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Why EAC private sector wants Congo in the bloc

By Noel Wandera
Thursday, August 20th, 2020
EAC private sector wants Congo in the bloc.
In summary
    • The potential membership of the Central African country is being viewed as a game-changer, given its natural resources wealth and a huge consumer market of 81 million people.
    • It is the world’s biggest producer of cobalt, a major component in the manufacture of rechargeable batteries for electric vehicles, and Africa’s main copper producer.
    • Experts say DR Congo’s EAC membership offers the potential of opening a vast trading and communication corridor right across the middle of Africa from the Indian Ocean to the Atlantic Ocean.

East African Community (EAC)  Partner States have been urged to to fast-track admission of DR Congo into the regional bloc to enable businesess benefit from trade valued at about $6.6 billion (Sh716 billion) and consumer market of 81 million people.

The East African Business Council (EABC), a regional lobby for business and the private sector, said the country is a source of goods that EAC can ably supply, but currently controlled by China.

It said China currently commands a share of 31.2 per cent, followed by South Africa at 15.8 per cent and Zambia 13 per cent.

Peter Mathuki, EABC executive director and chief executive said DRC will also benefit from the larger EAC Common Market and Common External Tariff framework. 

“It will also have access to the sea ports of Mombasa and Dar es Salaam at competitive rates.

Their huge population of 81 million people also provides a vast opportunity for small and medium-sized enterprises (SMEs) from the EAC region,” he added. 

Mathuki said the market of approximately 81 million consumers DRC offers great market opportunities for EAC SMEs to export plastics and rubber, processed foodstuffs as well as textiles and leather

Mathuki was speaking yesterday during the virtual launch of a study by the EABC and  German Agency for International Cooperation (GIZ) on trade opportunities in the DRC that can be snapped up by EAC’s SMEs.

“The study will enable SMEs in the EAC to realign and focus their operations to match growing opportunities in the DRC,” said Mathuki.

It will also identify key DRC’s key supplying markets and enable SMEs to gauge and benchmark on competition.

According to the study, total imports into the DRC in 2019 stood at $6.6 billion, with EAC exports into the Central African country in 2018 standing at $855.4 million (Sh92.8 billion ), or 11.5 per cent of total imports.

During the period, Rwanda was the biggest exporting goods worth $337.4 million (Sh36.6 billion)  followed by Uganda at $204.3 million (Sh22.17 billion) and Kenya with $149.8 million (Sh16.26 billion). 

Exported goods

On their parts, Tanzania and Burundi exported goods worth $144.9 million (Sh15.72 billion) and $18.9 million (Sh2.05 billion) respectively to the DRC.

The DRC, a natural resource-rich country, formally applied for admission to the six-member EAC bloc in June last year. 

The application came following months of talks between DR Congo President Felix Tshisekedi and Rwanda President Paul Kagame, who chairs the East African Community.

 In response, President Kagame directed the EAC Secretariat to table DR Congo’s application for discussion at the next Heads of State Summit in November.

If it meets the admission requirements, members will vote on its admission.

The EABC-GIZ study reveals that non-tariff barriers in DRC have hampered business, translating to high cost of doing business in the country, but which the EABC is ready to play a role in assisting to rectify.

“EABC being the apex body for the private sector in the region will play a critical role in advocating for ease of doing business in Democratic Republic of Congo which will in turn lower cost of doing business, making DRC competitive, as we prepare to join the African Continental Free Trade Area,” said Mathuki. 

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