Before the colonization of Congo
The present territory of the Democratic Republic of the Congo is not defined before the Berlin Conference of 1885. This space remains however occupied by the natives who are organized in kingdoms and empires. The economic activity of these (gathering, fishing, hunting, etc.) differs considerably from that of the modern world. The material base is strongly dependent on nature. The Protocongolese socio-economic system then takes several forms depending on the region. The economy of the different kingdoms was flourishing, and collapsed together with the decline of political organizations under the effects of colonization, which led to the founding of the independent state of Congo
Leopold II of Belgium reigns over the independent state of Congo as if it were his private property. From 1885 to 1891, economic liberalism was in full swing. Private trade is encouraged and entirely free, as the state sees no problem. Given the need in which the young colony is in financial terms, especially in order to enhance the territory, a break in favor of interventionism is announced in 1892. But the Congo remains a playground where economic ideologies change frequently. From 1908 to 1914, liberalism came back in force. It is the end of the state-owned operation of Crown lands and the replacement of benefits in kind by the capitation tax. Reaction to the record of blistering criticisms of the abuse of direct exploitation and the use of forced labor by the independent state4.
Moreover, the DRC is already proving to be an investment-consuming machine, accounting for 6.5% of the total sums invested in Black Africa from 1870 to 1913, ie 610 million pounds.
The annual rate of exponential growth of 1920-1959, at constant price is high: 4.8% in total and 5.9% for the modern economy, excluding subsistence sector. A rapid pace, sustained by such a long period, seems really exceptional for economists6. However, we must not neglect major cyclical fluctuations during the inter-war period.
The first wave of prosperity of the Congolese economy (1920-1929) is marked by many foreign direct investments: 35 billion francs (1959) from 1921 to 1931, or 1/3 of total capital recorded in 74 years, from 1887 to 1959. In sharp increase, exports mainly concern gold, diamonds, copper, ivory, copal, and palm oil8.
In 1924, Congo was hit by the first crisis, partially offset by the copper industry. Five years later, he is affected by the Great Depression. GDP drops back to the 1925 level [ref. necessary]. Public expenditure remains relatively high, thanks in particular to a strong cash flow (previous budget surplus) and the extraordinary exceptional budget appropriation which makes it possible to complete the plan of major works.
From the 1940s until the eve of independence, the industry developed strongly, especially during World War II, as Europe could no longer supply the Congo. A second wave of prosperity then touches the country. Exports double and imports fivefold
After independence, import quotas strengthen the domestic industry. Between 1960 and 1970, economic history was marked by political problems (breakdown of political structures and administrative collapse) and problems of commodity prices. If colonization bequeathed to the new state a productive and equipped economy, growth does not follow. It had stopped since the end of 1957, caused mainly by cyclical recessions, a fall in private investment and massive capital flight. Congo begins its cycle of economic and geopolitical problems.
The Mobutu years
Because of the country’s great potential, corruption was established very early, under the Mobutu Sese Seko regime (1965-1997), with a seizure of power over the economy to divert profits from it. ‘a personal enrichment10. The disorganization of the country was such that in the early 1990s Zaire’s underground economy was estimated at three times the official amount of GDP.
The recent economic history of the DRC is marked by several attempts at reorganization and recovery of the economy. Faced with financial imbalances, rising indebtedness and stagnant production, the country was forced in the 1970s and 1980s to adopt the stabilization and structural adjustment policies recommended by the International Monetary Fund. (IMF) and the World Bank (1)
Despite the succession of economic plans financed by international institutions since the accession to independence, which support the Mobutu regime, “ally of the West” 3, inflation, the budget deficit and the country’s debt10, qualified by the continuation of “odious debt” 3, have only grown under the Mobutu regime. In the early 1990s, in the face of endemic corruption, the World Bank and the IMF came to suspend their aid, and most bilateral interventions were halted. The DRC was unable to meet debt repayment deadlines and IMF lines of credit were halted in February 1992, the World Bank’s in July 1993. Despite the introduction of a new currency, the new Zaire ( NZ), currency management remained uncontrolled, and inflation reached 9,800% in 1994, with prices in stores changing several times a day (2).
In May 1997, the AFDL, led by Laurent-Désiré Kabila, seized power and ousted the Mobutu regime after the First Congo War. Under Kabila, the government and state-owned enterprises began a reconstruction program and tried to clean up the situation3, while the DRC owed the Paris Club 7 billion euros3. The government began by reforming the corrupt tax system, the police force, and initiated the rehabilitation of the abandoned road network. The Congolese franc was reintroduced (3).
In August 1998, war broke out in the DRC following disagreements between Laurent-Désiré Kabila and his former allies in Rwanda and Uganda. At that time, some progress had been made in restoring the country’s economy, but the major problems of transport, customs and taxation infrastructure remained, however. The state’s public finances had not been cleaned up and relations with the IMF and the World Bank remained conflicting. Many government revenues were still not counted and not included in official statistics. Relations with the World Bank were suspended following the impossibility of finalizing an agreement with the Investment Fund of the International Bank for Reconstruction and Development (IBRD) for the Democratic Republic of Congo. The beginning of the second Congo war in August 1998 led to the decline of the economy, which continued until the mid-2000s. The territory was divided between a government zone and rebel zones. which put an end to trade between these areas. As a whole, trade relations between the different regions of the country are still weak today.
After a rebound in inflation in August 1998, the government began trying to regulate prices by laws. He also took over control of exports. Together, these measures greatly affected the continuation of foreign trade activities. Moreover, the limited successes of the fight against inflation and the depreciation of the currency were wiped out at the beginning of the rebel offensive in the east of the country. The war drastically reduced government revenues and increased foreign debt. Foreign trade actors were less present, due to uncertainties about the outcome of the conflict and increased control and fiscal pressure from the government. The large gap between the official rate and street rates for the sale of Congolese francs against US dollars forced traders to value their imported goods at the official rate to buy local currency.
Resources in the east of the country were now exploited by rebel forces or foreign occupiers. Rwanda, for example, became an exporter of diamonds and coltan, although not having it on its national territory.
Failing infrastructures, an uncertain legal framework, corruption, a lack of economic and financial openness on the part of the government, remain obstacles to investment and economic growth. The IMF and the World Bank13 are increasing collaboration with the new government to restore coherent economic plans, but institutional reforms are struggling to keep up. In the face of the depreciation of the currency, the government took drastic measures in January 1999: the US dollar was banned from current commercial transactions, a position that was later reviewed. The government still struggles to promote exports, although the printing of new notes has resumed. Economic growth was strongly negative in 2000 due to the difficulty of meeting the conditions set by institutional donors, low exports and prevailing instability.
Economic conditions have improved since the end of 2002, with the withdrawal of most occupation troops. Several IMF and World Bank missions have intervened to put development plans in place, and the transitional government has begun implementing the first reforms. A large part of the country’s economy, however, remains out of GDP indicators, with the underground economy still the majority. With relative peace in the country since 2003, the DRC plans to increase its electricity exports to Zimbabwe and South Africa up to 500 megawatts (mostly produced from the Inga dam). Electricity distribution is currently entrusted to a Zambian company, the CEC.
Mining production, which began more than a century ago, played an important role in the economic management of the Democratic Republic of Congo during the colonial era and after independence until the late 1980s. , the subsoil of the DRC is among the richest in the world in terms of geology and mineralogy. Given this natural advantage, the failure of the DRC’s economy is generally attributed to the “curse of natural resources”.
The DRC has deposits containing about fifty ores, but only a dozen of them are mined: copper, cobalt, silver, uranium (by Areva), lead, zinc, cadmium, diamond, gold, tin, tungsten, manganese and some rare metals like coltan. The Democratic Republic of Congo also extracts diamonds from its subsoil. The reserves are very important, so the country has the second largest copper reserve with 10% of the total recorded on the planet and especially the largest reserves of cobalt (nearly 50%). Export earnings in 1990 reached about US $ 1 billion14.
The DRC is the fourth largest diamond producer (a quarter of the world’s reserves) during the 1980s [ref. and this activity still constitutes the majority of exports (USD 717 million, or 52% of exports in 1997 [ref. The main copper and cobalt mines (one-third of the world’s reserves) are governed by a public company, Gécamines (former mining union of Upper Katanga). Gécamines’ production continued to decline in the 2000s, due to the sluggishness of the copper market.
The restructuring and liberalization of the mining sector since 2004 throughout the national territory have given nothing16, especially since the expropriation of peasant land has been witnessed in favor of new mining concessions, widespread fraud and leonine contracts. A commission of national experts on the initiative of the government, with the support of specialized international services, was set up to investigate the various contracts signed with the multinationals, and concluded that the State had been sold off and plundered with the complicity of higher authorities [ref. necessary]. Mining contracts have been revised, with Kinshasa particularly seeking to increase the state’s stake in Tenke Fungurume, an American firm operating in Katanga.
2007 Agreement with China
After a trip to Beijing by infrastructure minister Pierre Lumbi in the summer of 20073, China announced in September 2007 a credit agreement on $ 8.8 billion [ref. necessary], with the primary objective of resuscitating the mining sector. In return for the exploitation of mining resources (copper, cobalt and gold3), China undertakes to build the country’s infrastructure (roads, optical link to the West Africa Cable System, 3 hospitals, universities, housing, etc.). The barter agreement provides for € 6.3 billion of investment3, of which 4.2 is for infrastructure development and 2.1 for the revival of the mining sector3, the contracting authority being the responsibility of a joint-venture company, Sicomines, of which the DRC will hold 32% of the shares3. The construction sites are entrusted to China Railway Engineering Corporation and Sinohydro Corporation3. The IMF has criticized the Chinese commitment, officially seeing an increase in the public debt17. Countries such as France and Belgium have a negative view of China’s presence, fearing that commodities will change hands3. Faced with these criticisms and following the visit of the President of the IMF, Dominique Strauss-Kahn, in May 2009 in Kinshasa3, the Chinese have partially retreated (Aéroports de Paris will thus renovate the N’Djili airport which serves Kinshasa, while Areva is entrusted with the prospection and exploitation of uranium3).
The rich hydrography of the DRC gives it a hydroelectric potential estimated at 100,000 MW, or 13% of the global hydropower potential. The total installed capacity is currently estimated at 2,516 MW, or 2.5% of the total potential for a possible average generation of 14,500 GWh. Actual production is currently only 6,000 to 7,000 GWh. Hydropower accounts for 96 percent of electricity generation, with the remaining 4 percent being supplied by low-power thermal power plants, most of which are located in remote areas. Inga dams on the Congo River are the main source of hydropower generation. This group now comprises two power plants with a total capacity of 1,775 MW: Inga I with 6 groups totaling 351 MW, Inga II with its eight groups totaling 1,424 MW) 18. In its final state, the Inga complex would provide more than 25% of the world’s hydroelectric power generation.
The potential contribution of the Inga plants is obsolete, their production does not exceed 40% of their capacity. Much of this production is for export, leaving local demand unmet. This situation means that the population’s access rate to electricity is 1% in rural areas, 30% for cities and 6% nationally, whereas the average in Sub-Saharan Africa is 24.6%) 18. For several years, the project of a Grand Inga was considered, it is a dam that would use all the power of the Congo River. As part of the Nepad, the Inga site was selected for a network interconnection project across Africa and even Europe was thought19. Another project, the Western Power Corridor (WESTCOR) on the same site, this time for the subregional integration of the SADC zone for the production and transport of electric power, exists. This project could generate $ 5 billion each year – once fully equipped – at today’s rate20.
In addition to its mineral wealth, the DRC has many other advantages to make. It is the first country in Africa in terms of the extent of its forests (half of the national territory is occupied by the equatorial forest) and the most important for the preservation of the global environment. It is from 2007, really, that the Congo Basin is more and more the center of the concern of the whole world.
The DRC ranks among the 10 mega-biodiversity countries in the world with 480 mammal species, 565 bird species, 1,000 fish species, 350 reptile species, 220 amphibian species and more than 10,000 angiosperms including 3,000 would be endemic. It has an exceptional natural fauna (we find all the great animals of Africa) and has rare species. All this capital has not been spared by the various conflicts and their devastating effects on the fauna and flora. Thousands of hectares of forest are degraded, leading to a decrease in biodiversity. Protected areas are subject to spoliation, smuggling and poaching14; the pressure of hunting and poaching has been very strong on some species (such as the hippopotamus, hunted for ivory from its defences following the embargo on elephant ivory) in recent years.
The DRC, blessed by nature, is also a land of tourism; few places in the world equal the beauty of the territories of the north-east of this country, its lakes on the borders of the Nile. Half of the country is made up of savannah, one of the most varied habitats of all Africa. But tourism has never been highlighted, quite the opposite of the countries of Eastern Africa and Southern Africa. Recently, the Federation of Enterprises of Congo (FEC) and the Ministry of Supervision have shown a weak inclination to revive this sector. The latter is hindered by several reasons: destruction and insufficiency of socio-economic infrastructures, physical insecurity in certain parts of the country, absence of a framework law in the field of tourism24.
The transport network consists of 16,238 km of waterways, 5,033 km of railways, most of which date back to the colonial era, 145,000 km of national and regional roads, and rural secondary roads. 400 km of urban axes and 270 airports across the country, including 5 international airports (Kinshasa, Lubumbashi, Kisangani, Goma and Gbadolite).
DR Congo is a semi-landlocked country because in addition to the low density of its communication networks (0.074 km of communication routes per km²), it has only one coastline, on the Atlantic Ocean from 37 km. For a country as vast (2,345,000 km²), infrastructure plays a major role. The situation of the transport system in the Democratic Republic of the Congo is disastrous. The reality of the situation is reflected in the total inadequacy of the supply of transport services, accentuated by the poor state of transport infrastructure and the chronic lack of satisfaction of demand.
Livestock, whose potential capacity varies between 30 and 40 million cattle with a livestock load of 1/6 to 1/12 throughout the year, is not yet the government’s priority18. It is poorly developed in the Democratic Republic of the Congo, partly because of natural conditions that are not conducive to raising livestock, over a large part of the territory. The dense forest has no pastures, and trypanosomiasis, carried by the tsetse fly, is endemic in most of the lower parts of the country. The mountainous regions of the east and south-east (Kivu) are, on the other hand, conducive to breeding. Livestock are believed to have been introduced by Tutsi populations from neighboring countries. This breeding is practiced by populations of specialized pastoralists or by a few rare modern ranches. Breeding techniques.