What you need to know:
Double exports. Trade in Eastern Africa is set for a boost with the Democratic Republic of Congo joining the East African Community. The admission of the DRC into the EAC, with a population of about 100 million people, will enable Uganda to double her exports from 5.2 billion in 2019 before Covid-19 to around 12 billion
Chicken from Brazil. Packaged bottled water from the US. Beer from France and cooking oil from Belgium.This is the situation on the supermarket shelves in the Democratic Republic of Congo (DRC).
Here is an opportunity for Ugandan Small and Medium Size Enterprises(SMEs) to supply goods to the neighbouring Congo.
The DRC economy is begging for regional trade in East Africa, with Uganda being the most advantaged, given its proximity.
According to a survey conducted by Prosper magazine in the DRC, it did not take too long to establish that 90 percent of what is on their supermarket shelves are imports from all over the world except Africa and curiously East Africa, which by virtue of its proximity should have taken that space.
The aforementioned statistic was corroborated by the SMEs sector players in Congo.This was during the Uganda DR-Congo Business Summit fact finding mission, where it emerged that DRC is a virgin economy and efforts are in place to wrestle that huge untapped market from foreign imports.
During the summit, Mr Stephen Asiimwe, the chief executive officer for Private Sector Foundation Uganda (PSFU), said the Ugandan delegation of 200 people, visited DRC to market Ugandan products, to engage with business people in Congo, and to buy or sell goods and services.
He explained that they have spent considerable time engaging both the private sector and the government in the DR-Congo, because Ugandans want to do business with DR-Congo.
According to him they engaged the Congo government specifically for its assurance about a conducive environment that will facilitate trade and investment between both nations.
“We traveled with a contingent of people from manufacturing, from trade, services, agriculture, ICT, construction, engineering and people from professional services.We are looking at how we can get our goods to Congo. It has two path routes, there is the west DRC which is Kinshasa and the eastern DRC is where the bulk of trade and investment is taking place,” Mr Asiimwe says.
He asserts that most of the trade is taking place in the north and south Kivu Province in Congo which places are closer to West Nile and Bunyoro regions in Uganda.That is why a lot of transport, especially ground transport, trucks, buses and slightly heavy vehicles from Uganda are going to the DRC where business is being conducted.
He says in Kinshasa the DR- Congo capital city, traders have to take several air flights because there is no road network. So business people are looking at getting cargo into Kinshasa, establishing warehouses and cold storage rooms for especially fruits, vegetables, chicken and meat.
Goma city in DRC,which is closer to Uganda, is the hub of business. During the summit, there were discussions with the governor, mayor and private sector in Congo to show that once the roads are fixed, alot of Ugandan products should be going there.
“Research has shown that five cargo planes leave Goma for Kinshasa and Lubumbashi with food and this is something Uganda can supply on a daily basis. DRC has a population of about 100 million people and it is growing,” Mr Asiimwe said.
The population around Kinshasa is about 18 millon people. “Once Kabale airport in Hoima district is completed, it will be much closer towards some of the most established cities like Lubumbashi, Kisangani,Kinshasa, Goma and Bukavu. All these are a consumer society and provide a great opportunity for traders.”
Other than that, he says Uganda will establish warehouses and points of contact especially in Kinshasa and Goma. It is also important to establish a collection centre for cold storage and the non-cold storage areas, which will take the bulk exports.
He adds that sector players from Uganda are discussing with the government of Congo and the business people, to create means through which goods from Uganda can reach a particular place, so that business people can access a variety of merchandise.
“Uganda is largely an agricultural country. We hope and believe we can get good clean, reliable and sustainable commodities that can be picked up from the collection centres,” Mr Asiimwe said.
Despite the abundant opportunities in DR-Congo, there are other teething issues that deserve attention.
For instance, the use of foreign currency such as the US dollar bills for trade in DRC. The masses go as far as damaging the dollar bills by marking them, to forcibly retain them in their economy.
The transformation of the DR - Congo into a dollar economy according to economic analysts and sector players, poses limitations on potential investors, which limitation is bound to increase the cost of doing business.
According to Mr Odrek Rwabwogo, the senior presidential advisor special duties, some of them who trade in the region have watched the competitiveness of the economy often go down.
When you look at the losses of the past years in Africa alone in terms of currency exchange, Africa loses about $5b annually in currency exchange.You are selling to francophone but you are using dollars which you have to change to francs and then you are importing technology from UK.
Explaining that they have been worried about increasing the balance sheets for the country as well as for their businesses.
“We thought about cleaning the system by revising the laws on exports, fatal problems which were facing the world market, archaic laws of 1964, which are still on our statute books,” Mr Rwabwogo said.
“If the above is cleared, we could double our exports from 5.2 billion where corona left us in 2019 to around 12 billion. Goma city alone in DR-Congo total export is about 12 billion, which we want in seven to eight years. For them it is what they make every year. But 96 per cent of that is in minerals and other things so we are more diversified,” Mr Rwabwogo said.
“Let’s focus on Congo, this is the future of Uganda and Africa.When you stabilise trade, you could unite Africa faster rather than fighting wars in Mali or Somalia. All you could ever want in prosperity is here. But we lack coordination,” he says.
Mr Rwabwogo said, for the first time the government and private sector in Uganda have met the DRC government and its private sector.They resolved three things which include;
All partners they interacted with in DRC will meet in Kampala then they will be hosted at the border to inspect the facilities together and assess their capacity to support trade for the two countries.
Secondly, if both nations do that assessment, they will select areas Beni, Goma and Kinshasa in the Congo where to build warehouses and cold rooms, so that there is a point of contact between Uganda and Congo.
He says they also agreed to create partnerships between Uganda and Congolese companies.
“I am not happy when I hear government officials say that last year we sold $600m worth of exports in Congo.Trade is two way. I only benefit when the imbalance is not so lopsided against me.To remove the imbalance, there are serious companies we have asked to rebuild technology, market and distribution to build a capital base that will supply both Congo and Uganda,” Mr Rwabwogo says.
He noted that the best raw materials are timber, dairy, beef and coffee are found on the 700 Km borderline of Uganda and Congo. It is important to process these raw materials in Uganda where their cost is cheaper even though infrastructure and electricity are costly, but in the end, both nations shall retain jobs for young people.
During the business summitMr Spencer Birungi, a senior immigration officer, said he had an opportunity together with his colleagues, to listen to the issues of Uganda’s business community.
The issue of visas, multiple documents, harassment as a limitation to travel to DR- Congo to conduct business topped the list.
“We have already compressed this into an MoU, and our promise and resolve still remains that we shall legally facilitate the movement of people to do their business smoothly as they cross the borders. Both land, air and water border points,” Mr Birungi said.
Ms Grace Katima, a lawyer at CITADEL Advocates, said the Uganda - DR-Congo summit has opened trade doors for Ugandans before urging them to take advantage of it.
She said there are many opportunities for the legal services because traders need advice on cross border investment.
Mr Vincent Ondiff, the general manager of Fintech Transformative Technology, said in DR - Congo, he has seen opportunities in terms of demand and the need for technology development.
He says Uganda has abundant resources capable of building platforms and systems. Uganda seems to be ahead in terms of IT and automation processes.
“That is what we can replicate in Kinshasa as well.This is a city of over 18 million people. You can imagine walking into a bank and some are still operating on a manual system rarely having automated processes,” Ondiff said.
Mr Abel Nduuru, the manager for technology and business incubation at the Presidential Initiative on Banana Industrial development, says majority of the Congolese that they interacted with are excited about buying green plantains flour.
He said the majority of the people were asking about how they process it and whether they can have a company that processes similar flour in Congo. Others need technical support on value addition.