By the Blouin News Business staff

South Africa eager to invest in the DRC

by in Africa.

Congolese flag. AFP PHOTO/STEFAN HEUNIS via Getty Images

Congolese flag. AFP PHOTO/STEFAN HEUNIS via Getty Images

A 48-member business delegation from South Africa (S.A.) is in the Democratic Republic of the Congo (DRC) all of this week for the 7th Investment and Trade Initiative (ITI). South Africa’s Trade and Industry Minister Rob Davies said the DRC “is a strategic market for South Africa, with a domestic market estimated at 77 million people, and bordered by nine countries with a potential market of 200 million consumers.” He added that the DRC is “the largest market for South African products and services in sub-Saharan Africa.”

S.A. already has substantial influence in the DRC thanks to its military training, participation in U.N. peacekeeping, and regional diplomacy. South African Army instructors have trained over 9,000 soldiers from the regular DRC army over the last four years or so, under the terms of the countries’ agreement known as Operation Thebe. In fact, the DRC recently requested more such training.

But now the emphasis looks to be switching towards trade and investment. This year’s ITI aligns with the post-conflict reconstruction strategy for the DRC that S.A.’s Department of Trade and Industry has formulated. The strategy “entails infrastructure rehabilitation and development as well as the facilitation of investments into that country’s economy by South African entities.” As such, the South African delegation consists of business people from diverse sectors: agriculture and agro-processing, infrastructure, environmental, energy, mining and capital equipment, medical equipment, and electro-technical.

“A lot of South Africans are increasingly coming to the DRC and are tapping into the opportunities that are available here. Most of those who have invested in the country are reaping the rewards because this country has totally transformed,” said S.A.’s ambassador to the DRC, Ntsiki Mashimbye, at the ITI’s welcoming ceremony. He noted that the DRC’s economy will be taking off in the next few years, and S.A. needs to take advantage of this. “Opportunities range from producing oranges to building bridges. Roads are going to be developed, about 180 dams will be built,” he added. Mashimbye said this shows the DRC is a “good place” for entrepreneurs, although he cautioned South Africans to do proper due diligence in order for their businesses to succeed.

One upcoming business opportunity could stem from the DRC’s plans to develop one mega-farm between 50,000 and 150,000 hectares per province. These will produce food for local consumption and exports, and nearby new towns would be established, with processing industries and “many other jobs.” (The government also plans to have smaller agricultural development centers of 200 to 300 hectares across the country.) Most of the production at these mega-farms will be mechanized. “Let’s be honest, if 80% or so of your population is involved in agriculture, and they cannot feed 30% of your population, it means it’s not done in an efficient way, so there are a lot of them that should be doing something else,” said John Ulimwengu, the P.M.’s chief agricultural adviser.

Other huge opportunities lie in providing electricity to off-grid areas. A positive model that should be replicated is Samsung Electronics Africa’s “Digital Village,” launched last Friday in Kasenga, DRC. It uses solar power to run an internet-connected school, a “Tele-Medical Center,” and an Admin Center, which can be used as office space for local entrepreneurs and others with limited electricity supply.

The risks of doing business in the DRC are still high, but for South African firms the potential rewards might be irresistible.