Despite its geographical proximity to the Democratic Republic of Congo (DRC), the East African Community (EAC) Partner states are hardly sources of the country’s imports thus losing a significantly huge market for products whose supply the region once dominated.
EAC’s trade with the DRC is surprisingly very low. In fact, the combined exports of all the EAC partner states into the DRC, does not match that of South-Africa. Over the last 7 years, the proportion of EAC exports to the DRC has averaged 13.5%.
This was revealed by a recent study that focused on three main product clusters. In 2019, the DRC imported prepared foodstuffs worth $ 514.2 million, of which 33.3% was supplied by Zambia, which does not enjoy any geographical advantage over EAC states. DRC mainly sourced non-alcoholic beverages worth $ 55.2 million, raw cane sugar valued $ 49.2 million, and food preparation and sweet biscuits raking in $ 37.3 million and $ 31 million, respectively.
This study titled “The opportunities for trade in the Democratic Republic of Congo; A Perspective from East Africa” by Dr. Aaron Ecel, of International Business at Makerere university also focused on textiles.
DRC imported textile products worth $ 235.7 million in 2019, of which 54.6% – worth $ 128.9 million was supplied by China. In this category, the most sought- after items were; worn clothing and accessories valued at $ 37.2 million, plain woven fabrics of cotton worth $23.9 million; woven fabrics of yarn valued at $ 9.6 million and men’s or boy’s trousers, which stood at $ 7.9 million.
In the plastics and rubber cluster, the 2019 market was worth $ 284.9 million and $ 85 million respectively. Polypropylene at $ 27 million and Acrylic polymers valued at $24.5 million were the most-sought after plastics, while new Pneumatic tyres-the kind used on construction and mining worth $27 million were consumed while new Pneumatic tyres used for buses and lorries worth $12.9 million was ordered.
In 2019, articles of leather worth $ 24 million were imported into the DRC and $ 21.9 million were supplied by China. The most sought-after categories were; trunks, suitcases worth $ 14.2 million and handbags worth$4 million ordered.
Non-tariff barriers are partly to blame for this poor state of EAC trade between Congo – the ‘giant of Africa’ with a potential market of appx. 81 million consumers, nearly half of the EAC population, with its neighbours in the east. The most common being delays at the border posts arising from; unreasonable packaging and labelling requirements, incidences of ambiguous product classification and requests for additional trade documents. Extortion and un-receipted road blocks are also a common occurrence, the study observes.
“Due to infrastructural limitations, most of the EAC exports have been destined for the eastern region of the DRC. This presents a limitation since the data used in this study was representative of the entire DRC. However, the fact that Zambia which borders the DRC to the South East is the 3rd largest supplier of DRC’s imports ($866.1 million in 2019), this limitation is not a significant handicap to the EAC traders,” the study adds.
DRC sourced 31.2% of its imports from China. South Africa and Zambia supplied 13% while Belgium and India 5.4% and India 5.3% respectively. The study shows that the DRC’s imports from China grew by 14% in the period 2015-2019. With the exception of trade with China, Italy, Thailand, Brazil, Korea and Spain, the DRC experienced a negative trade balance with most of the other major suppliers of imports into the DRC.
In its conclusion, the study found out that the DRC presents an opportunity for increased sales and subsequent business growth for many Small and Medium Enterprises in the EAC. The findings in the report revealed that 47 % of the DRC’s imports are dominated by two supplying markets-China and South Africa- and that the country is sourcing most of what the EAC can ably supply from very distant markets.
“Given its geographic and even psychic proximity, the EAC is better placed to supply most of that the DRC imports. The findings reveal that trade flows from the EAC into the DRC are declining, with the exception of exports from Rwanda and Uganda,” the report said.
As a nation with the highest import and export transaction costs in Africa, doing business in the DRC requires additional dexterity compared to most regional markets, and therefore operational and strategic readiness ought to account for the several hurdles (NTBs) between the SMEs and the insatiable opportunities in the DRC.
SMEs in Kenya processed foodstuffs can focus on the DRC market for food preparations, Sauces- excluding soya, active Yeasts, protein concentrates, prepared baking powders and tomato ketchup & other tomato sauces. The region should rival these markets from Belgium, South-Africa, China and France. Other areas with huge potential for Kenya include raw sugar and chewing gum.
For Ugandan SMEs focus should be on sweet biscuits, food preparation for infant use and saugages, which are mainly supplied by Zambia.
Tanzania was once a significant supplier of preparations of vegetables, fruits and nuts to the DRC, which has since recorded a decline. SMEs in this business space ought to explore products areas such as tomatoes, preserved otherwise than by vinegar or acetic acid and mixtures of fruit juices.
Rwanda and Burundi have comparative advantages of supplying sugar confectionery not containing cocoa-excluding chewing gum, chewing gum, sweet biscuits and food preparation for infant use.