Kenya and DR Congo on Friday signed a bilateral agreement on cooperation in agriculture, livestock and fisheries sectors. This was immediately after the vast mineral rich new EAC member signed the treaty of accession into the regional bloc.
The objectives of the agreement include promoting increased agricultural productivity in Kenya and DR Congo, encouraging joint investment ventures between respective private entrepreneurs as well as boosting mutually beneficial trade between the two countries.
Although Kenya is not an immediate neighbour of the DRC, the coastal country has in the past years invested heavily in the DRC. A growing list of Kenyan companies are looking for investment opportunities in the Democratic Republic of Congo (DRC) shifting focus from immediate neighbours.
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Firms with an eye on the country include insurer, Jubilee Holdings which has applied for a licence to set up a composite underwriting business as a strategy to boost its earnings.
Others are Equity Group which pointed to the strategic importance of its DRC’s subsidiaries to its future growth and KCB, which last year kicked off a plan to enter the country through acquisition of an existing lender.
DR Congo has 19 licensed banks of which five are local, four pan-African and nine foreign while bank penetration still remains low at around six per cent placing the country among the most underbanked nations in the world.
Of an estimated 65% of the population that saves, only 4.7% do so through a bank providing a huge opportunity for foreign banks.
According to Equity Group, the DRC has the most robust regional interconnectivity in the region making it favourable for cross border trade. It has 11 major economic transport corridors that facilitate trade flows in the region while connecting with Central Africa, Southern Africa, and a part of East Africa.
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According to Verdant Capital, a pan-African investment advisory firm there is a significant untapped potential for DRC given its 85 million potential consumers, mineral resources, fertile agricultural land and potential for political renewal.
EAC secretary general Peter Mathuki that with its population, DRC will offer a huge market for the community, thus making the region economically competitive in the world.
“In 2018, for instance, the value of imported goods into the DRC stood at $7.4bn. From this, the value of EAC exports to the DRC stood at $855.4m only, which represents just 11.5% of DRC imports. Consumables imports is about 31%, I’d even say from China, and South Africa, which is about 16%, while Zambia takes 15%” Mathuki said.
With DRC coming on board, the secretary general said the 11% is likely to multiply by four times to up to 50%.
According to the Africa Development Bank, the DRC’s real GDP was expected to grow by 3.3% in 2021 and 4.5% in 2022 — despite Covid-19 shocks — driven by higher prices for major mining products, such as copper, and recovery in both consumption and investment.
