Democratic Republic of the Congo Economy Facts
With its vast natural riches of especially minerals, Congo-Kinshasa could be one of the most prosperous countries in the world. In addition, there are huge assets on water and forest. But the country has long been characterized by economic devastation, neglect and armed conflicts. Congo is today one of the world’s most deprived states. However, increased demand for minerals has boosted growth, even though it has leveled off in recent years due to world market prices falling.
For the most part, Congo-Kinshasa’s economy is based on agriculture, but the colonial era’s large commercial crops have almost disappeared. Most of the population is outside the formal economy and live on what they can grow themselves. In the conflict-affected areas, hundreds of thousands of people have been driven away from their homes and forced to survive on aid.
- Countryaah.com: Major imports by Democratic Republic of the Congo, covering a full list of top products imported by the country and trade value for each product category.
Much of the other economic activity goes on in the cloud, without accounting or taxation, without transparency and not infrequently illegal. This applies not least to lucrative mining. A large part of the minerals are extracted in areas and by groups that the state power does not control. The situation has improved somewhat since the end of the war in 2003 (see Modern History), but the state is still losing out on great wealth. Since 2005, several initiatives have been taken in the outside world to regulate trade. Among other things, attempts are made to trace the origin of the minerals to prevent trade in “conflict minerals” and “blood diamonds”. One problem, however, is that even high-ranking representatives of the authorities and the military are often involved in the illegal handling (see also Natural Resources and Energy).
At the time of independence, Congo was the second most industrialized country on the continent, after South Africa. However, the failure of the national government and corruption, as well as the dictator Mobutu Sese Seko’s looting of the country (see Modern History), gradually contributed to an economic collapse. At the beginning of the 1990s, payments on foreign debt were set at over US $ 10 billion. According to recent estimates, Mobutu itself had embezzled around $ 5 billion from the Treasury. During the 1990s, GDP fell on average by just over 6 percent per year.
- Abbreviationfinder.org: Check this abbreviation website to find three letter ISO codes for all countries in the world, including DRC which represents the country of Democratic Republic of the Congo. Check findjobdescriptions to learn more about Democratic Republic of the Congo.
Despite the neglect, the influx of foreign aid continued for decades, including from the World Bank and the International Monetary Fund (IMF). One reason was that the US saw Mobutu as an important ally against communism in Africa. The aid was withdrawn in the early 1990s, when the Cold War had ended and Mobutu’s eccentric personal cult began to appear troublesome in the western world. The World Bank declared the then Zaire bankruptcy in 1994. The political turmoil in the 1990s also frightened many foreign experts and prevented foreign companies from investing in the country. The corruption made sustainable business impossible. The riots and looting contributed to the collapse of the economy.
In the early 2000s, donors returned after a peace agreement was concluded and then-President Joseph Kabila had initiated economic reforms. Among other things, a liberalization of the mining industry was carried out. Some described it as a sale of national assets: in 2004-2005, 75 percent of copper assets were sold to foreign interests.
In addition to the World Bank, the EU, Belgium and France are among the most important donors.
China’s ever-stronger presence and large commodity famines have caused concern among Western countries. In February 2009, it became clear that Congo-Kinshasa would receive a $ 200 million crisis loan from Western donors. The clear sign of the loan was given despite the fact that many of these donor countries opposed an agreement between Congo-Kinshasa and China that would give Chinese mining rights in exchange for infrastructure investments worth $ 9 billion. Chinese companies promised, among other things, to build roads, railways and hospitals to share copper and cobalt deposits. Objections from the IMF in November of the same year prompted a revision of the settlement with the Chinese, which meant it was cut to $ 6 billion. The IMF and Western donors would instead ease Congo-Kinshasa’s debt burden.
In 2010, Congo also received clarification from the World Bank and the IMF on a debt cancellation program under the Heavily Indebted Poor Countries (HIPC) Initiative. Congo-Kinshasa was considered to have fulfilled the conditions through efforts to reduce corruption and increase transparency in the mining and oil sectors. Later in the year, Congo also got clear with a debt write-off of the so-called Paris Club (an informal association of 19 rich countries) and Brazil.
The vast natural resources continue to attract foreign companies. But new struggles in 2011–2013 reminded us of the uncertain situation. The legitimacy of the government appears to many to be questionable. Congo is in the bottom tier of the world’s countries when the World Bank ranks investors’ risks (see Democracy and Rights).
Previously long periods of high inflation have led to a dollarization of the economy. US Dollars are the only currency in demand in all contexts except in ordinary, everyday trading. However, inflation has fallen to just over 1 percent. Growth was around 7 percent in 2010-2013 and was up 9 percent in 2014. Subsequently, growth slowed down, much as a result of low world market prices for minerals. But even though GDP has continued to grow, people are not getting much better, as the population is growing at almost the same rate as the economy.
FACTS – FINANCE
GDP per person
US $ 562 (2018)
US $ 47 228 million (2018)
5.8 percent (2018)
Agriculture’s share of GDP
19.1 percent (2018)
Manufacturing industry’s share of GDP
18.1 percent (2018)
The service sector’s share of GDP
32.7 percent (2018)
5.5 percent (2019)
Government debt’s share of GDP
15.3 percent (2018)
US $ 5 128 million (2017)
US $ 15 967 million (2018)
US $ 14 973 million (2018)
– US $ 2,169 million (2018)
Commodity trade’s share of GDP
30 percent (2018)
Main export goods
diamonds, gold, copper, cobalt, wood, crude oil, coffee
Largest trading partner
China, South Africa, Belgium, USA
Hundreds of dead in LRA massacres
The LRA guerrillas are massacring hundreds of civilians in villages in the Haut-Uélé province in the northeast.
UN force is criticized
UN force Monuc receives criticism from human rights organizations for not sufficiently protecting the civilian population during the army’s offensive against the Hutu militia FDLR. Sexual violence was even more brutal than before in the areas where the offensive took place.
The situation in the east is getting worse
360,000 people in Orientale province are reported to have escaped attacks from the Ugandan LRA guerrilla since the beginning of the year.
Violence is increasing in Nordkivu
The violence between the FDLR hutumilis and the army is increasing in Nordkivu.
New peace agreement
The government and the CNDP conclude a peace agreement, which means that the CNDP will be transformed into a political party, the former rebels will be granted amnesty and former rebels will be included in the national army and a new police force. The agreement will also allow hundreds of thousands of refugees to return home.
Rwandan troops leave
The Rwandan troops begin to leave Congo-Kinshasa. Hutumilisen FDLR is rapidly recovering lost land and over 30,000 civilians are fleeing.
Nkunda is arrested in Rwanda
Several thousand Rwandan government soldiers enter Congo-Kinshasa to fight the FDLR, according to an agreement with the Congolese government. Two days later, CNDP leader Laurent Nkunda (see August 2007) is arrested in Rwanda.