175th out of 189 countries.

ECONOMIC SNAPSHOTS

Congo DRC is a Central African Republic nation with very little access to water. Despite its extremely rich in natural resources and huge population, Congo DRC is ranked 88 economy in the world and 85 in total export in 2018. Congo DRC is a low-income country with an average of less than $1000 a year.

The Central African nation has suffered from political instability, a lack of infrastructure, corruption, and centuries of both commercial and colonial extraction and exploitation with little widespread development. In the ease of doing business ranking, Congo DRC scored 36% in 2020 and has a GDP value of over USD 48 billion and a per capita income value of USD 520. Agricultural products produced in Congo DRC include; coffee, cassava, sugar, palm oil, rubber, tea, cotton, cocoa, peanuts and so on. Also, Congo DRC has minerals such as; copper, cobalt, gold, diamond, zinc, and tin to name a few. The DRC's largest export is raw minerals, with China accepting over 50% of its exports in 2019.

MARKET CHALLENGES

As a business looking at the prospect of Congo DRC as a preferred market choice, there are some challenges that a business needs to overcome. There is the issue of corruption, poor infrastructure, weak judicial system and inadequate trained workforce. Transportation of goods can be a challenge.

The transportation network is substandard. The rail and road linkages between the commercial capital centre, do not connect to the capital Kinshasa. There is also the issue of insecurities, especially between Pointe-Noire and Brazzaville. Also, the challenge of corruption is somewhat prevalent among most African countries. Congo DRC is ranked 177 out of 190 in the ease of doing business.

SELLING FACTORS

Businesses prefer to advertise independently of wholesalers and distributors because of their multiplicity. Congo DRC is a French-speaking nation hence, product names and slogans can be in English, but detailed information has to be in French or the local language.

Selling in Congo DRC still functions both on the modern and traditional levels. The distribution of goods is done by truck and some are done by rails. Importers sell their products directly to wholesalers. Wholesalers then sell their products to retailers.

Many firms, particularly Congolese, Indian and Pakistan businesses conduct their business via the informal business channel, while large trading firms dominate most sectors and cater for the formal sector and the Congolese elites.

PAYMENT & EXCHANGE

For International companies interested in the market, wire transfers and Letters of credit are the most secure payment methods for risk mitigation. A Congolese exporter must choose a confirmation bank that has its network of correspondence with the Congolese bank proposed by the importer. This would minimize the risk of default on payment.

BUSINESS CULTURE

Congolese are generally open and accommodating in both personal and business dealings. However, protocols are still very important for business dealings.

Common sense, courtesy and social etiquette apply. Hands are shaken with men and women on the encounter of departure. All business meetings are usually conducted using the French language, while government officials are addressed with the appropriate title. The use of first names is not required until you are invited to do so. Monsieur, Madame and mademoiselle are the usual forms of address. Requesting for meetings, particularly with government officials should be done formally by a written request. In scheduling appointments, allow time and resources to establish a date and time, also prepare for impromptu cancellations.

MARKET OPPORTUNITIES

Congo DRC is a nation open with numerous market opportunities. The best prospect sectors include; oil and gas, forestry, consumer markets, hydroelectric power, textile, plastic, pharmaceuticals food, food processing and automobiles to mention a few.

Congo DRC has recorded steady growth in its GDP on an annual basis for three years from 2013-2015. Congo holds a high opinion of Western products and services, particularly in terms of the quality-to-price ratio.

The nation possesses one of the largest deposits of natural resources on earth. The Government of the DRC is also undertaking a multi-million dollar project to rehabilitate major sectors of the economy which include; agriculture, energy, construction basic infrastructure and transportation.

Also, there are moves by the government to improve the business climate and they are looking for foreign trade and investment.

MARKET ENTRY

Marketing of products as a foreign entity has no restrictions as long as such products conform to Congolese law. There are numerous ways in which a business can enter into the Congolese market.

Because of a limited industrial base in the DRC, few finished goods are produced in the country. A lot of products are being imported, hence there is a need to export to Congolese retailers.

A business looking to enter this market can also consider a joint venture approach. Many sectors require in-depth knowledge, expertise and capital which only a local partner can provide. Businesses should ensure to conduct thorough due diligence.

Franchising the business operations in the DRC is also an option a prospective business can explore. Also, opening an office in the DRC is beneficial.

To reduce the burden of opening a business, the National Agency for Investment Promotion (ANAPI) assists interested investors.

IMPORT DOCUMENTATIONS

Most products enter through the maritime port and the N’djili International Airport or several entry ports through the Rwanda or Uganda border. The Congolese Control Office (OCC), is the only governmental body in the DRC that is actively developing and enforcing standards and performing conformity assessment on imports and exports. DRC primarily relies on the Codex Alimentarius for food items. The Codex is applied to imports, but not to export. Most imports are admitted into the country without the need to meet specific standards, shippers need to follow international regulations. Importers must be licensed and authorized to make imports. The import documents required in the Democratic Congo (DRC) depend on the regular trade policy. The documents required for import to Congo DRC are based on the product importing, multilateral, bilateral or unilateral trade agreements, and other trade policies. Generally, the bill of laden, invoice, and certificate of origin packing list are import documents required.

The best prospect sectors include; oil and gas, forestry, consumer markets, hydroelectric power, textile, plastic, pharmaceuticals food, food processing and automobiles to mention a few.

IN CONCLUSION

Despite its extremely rich natural resources and huge population, Congo DRC is a low-income country with an average of less than $1000 a year. The Central African Nation is blessed with Agricultural products produced in Congo DRC including coffee, cassava, sugar, palm oil, rubber, tea, cotton, cocoa, peanuts and so on. The DRC's largest export is raw minerals, with China accepting over 50% of its exports in 2019. Congolese are generally open and accommodating in both personal and business dealings.

Congo DRC is a nation open with numerous market opportunities. The best prospect sectors include; oil and gas, forestry, consumer markets, hydroelectric power, textile, plastic, pharmaceuticals etc. In Congo DRC marketing of products as a foreign entity has no restrictions as long as such products conform to the Congolese law. The import documents required in the Democratic Congo (DRC) depend on the regular trade policy. For companies interested in the market, wire transfers and Letters of credit are the most secure methods of payment for risk mitigation.

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