The Democratic Republic of the Congo

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The Democratic Republic of the Congo
Opportunities for US Companies
Presented by The Economic/Commercial Section US
Embassy Kinshasa
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DRC Country Profile

• Nine International Borders Angola, Burundi,
  Central African Republic, Republic of Congo,
  Rwanda, Sudan, Tanzania, Uganda, Zambia.
• Area 2.345 sq. km. (905,063 sq. mi. about the
  size of the U.S. east of the Mississippi).
• Population 66 million (2008 est.)
• Government In 2006, the DRC held its first
  free, democratic, multi-party elections in more
  than 40 years.
• ? President Joseph Kabila
• ? Prime Minister Adolphe Muzito
• ? 37 Ministries

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DRC Economic Snapshot

• Nominal GDP (2007) 10.5 billion
• Real GDP Growth
• 2006- 5.6 2007- 6.3 2008- 8 (estimate)
  
• 2009- 4.4 (projected)
• GDP Per Capita 170 (2007)
• Impact of Global Financial Crisis
• 2009 Projected GDP lowered by half
• Contraction of the Mining Sector
• Lowest International Reserves Levels in 5
  years
• Volatile Exchange Rate
• Regional Economic Memberships
• SADC COMESA CEEAC CEPGL

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DRC Trade Snapshot

• Leading DRC ExportsTotal 6.1 billion (2007)
• ? Mining over 95 (Diamonds, Gold, Copper,
  Cobalt)
• ? Other Exports Wood products, Agricultural,
  Industry
• Leading DRC ImportsTotal 5.2 billion (2007)
• ? Machinery 62.73
• ? Agricultural and consumer products 20.48
• ? Energy 12.70
• Leading Trade Partners
• Exports - Belgium, China, US, Finland,
• Brazil, US, France, Zambia
• Imports - South Africa, Belgium, Zambia,
  Zimbabwe,
• France, Kenya, US, Cote
  d'Ivoire

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US-DRC Commercial Relations
DRC Total Trade with the United States 319 mil.
(2007) Merchandise Exports to the U.S. 206
mil. (2007) Non-Metallic Mineral
Manufactures, Misc. Manufactured Goods, Cork and
Wood, Non- Ferrous
Metals Imports from the U.S. 113 mil. (2007)
Meat and Meat Preparations, Cereals and
Cereal Preparations, Specialized Machinery,
Transport Equipment, Telecommunications
Equipment U.S. Preference Programs AGOA
(not eligible under Apparel Provision) GSP U.S.
FDI Stock in DRC (2006) 65 million AND GROWING
Approximately 1 billion in US FDI in 2008
in the mining sector alone Leading U.S
.Companies in the DRC Coca-Cola, Price
Waterhouse, Freeport McMoRan, DHL Express,
Caterpillar (Tractafric), Seaboard, Deloitte
Touche, KPMG, Chevron, MIMINCO, and Citigroup,
among others Bilateral Investment Treaty (Signed
August 3, 1984 Entered into Force July 28, 1989)

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Openness to Foreign Trade and Investment

• Since 2001, the GDRC has undertaken economic
  reforms aimed at stabilizing the macroeconomic
  environment and promoting economic growth.
• Investment code Law n004/2002 of February 21,
  2002-
• Creation of ANAPI, one-stop shop for
  investors equal
• treatment of investors, national and
  foreign important
• guarantees for investors liberalization of
  key sectors
• (oil, mining)
• Other legal frameworks
• Mining code forest code labor laws commercial
  courts.
• The DRC does not have any specific barriers to
  U.S. trade or investment.

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Market Opportunities

• Rich endowment of natural resources, large
  population size, generally open trading system,
  and re-engagement with donors reflect key
  opportunities for US companies.
• Energy
• ? Extensive potential hydroelectric capacity
  estimated at 100,000 MW.
• ? Congo River possesses the most powerful and
  most regular flow in the world (50,000 cubic
  meters/second) after the Amazon.
• ? Opening of sector to joint ventures Inga I/ II
  hydroelectric turbine rehabilitation.
• Mining
• ? Dominates formal economy--minerals account for
  the vast majority of the DRCs exports and
  represent the single largest source for foreign
  direct investment (FDI), including from the
  United States.
• ? Key products copper, cobalt, gold, coltan,
  tin, diamonds and zinc.

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Market Opportunities (Continued)
Agriculture ? Over 120 million HA of arable and
fertile land. ? Agriculture remains the mainstay
of the Congolese economy, accounting for
45.7 of GDP in 2006. ? Main cash crops include
coffee, palm oil, rubber, cotton, sugar, tea, and
cocoa. ? Food crops include cassava, plantains,
maize, groundnuts, and rice. Timber Sector ?
Second largest tropical forest in the world ?
Highly valued species ? Efforts to promote
effective stewardship of environmental resources
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Market Challenges
DRC remains a highly challenging environment in
which to do business. Ranked last on the World
Banks Doing Business report for the past two
years. Key Constraints ? Underdeveloped
infrastructure ? Inadequate contract
enforcement ? Limited access to credit ?
Continued insecurity in eastern DRC ? Poor
property rights protection ? Bureaucracy ?
Lack of adequate judicial system ? Inconsistent
application of commercial laws ?
Inefficient and burdensome tax and customs
administrations And, of course, CORRUPTION
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Key Commercial Contacts

• U.S. Embassy Kinshasa Economic/
• Commercial Section
• National Agency for the Investment
• Promotion (ANAPI)
• Congolese Chamber of Commerce (Fédération des
  Entreprises du Congo, FEC)