Democratic Republic of the Congo Trade

Subchapters:

  • Business Relationships
  • Foreign direct investment
  • FTAs ​​and Treaties
  • Development Cooperation
  • Prospective fields of study (MOP)

Business relations

Trade relations with the EU

The EU is one of the most important trading partners and at the same time one of the most important donors of development aid.

In 2020, EU countries imported goods worth EUR 84million and exported goods worth EUR 589.8 million from the DRC. In 2021, we are recording a negative balance after a long time, caused by greater imports, especially of metals.

  • Allcountrylist: Overview of major industries in Democratic Republic of the Congo, including mining, construction, transportation, tourism, and foreign trade.
2017 2018 2019 2020 2021
Exports from the EU (million EUR) 738.7 697.6 667.4 589.9 709.2
Imports into the EU (million EUR) 1000.20 815.6 839.4 842.4 704.3
Balance with the EU (million EUR) 261.6 118 172 252.5 -4.9

Source: European Commission

Trade relations with the Czech Republic

Despite the fact that Czech products have a good reputation in the DRC, business cooperation with the Czech Republic remains low (in terms of possibilities).

The main imported commodities are raw and profiled tropical wood, coffee and wooden furniture. Gas turbines, processor units, soil sorting machines, used clothing, electrical insulation paper and oatmeal were mainly exported.

2017 2018 2019 2020 2021
Exports from the Czech Republic (billion CZK) 0.2 0.1 0.1 0 0.1
Imports to the Czech Republic (billion CZK) ON 0 0 0 0
Balance with the Czech Republic (billion CZK) ON -0.1 -0.1 0 -0.1

Source: CZSO

Trade relations with countries outside the EU

The DRC’s main trading partners are outside the European Union, mainly Belgium and France, as well as China, South Africa and the United States of America. Exports and imports are growing: DRC’s main exports are copper, cobalt, diamonds and timber.

2017 2018 2019 2020 2021
Exports from countries outside the EU (million EUR) 5,964.2 12,922.8 10,538.6 11 130.5 15,816.5
Imports to countries outside the EU (million EUR) 10 122.1 11,911.2 10,161.9 9,243.1 13,818.8
Balance with non-EU countries (million EUR) -4 157.9 1,011.6 376.7 1,887.4 1,997.7

Source: EIU, Eurostat

Foreign direct investment

According to the UNCTAD World Investment Report 2021, foreign direct investment flows to the Democratic Republic of the Congo increased from US$billion in 2019 to US$billion in 2020, despite the global economic crisis triggered by the Covid-19 pandemic.

In the Democratic Republic of the Congo, FDI inflows are mainly developing the mining sector as cobalt prices have risen with increasing demand for its use in smartphones and electric car batteries – Congo is the world’s leading producer of cobalt and Africa’s largest copper miner. The volume of foreign direct investment is estimated at USD 27.3 billion in 2020. These levels remain well below the country’s potential: in fact, the DRC has abundant mineral resources and huge potential in sectors such as mining, energy (especially hydropower) and infrastructure. To date, the mining sector has attracted the most FDI, followed by telecommunications. The main investors are South Africa, Belgium and China.

There are no FDIs of the Czech Republic in the country yet.

FTAs and treaties

Treaties with the EU

Post-Cotonou Partnership Agreement – ​​signed in April 2021 as a continuation of the agreement between the EU and African countries. It regulates, among other things, economic relations and development issues.

Economic Partnership Agreements (EPAs): The EU is one of the most important donors of foreign development aid and an important trade partner in the region. Congo has not yet signed the agreement, but benefits from free access to the EU market.

Contracts with the Czech Republic

There are currently no valid contractual legal documents between the two countries. Since the entry of the Czech Republic into the EU, economic relations have been regulated by the common policy of the EU.

Developmental cooperation

As part of the 11th EDF (2014 – 2020), aid in the amount of 620 million Euros was to be provided, the priority sectors being healthcare, environmental protection, agriculture and road maintenance and construction (especially N1). As a result of the EU’s pressure on the implementation of presidential elections in the DRC, President Kabila decided to suspend all development activities of the EU and its member states, so the Congolese government did not sign the relevant intergovernmental and international contractual documents in 2017, which are necessary to start financing these projects.

In 2013, the Czech Republic provided a total of CZK 2 million for a humanitarian aid project implemented in the DRC by the organization People in Need. It was aimed at providing medical aid to those affected by the war conflict in the eastern part of the country. In 2014, she implemented a small local project “Appui à l’autonomisation des femmes pauvres et vulnerables de la Commune de KISENSO par le reinforcement de leurs capacités économiques” focused on the education of women/businesswomen in the district of Kisenso” in Kinshasa. CZK 300,000 was allocated for this project.

Prospective fields of study (MOP)

Although the DRC market is large (84 million inhabitants), the purchasing power of the majority of the population is low. The exporter of goods will face stiff competition from cheap Chinese imports.

There is a lot of room for Czech companies in the DRC, the share of domestic production (with the exception of the mining industry) is negligible, almost everything is imported. Prospective sectors for Czech exporters are the supply of mining equipment and relevant means of transport, technology for the production and distribution of electricity . Great opportunities exist primarily in power plant technologies (supply of turbogenerators, rehabilitation of hydroelectric plants), supply of small hydropower plants in combination with mills, sawmills and drinking water treatment plants, etc.), but also renewable sources of electricity (solar…), which can be connected off- grid.

We also consider food commodities and technological equipment for the food industry (bakeries, mills, fruit and vegetable processing, beverage production, brewing), technology of freezing operations (e.g. for fish processing) as perspective items for Czech exports to the DRC. There could also be considerable interest from the Congolese side in tractors and other agricultural machinery for private farmers, including supplies of fertilizers and chemicals against pests.

The DRC invests in the development of infrastructure – from this point of view, construction machinery, airport equipment, residential buildings, hospitals are promising.

Congo has large reserves of usable timber. The government restricts the export of unprocessed wood and logs, creating space for companies that will be able to supply equipment/ invest in large-capacity sawmills and wood processing lines.

Congo also offers a promising market for Czech small transport aircraft , as well as an ever-growing market for telecommunications equipment and services of all kinds.

Prospective areas for investment are mainly agriculture and the cultivation of technical crops, food production, light industry (production of everyday goods), clothing and shoe production, furniture production, canning industry and food industry ( including brewing, fish processing ), geological exploration and the mining sector, water treatment and supply, energy, real estate, banking and telecommunication services, ICT, logistics.

Privatization: The DRC government is gradually trying to restructure and subsequently privatize 60 state-owned companies (currently very loss-making), among them the energy company SNEL, the port administration ONATRA, the airline LAC and the railway SNCC. In 2010, 20 companies (mining, energy, transport, telecommunications and finance) were converted into state joint-stock companies and their market value is currently being assessed so that they can be privatized. Their privatization is thus delayed for a long time. The privatization of power plants and transmission networks is being intensively prepared. At the end of 2013, the energy sector underwent a fundamental change – the parliament adopted a law enabling the full liberalization of this sector.

Democratic Republic of the Congo Trade