Sunday, April 14News That Matters

Why DR Congo is Worth Investing in?

The willingness of the Government of Uganda and President Museveni in particular to construct roads and other infrastructures to DR Congo shows the zeal by Government to transform these political relations into economic gains.

Uganda can enjoy a trade surplus even without digging deep into its vast natural resources.

Uganda has limitless potential for exporting an array of locally produced products and services — from horticulture to construction and engineering.

Uganda is home to some top-quality products that can compete in any market around the world. This is fact!

The major drawback affecting exports has been the failure by local companies to aggressively capture regional markets and leveraging on the country’s geographical location, which comes with few logistical headaches.

For small businesses, regional markets offer a more viable option to increase exports.

With Uganda being a land-locked country, there is a need for local companies to diversify their markets and take advantage of the opportunities that arise in neighbouring countries.

The Democratic Republic of Congo (DRC) is one such market, offering lucrative opportunities for Ugandan companies across all sectors such as mining, agriculture, services and more.

DRC is one of the largest countries by land mass in Africa, with a population five times the size of Zimbabwe.

This population is an indication of a huge consumer base that could provide opportunities for Ugands’ manufacturers and farmers.

The country is predominantly rich in mineral resources and relies on imports of goods and services for its huge population.

With regards to trade, figures available on Trade Map show that DRC imported products worth US$6,67 billion in 2019.

This was dominated by machinery, mechanical appliances (US$1,1 billion), electrical machinery and equipment (US$615 million), and pharmaceutical products (US$471 million).

Other top products imported last year were vehicles and parts, articles of iron or steel, plastics and inorganic chemicals, salt, sulphur, earths, stone, plastering materials, lime, and cement.

Currently, the top exporting countries to DRC are China, South Africa, Zambia, Belgium, India, Netherlands, Namibia and France.

Uganda’s exports to DRC are currently very low, and last year, they were largely dominated by plastics and articles of plastics, according to Trade Map.

However, there is room to increase trade to DRC by diversifying exports and targeting high demand products.

Mining sector opportunities

Contrary to popular belief about the risks associated with exporting to the DRC market, there is invaluable potential in that market, in particular, the Katanga province, Kivu Province where we conducted a market survey and identified vast opportunities in the mining sector.

DRC produces more than 3 percent of the world’s copper and half its cobalt — most of which comes from Katanga region.

Moreover, the mining sector in the Katanga region is composed of both large-scale mining firms and the small artisanal mining operations.

This presents a good opportunity for Ugandan exporters of mining consumables, engineering and safety solutions to do business with both small and large-scale miners in the Katanga region.

Some buyers in the DRC mining sector have indicated an appetite for Uganda-produced mining supplies such as protective clothing.

Some of the other demand driven products in mining supplies include mining consumables such as rollers, belts, crushers and valves among others.

Agriculture, processed foods opportunities

Over the past few years, the DRC government has been moving towards modernising the country’s agriculture sector, creating opportunities for Ugandan companies to supply appropriate technologies.

Required products that local businesses can supply include hand-held farming equipment, tractors, cultivators and planters.

In addition, a survey by researchers indicated that most of the rural smallholder farmers do not have livestock such as cattle or donkeys to provide animal-drawn implements.

This deficit presents an opportunity for Uganda to consider both livestock and agricultural implement exports.

Related to this, there is a growing interest in animal husbandry in DRC, which is creating opportunities especially in poultry farming.

Already some local companies are receiving inquiries for hatching eggs, an area that smallholder farmers could capitalise on.

For agricultural produce there is potential to supply tobacco, meat, sugar, cereals, cotton, vegetable, fats and oils, nuts, fresh fruits and vegetables.

There are opportunities for agriculture inputs and supplements, focusing on smallholder farmers as well as established commercial farmers.

With regards to Fast Moving Consumer Goods (FMCG), some of the products with potential include peanut butter, honey, sugar, cooking oil, bathing and washing soap.

Local companies can also supply clear and opaque beer, non-alcoholic beverages, breakfast cereals, and dairy products. Currently, Uganda, South Africa and Zambia have a huge FMCG market share in DRC.

For Ugandan companies, the Ugandan suppliers are potential partners that can provide a lucrative passage into DRC. There is indication of potential in the DRC market that local companies are still to take full advantage of.

Accessing DRC market

Uganda and DRC enjoy political relations, which forms a good basis for improving trade between the two countries.

The willingness of the Government of Uganda and President Museveni in particular to construct roads and other infrastructures to DR Congo shows the zeal by Government to transform these political relations into economic gains.

This drive, coupled with aspirations of Vision 2040, which targets an enabling environment that can support a meaningful contribution by Micro, Small and Medium Enterprises to national exports means Government and related institutions are ready to support local companies in penetrating the DRC market.

The Webinar outlined the extensive opportunities available in supporting the growth of the mining industry in the DRC through its local partners.

To maximise on these opportunities, local companies can take advantage of the Uganda and DRC favourable trade relations that arise from the shared membership.

Some of the benefits that come from these trade agreements include reduced import prices and low export tariffs. Some local companies often highlight security fears as a challenge for accessing the DRC market.

However, local businesses can increase supplies to Uganda as a gateway to DRC, riding on the relations between Ugandn businesses and their DRC counterparts.

Given Uganda’s proximity to Congo, companies can set up warehouses in Kasese and Kabale where there is established infrastructure to service the Congolese market.

A thriving informal sector at Kasese could be used as a gateway into DRC where local companies can establish distribution channels at the land entry point and indirectly supply the country.

Further to this, issues of branding and labelling are also key when exporting to DRC.

It is important that products are labelled in French, which is the official language and is the universal medium for business.

Labelling in both French and English will maximise on sales as well as create seamless communication between Ugandans exporters and potential buyers.

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