October 23, 2017
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Doing Business in Congo- The External Environment

Democratic Republic of the Congo (DRC)
Capital – Kinshasa
Population – 69.6 million
Area – 2.34 million sq km (905,354 sq miles)
Major languages – French, Lingala, Kiswahili, Kikongo, Tshiluba
Major religions – Christianity, Islam
Life expectancy – 47 years (men), 51 years (women)
Currency – Congolese franc

Political Context:
Democratic Republic of the Congo which is otherwise widely also known as the “Africa’s First World War Zone” due to its infamous wars that involved seven nations around it, mostly influenced by corruption, conflicts over basic resources such as water, access to rich minerals and other political agendas. The war was driven by various national and international organisation that had an outcome out of it.

Like many countries in Africa, the background of the war dates can be traced to the Belgian colonial rule that stretched upto 75 years. In 1960, once left on their own terms, Congo had little to flourish on economic matters than it has in the political rights.
Just a few months after Patrice Mumumba became the head of the state, he was toppled by the US and European Cold War ally Mobutu Sese Soko. US policy declared on working for the “soviet elimination” from the nation and a fight for communism along with the newly elected head Mobutu. However, the main interest remained in providing and securing the access to rich mineral resources, strengthening their economic and strategic interests. Mobutu used his US allies to suppress his own nation and people for three decades that saw millions die in a rebellion zone. His brutal regime was later overthrown by Laurent’s Kabila forces in 1997 with the help of Rwanda, Uganda, Burundi, Angola and Eritrea. This was a sign of relief by many but the situations deteriorated. Due to his continued interest with his US allies, mismanagement and corruption, Laurent Kabila was assassinated in January 2001.

In 2006, Joseph Kabila was elected as president in what was deemed a credible electoral process where around two thirds of voters voted, just under 60% of whom voted for Kabila. Around 40% voted for Jean-Pierre Bemba who was more popular along the eastern part of the country. Kabila was voted in on a strong platform of prices to stamp out corruption and promote health, education, housing, employment and infrastructure. However, some four years on the International Crisis Group describes his record as “abysmal” because his presidency is “seeking to impose its power on all branches of the state and maintain parallel networks of decision-making.”
Mr Kabila has enjoyed the clear support of Western governments, regional allies such as South Africa and Angola, and mining groups that have signed multi-million dollar deals under his rule.

He received military training in China and fought alongside his father in a military campaign from the east that toppled dictator Mobutu Sese Seko in 1997 after more than 20 years of despotic, whimsical and corrupt rule.
In November 2016, Prime Minister Augustin Matata Ponyo and his cabinet resigned as part of an agreement Mr Kabila’s ruling coalition signed with the opposition to delay the presidential vote until 2018. Mr Kabila’s mandate had been due to expire in December 2016.
The government’s departure paves the way for a new cabinet with some posts for opposition figures who agreed to Mr Kabila staying on as president.

Economical Context:
The Central Bank of the Congo is responsible for developing and maintaining the Congolese franc, which serves as the primary form of currency in the Democratic Republic of the Congo. In 2007, The World Bank decided to grant the Democratic Republic of Congo up to $1.3 billion in assistance funds over the following three years. Kinshasa is currently negotiating membership in the Organization for the Harmonization of Business Law in Africa (OHADA).
The Democratic Republic of Congo is widely considered to be one of the world’s richest countries in natural resources; its untapped deposits of raw minerals are estimated to be worth more than US$24 trillion. The Congo has 70% of the world’s coltan, a third of its cobalt, more than 30% of its diamond reserves, and a tenth of its copper.
Despite such vast mineral wealth, the economy of the Democratic Republic of the Congo has declined drastically since the mid-1980s. The African country generated up to 70% of its export revenue from minerals in the 1970s and 1980s, and was particularly hit when resource prices deteriorated at that time. By 2005, 90% of the DRC’s revenues derived from its minerals (Exenberger and Hartmann 2007:10). The country’s woes mean that despite its potential its citizens are among the poorest people on earth. DR Congo consistently has the lowest, or nearly the lowest, nominal GDP per capita in the world. The DRC is also one of the twenty lowest-ranked countries on the Corruption Perception Index.

Social Context:
Despite an impressive economic growth rate and a reduction in the poverty rate from 71% in 2005 to 64% in 2012, the poverty rate remains high in the DRC. The country is among the poorest countries in the world and was ranked 176 out of 187 countries on the United Nations Human Development Index in 2015, and its per capita GDP, which stood at $442 in 2015, is among the lowest in the world. The United Nations estimates that there are some 2.3 million displaced persons and refugees in the country and 323,000 DRC nationals living in refugee camps outside the country. A humanitarian emergency persists in the more unstable parts of the DRC and sexual violence rates remain high.

Technological Context:
The dramatic rise in digital technology significantly increased demand for the minerals needed to create electronic devices. For the people of natural resource-rich Democratic Republic of Congo(DRC), this demand would fuel a decade-long war that would leave nearly six-million dead in what’s cited as the bloodiest conflict since World War II.
This site examines the relationship between the foundation of our digital world–the mined raw materials found in nearly all modern electronic gadgets–and the violence it has spurred in one of the world’s major mining regions, the DRC.
Environmental Context:
A dense tropical rainforest in the DRC’s central river basin and eastern highlands is bordered on the west by the Albertine Rift (the western branch of Africa’s Great Rift System). It includes several of Africa’s Great Lakes.
Major environmental issues DR Congo’s major environmental issues include:
• deforestation
• poaching, which threatens wildlife populations
• water pollution
Displaced refugees cause or are otherwise responsible for significant deforestation, soil erosion and wildlife poaching. Another significant issue is environmental damage from mining of minerals, especially diamonds, gold and coltan – a mineral used to manufacture capacitors.
Renewable energy: Because of sunlight, potential for solar development is very high in the DRC. There are already about 836 solar power systems in the DRC, with a total power of 83 kW, located in Équateur (167), Katanga (159), Nord-Kivu (170), the two Kasaï provinces (170), and Bas-Congo (170). Also, the 148 Caritas network system has a total power of 6.31 kW.

At the request of the government of the Democratic Republic of Congo (DR Congo), UNEP formally established a comprehensive environmental recovery programme in 2008, with a view to assessing the current state of the environment and natural resource management in the country. The UNEP programme, which will be implemented over two years, entails the delivery of a broad national-scale post-conflict environmental assessment (PCEA), as well as the development of a nationally-owned action plan and associated outputs, with the aim of supporting the sustainable development of the country.
The UNEP programme is set in the context of DR Congo’s recovery from conflict in the 1990s and onwards, and ongoing instability in the east of the country. The PCEA will evaluate the state of the environment and natural resource management in DR Congo, through a combination of extensive fieldwork, desk studies and remote sensing. As part of UNEP’s overall assistance to the government, a coherent, forward-looking national action plan will also be designed to address major environmental issues in the country.
In varying levels of detail, the recovery programme will address the following thematic areas: conflict and peacebuilding, population displacement, natural hazards, climate change, transboundary natural resource management, the impact of foreign aid and investment, urban areas, environmental health, forestry, agriculture, industry, oil and gas, mining, water, wildlife, and protected area management. Environmental governance will be both a cross-cutting theme and the subject of a dedicated study examining the country’s legislation, policies and institutional capacities.

Delivered from a newly established project office in Kinshasa, the environmental recovery programme in DR Congo is both a nationally-owned and a One UN process. Indeed, not only are several UN agencies supporting the delivery of the various programme components, but the national government, NGOs and local communities have been critical partners of the project from its inception.

Legal Context:
The DRC is a civil law country, and as such the main provisions of its private law can be ultimately traced back to the 1804 Napoleonic Civil Code. More specifically, the Congolese legal system is primarily based on Belgian law. The general characteristics of the Congolese legal system are like those of the Belgian legal system because the DRC received its law from the Belgian colonialists.

Customary law or tribal law is another basis of the legal system of the DRC, where 60% of the population lives in rural areas. Local customary laws regulate both personal status laws (like marriage and divorce laws) and property rights, particularly the inheritance and land tenure systems, in the various traditional communities of the country. Even though the Constitution subordinate customary laws to state laws, customary laws settle 75% of disputes in the Congo. Customary law’ does not refer to a body of rules merely stemming from usages and practices that have acquired over time the character of law. Rather, it refers to a general normative system enacted by legitimate law-making organs (i.e. patriarchs, family councils, clan councils, and traditional or tribal chiefs). That normative system is ‘customary’, not because it results from traditional customs, but because it finds expression in or through them. In other words, customary laws derive their authority from a legitimate law-making organ and exist independently of the individuals whose behaviour they regulate. This characteristic of customary laws implied that, unlike state laws, ethnographic studies, as opposed to the usual legal research methodologies, are necessary to ascertain the content of a given customary law. Another distinctive characteristic of customary laws is, they do not have general application as they only apply to the traditional communities from which they originate.

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