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Hungry for Change: The Economics Underlying DR Congo’s Political Crisis
Hungry for Change: The Economics Underlying DR Congo’s Political Crisis
DR Congo's Deadlocked Crises
DR Congo's Deadlocked Crises
Op-Ed / Africa

Hungry for Change: The Economics Underlying DR Congo’s Political Crisis

Originally published in African Arguments

At the heart of disenchantment with President Kabila’s government lie deep economic woes.

High taxes. Harassment by the revenue authorities. Lack of a stable exchange rate. Cheap imports from neighbouring countries. Lower demand.

All these factors and more were cited in a 4 November letter sent by the local Federation of Congolese Enterprises (FEC) to Kongo Central province officials, in western Democratic Republic of Congo. The revealing message was informing the authorities of the forthcoming closure of the Bralima brewery, a major employer in the city of Boma.

The concerns raised echo structural problems expressed by other Congo-based businesses contacted by Crisis Group during the past year in Bukavu, Lubumbashi and Kinshasa as well as by the national FEC.

The combination of political uncertainty, predatory state institutions and low commodity prices are contributing to an increasingly toxic situation.

As the DRC’s political crisis deepens – with the official end of President Joseph Kabila’s mandate on 19 December fast approaching – the combination of political uncertainty, predatory state institutions and low commodity prices are contributing to an increasingly toxic situation.

Recent street protests, in which dozens are estimated to have died, have focused on the constitution and delays to the electoral process. But the wish for change, usually focused on Kabila’s failure to improve the lot of ordinary people, has a strong economic sub-text.

Stagnant GDP, Shrinking Budget

Over the last ten years, the government has focused on macro-economic stability and investment in high-profile prestige projects such as Congo Airways, a new government building, airports, and roads in the wealthier parts of Kinshasa. This has done little to alleviate Congo’s deep inequalities. Nevertheless, riding on high mineral prices, Congo’s GDP growth averaged 7.7% from 2010 to 2015.

This year, however, the economy has hit a slump, leading official growth projections to be revised down to 4.3% for 2016, only slightly outpacing demographic growth. This stagnant outlook has seriously affected the already meagre state budget. Over the course of the year, the government lowered spending from $8 billion to $6 billion, though actual expenditure will come in even lower at around $4.5 billion. This leaves very little for new policies or to fund future elections whose cost is estimated at over $1 billion.

In January 2016, then Prime Minister Matata Ponyo announced a package of 28 measures to restructure the economy. In October, the government and parts of the opposition reached an agreement following their National Dialogue to push the presidential election due this year back to 2018. African regional powers quickly backed the deal, and soon afterwards opposition figure Samy Badibanga was appointed prime minister in accordance with the agreement.

But Badibanga will struggle to continue his predecessor’s donor-friendly reform programme at the same time as responding to various political pressures. This is especially the case since the reforms’ impacts – including desperately needed diversification of the mining-dependent economy – will only be felt in the medium-to-long term at best.

Currency Troubles

The economic crisis has also caused a serious depreciation of the Congolese franc (FC). This currency was stable at 920/930 FC per $1 for about three years, but has recently dropped to 1,170 officially, though rates are even lower on the street. Confidence continues to wane amid fears of a return to undisciplined money printing and consequent spiral of inflation.

The Central Bank’s resources to support the franc are also decreasing; foreign reserves are currently estimated at below $1 billion, less than four weeks of imports. Meanwhile, the government has reverted to paying the money it owes large companies in Congolese francs, drawing the ire of the business community.

In October, the government announced measures to cushion the effects of currency depreciation, including reducing import taxes and making available hard currency to import basic foodstuffs such as sugar and palm oil. But their impact is expected to run out in March 2017, after which price evolution will become more uncertain according to businesses consulted by Crisis Group. Fuel prices cause greatest concern; they have been stable due to subsidies and the low international market price, but any rise would have knock-on effects on commodities and urban transport relied on by most city dwellers.

Corruption is also an ongoing drag on the economy. The government’s anti-corruption taskforce, led since June 2015 by a former justice minister, has had little impact, though several high-level cases have recently come to light, including one that touches on election financing.

Former PM Ponyo previously complained that he had no control over large parts of the economy, including the mammoth parastatal mining company Gecamines, and that he had to “navigate crocodile infested waters”. Large-scale corruption scandals damage the economy, though citizens and businesses suggest they are most concerned by the omnipresent, mid-level or “petty” corruption which permeates their daily lives.

Prices Rise, Salaries Fall

With the prices of bread, rice, cornmeal and palm oil rising steadily over the past six months, poorer urban families are seeing their precarious living conditions eroded. A normal loaf of bread still costs 200 FC but now it is much smaller. Households dependent on cornmeal have seen their food expenditure increase by 12%.

Corn is particularly important in southern provinces, where a price spike earlier in 2016 added to local political tensions and led the government to send senior officials to Zambia to try to increase imports. But Congo’s southern neighbours have themselves been hit by a recent drought. In early December 2016, prices increased again.

Education, a cornerstone for social change, is a high priority for the population, but both access and quality have suffered.

The salaries of public servants, except for those in the security services, have declined by 30% since June, typically from the equivalent of $100 to $70. Food allowances were also cut for soldiers. In the private sector, businesswomen called maman ya zando have struggled because of the franc depreciation. Commercial banks contacted by Crisis Group said they have recently seen more small businesses defaulting on debt repayments.

Particularly vulnerable groups such as sex workers, often the sole bread winners for their households, are also feeling the pressure. The numerous, mostly young, street traders selling shoe shines or paper handkerchiefs for 250 FC barely survive in normal conditions. Even a small increase in their costs can push them and their dependents into hunger.

Financial pressure on families also puts the solidarity system within communities under stress, particularly in dealing with illness and schooling. In Ituri, primary school fees have increased dramatically from 1,500 to 5,500 FC for the 2016-2017 school year. The minimum fees in Kinshasa are around $350 per year, an ever-increasing sum in local francs. This has pushed numerous children out of school. Education, a cornerstone for social change, is a high priority for the population, but both access and quality have suffered.

The Economy Turns Political

Economic troubles are gaining political prominence. In a defensive 15 November state of the nation address, President Kabila painted a positive picture of his 15 years in power, but also acknowledged that “the absence of jobs and the resulting idleness obscure future prospects”. He warned that such frustrations should not be used for political ends.

At the start of the school year in September, the opposition platform le Rassemblementattempted to tie the economic and political crises together through actions known as écoles mortes (school boycotts). Many children did stay away from school, partly for fear of violent incidents.

Youth groups, in particular Lutte pour le changement (Lucha), focus on the economy and unemployment, but they too see politics and economics as two sides of the same coin. Initially campaigning for better public services in Goma, they are now focused on protecting the constitution, particularly the provision that the president can only serve two terms.

Students are easily mobilised when confronted with rising costs, such as tuition fees. In early November, a fee increase at a higher education institute in Kinshasa led to violent riots. The measure was quickly reversed and the institute’s director sacked. On 19 November, one month before the end of Kabila’s second term, Lucha in association with other youth platforms launched the new campaign “bye bye Kabila” on social media and on the street, but it was quickly repressed by authorities.

The economic slowdown is most visibly felt in the cities. Illuminating new research shows differences in the evolution of prices across the country, pointing to possible different political reactions in rural areas. This suggests that economic decline will not necessarily lead to more coherent political protest as people are driven first and foremost by survival, something the government is keenly aware of. But as the government’s resources for patronage shrink, things could unravel even in remote areas. New provinces hurriedly established through the breakup of existing provinces (decoupage) in 2015 lack resources, and the appearance of new armed groups in North Kivu and recent violence in Kasai Central province are provoking considerable stress.

Prime Minister Badibanga and his new government have to allay social unrest while funding what will be a costly election process. This may prove a near-impossible task, while the combination of political uncertainty and a major economic recession is creating a dangerous impasse.

The risk is not just an explosion of anger on 19 December when Kabila’s term was supposed to end, but a slow atrophy thereafter.

The risk is not just an explosion of anger on 19 December when Kabila’s term was supposed to end, but a slow atrophy thereafter. A major concern is the funding of salaries and operational expenditure for the army and other security forces. If this significantly deteriorates, it is likely to cause major disorder as was the case in 1991 and 1993.

The population is hungry for change, but is frustrated by the lack of development and socio-economic opportunities, and by the complacency of the governing elite. Economic mismanagement fuelled popular anger during the slow decline of the Mobutu regime in the 1990s.

Political change through elections symbolise hope, and the government and the international community should do all they can to make them happen in the right conditions, with no further undue delay.

Read the PDF version here.


Senior Analyst, Congo
Former Fellow, ​Central Africa
Interview / Africa

DR Congo's Deadlocked Crises

Originally published in Tagesschau

In an interview with ARD Africa Correspondant Alexander Göbel, Crisis Group’s Central Africa Project Director Richard Moncrieff discusses DR Congo’s many crises and how the international community can deal with the country’s ongoing political blockage. 

Richard, what is the current situation in the Democratic Republic of DRC?

It’s not good. There is a complete political blockage. The best way to describe it is to go back to the beginning of the year to what is called the Saint Sylvester agreement, where opposition parties and pro-government parties (known as the Majority) agreed that they would hold elections in the course of 2017 and that the constitution wouldn’t be changed in light of these elections. The agreement gave rise to a period of optimism but, since then, the government has managed to claw back everything that they conceded, in particular by retaining complete control over the government, the electoral commission and the Follow-up Committee of the Saint Sylvester or 31st of December agreement. They’ve managed to have their own way, and having their own way means of course that they have blocked the political situation because they are happy with the status quo. They are in control of the country and they retain good control of the security forces. Indeed, the security forces in all their forms and their commander, as well as the pro-government parties, have remained very cohesive over the last few years, with very few disagreements. So, for the moment, the government would certainly feel as having its own way.

Are government forces responsible for the violence and subsequent displacement seen recently in Kasaï?

I don’t think that there is any doubt that they are responsible for some of the violence. I wouldn’t say that government forces are responsible for the outbreak of the violence or that they are the root cause of it. Instead, there are two root causes for this violence and, in a way, the violence can be seen as an intertwining of these two things. The first is the loss of legitimacy of central government, which increases the willingness of people to contest state authority. Indeed, we’ve seen anti-government militia in the Kasaï directly contest state authority, rip down electoral commission buildings and attack state agents. Moreover, on the other hand there has been a dispute over the inheritance of the chieftaincy. This happens fairly frequently but, in this context, it turned very violent and was poorly managed by the government ‒ partly because it’s an area that has been for a long time the stronghold of the opposition.

There are rumours that this unrest in the Kasaï, might have been used as a pretext by the government not to hold elections; are they exploiting chaos in order to prevent elections from happening?

I think that’s true and I think that the government is jumping on any opportunity it can to slow down the electoral process. There are parts of the country, other than the Kasaï, where we know that members of the government or people very close to the government are stirring up trouble and are arming and paying militia. Now, usually that’s for a very local agenda; we see that between the Hutu and the Nande in North Kivu, for example. This unrest may not be part of an orchestrated plan, but it is certainly something that the government will use and is using to delay the electoral process.

Is it not a dangerous strategy? At some point it might be uncontrollable for the powers that be.

I think that’s true and I think it’s an element of what they call in French “Pompier-pyromane”, the fireman pyromaniac who lights fires, enjoys putting them out and then tries to claim credit for putting them out. Of course, as with wild fires, this kind of unrest can spread. We must remember that absolutely nobody was talking about unrest in the Kasaï two years ago. So, an outbreak of unrest there was very unexpected and it indicates worryingly that violence could have erupted anywhere in the country. We’ve now got very serious areas of instability: in North and South Kivu, where unfortunately it’s fairly familiar to the population and also in most of ex-Katanga or at least in most of the provinces of the former Katanga; in the Kasaï and in Kongo Central, near the capital, where we’ve recently had violence concerning a sort of spiritual insurrection that again was rather badly managed by the government. Those are very serious areas of instability and we could see more. The situation is unpredictable and very unstable. In a way, the government doesn’t have a grander plan and instead works on a day-by-day basis. For them, another month in power is a good thing and an opportunity to steal and accumulate more money.

Is the government facing an opposition that is not strong enough to really change things?

The weakness of the opposition is a very important factor in this situation for several reasons. Firstly, let’s think about why the opposition is weak: it’s been split and divided. We see bits of it being corrupted into government, of course. The death of Etienne Tshisekedi at the end of January this year was a major blow to the opposition because no one can replace him and his historic charisma. Part of the opposition is in exile and those on the ground have very little traction with the population. They don’t get out or meet the people very much. They are often occupied by their internal struggles. There are two very important consequences to this weakness. Firstly, it makes international engagement very difficult because what the international actors don’t want is to replace the opposition or come in to mediate a situation where one side is overwhelmingly stronger than the other. That’s a very unfavourable set of circumstances for international mediation and international actors know that. So, to some degree, the weakness of opposition explains the passivity of the international community. Secondly, the weakening of the opposition poses a very serious problem for electoral democratic politics. A lot of the talk at the moment in the DRC is about the technical aspects of elections, including the electoral calendar and budget. Those are very important issues, but underlying these, there are questions on whether opposition parties are actually able to campaign and create a democratic landscape both in the run-up to, and after an election. These underlying political issues are very important but often ignored in the conversation around the Congo.

We have seen the recent visit of Nikki Haley, U.S. ambassador to the UN, to the DRC. It was a pretty helpless kind of visit. Was there anything she could do?

You know, one of the problems with the DRC, which has been carefully constructed by successive leaders, is that nobody appears to know who is responsible for anything. So, what you see when you get little fragments of readouts from these meetings between President Kabila and international envoys is that Kabila just sits and listens and at the end he says: “ah well that’s a terrible situation, isn’t it?” and he generally ends the conversation with “you must pray for me”. So, his position is that he is not responsible for any of this.

He acts like he is the one who’s carrying the burden …

That’s exactly the impression he tries to give. He’s not completely alone in that. And as long as he doesn’t do anything decisive, his tactic is to be held responsible for nothing. So, while president of the country, all the criticism just washes off his back.

Isn’t the country suffering from more than just political blockage? We’ve also seen armed conflict and even a cholera epidemic.

The country is fraying very badly. The cholera epidemic we’ve seen was not a surprise. The administration of the country is declining from an already low base, which is extremely worrying. Indeed, we should be very worried about the state of this country. Whether or not we see an outbreak of open civil war, or whether or not we have a very decisive violent period, whatever happens ‒ if we don’t make positive progress ‒ things are going to get worse in this country and for the wider region. We’ve already seen spillover between the DRC and Angola when we had tens of thousands of refugees from the Kasaï region going to the north of Angola, which was one thing that the government did take very seriously and sent a very senior envoy to Angola to address the matter.

Could ethnic tensions arise, for example between Hutus and Tutsis, in the Great Lakes region?

Thankfully, we don’t see at the moment the sort of constellation of aggressive international alliances and rivalries we saw in the civil war period. International interference by neighbours has not been as substantial as we’ve seen in the past. But the risk of unrest in various corners of the country pulling in neighbours, whether it’s through corrupt alliances or through ethnic affiliations and so forth, is very real.

DR Congo's President Joseph Kabila as he addresses the UN General Assembly in New York, on 23 September 2017 UN

So, it has been almost exactly 21 years since the outbreak of the First Congo War in 1996. Are you afraid that something like that could ever happen again?

I think there is a risk of generalized instability in the Congo but I don’t, for the moment, see the elements of risk for another “Africa’s World War”. Nevertheless, generalized instability in the Congo can be enormously damaging both to the people who live there and to the people who live in neighbouring countries. To a certain degree, history repeats itself and to some degree it doesn’t. Some of the legacy issues of the Congo Wars have not been resolved and I think there are two issues in particular ‒ one being corruption and of course the corruption that we currently see in the Congo finds its origins in the war. Indeed, it’s often army generals who are corrupt, and if you trace back their story you will see that the massive accumulation of wealth started in the war period. The second unresolved issue is one of leadership. Although everybody welcomed the elections of 2006 and the constitution is something that the Congolese feel very proud of, we’ve now come to realise that it didn’t really solve the problem of winner-takes-all presidential politics. This makes the presidency too sought-after and the fight to win it overwhelms the peaceful political process and tends to become violent. That’s not unique to the DRC, but we’re running into this problem again.

What is the way forward for this country? Can the international community really offer anything to Kabila to step down or to make way for a real electoral process?

It is very important that international actors understand that we’re not going to see a miracle. Calls for Kabila to stand down on the 31st of December may be morally founded but they are not realistic. What we need to do is work to keep things going on the right track: find points of progress, support people and institutions in the country who are working in the right direction and try to make the electoral process inevitable and irreversible. Some of that is happening and we need to continue with that. The second very important point is to fight in every way we can to keep the political space open so that when we eventually do come to elections, those elections are meaningfully democratic and, crucially, their aftermath is manageable. These are really important elements. But the whole sense of international support around the elections is very weak. Many Western countries are pushing on the technical aspects, but African countries feel fairly reluctant to push strongly. I think that reluctance is caused by a sense that simply having elections won’t solve the country’s problems. We’ve got to work on a broader political platform to help Congo find a better future. Elections are an essential part of this process, but not sufficient on their own. We’ve got to go beyond that and try to find a more healthy form of politics for the country.

You also need a certain climate for investors to come in and create employment and development…

Of course, the economic climate is absolutely disastrous and that’s in part because of a lack of investment, although the Congolese situation is particular because the overwhelming proportion of investment goes into the mineral sector. We are seeing a very strong economic decline at the moment, with inflation and impoverishment. To make matters worse, for the last eleven years ‒ since the 2006 elections ‒ we haven’t really seen productive international or even domestic investment because the country is too dominated by the mineral sector, and in other ways too dysfunctional for people to invest in meaningful ways.

We’ve heard so much talk in the context of the G-20 summit in Germany about the so-called Marshall Plan for Africa. The German minister of development argued that, if the private sector is to come in, they have to create employment as well. I have the feeling that the main objective here is to prevent people from migrating to Europe. Looking at what’s going on in the DRC, is there substance to these ideas?

Yes, I think people come to these summits with their own preconceptions and their own way of thinking about things and developing the private sector is a phrase that sounds very nice. But if you are in a nice town in Germany or in a town in the Kivus, private sector development takes very different meanings. Other than the obvious problems haunting the Congolese economy, from poverty to a lack of capital and demand, one of the most critical is criminalisation. Of course, many businesses are criminal because there is no other way to function in this system. So, when we talk about investment, we are obviously talking about illicit or semi-illicit investment. These kinds of investment don’t tend to be long-term or productive. Instead, there is very little investment that can provide stable jobs, which the population desperately needs.

With all the terrible things going on in the country, this sort of activity will be promoted as job investment and creation. Is this like it’s a post-colonial reflex of what has been done there before?

The civil war created an enormous number of opportunities for corrupt enrichment ‒ in particular in the mineral sector ‒ and we are seeing a lot of the fallout now. A lot of people are starting to investigate into grand corruption and there is a lot more that is not being investigated on the ground. Many analysts of Africa have pointed to African countries finding a certain niche in the world economy through criminal activities. That is true to some degree, but I think we shouldn’t forget the very large number of Congolese entrepreneurs who are trying to just invest in buying or building a hotel and just trying to run a legitimate business which may have some tax evasion or a bit of corruption on the side. But that’s just because that’s how you have to operate in the DRC. Indeed, although there is this very large criminal element to the Congolese economy, there are also a lot of people who are just trying to struggle by very adverse circumstances, both international but most of all Congolese themselves.

How can this country come out of this situation, where it is seen by many as failed or failing state?

We need some kind of new deal between elites and between elites and the people. It won’t be a written deal, but we need some kind of deal about how the country can be governed so that resources can be distributed in a more equitable way. Now, of course some of that distribution will be illicit, but it needs to happen on the basis of more sustainable, and therefore less violent patterns. If we can achieve that, then that might allow a private sector to develop; one that is more oriented to efficiency and creates a greater constituency against corruption. We have seen those circumstances occurring in some places, even if very unevenly, as in Nigeria. Without pretending that Nigeria is a massive success story, some success was achieved there and I think they followed that pattern. Without being wildly unrealistic, I think we can say that you need this core political deal between the elites and it needs to have a sense of contract with the people in the sense of where the country is going to go, rather than just the current money-grabbing by politicians. With that, people can develop an autonomous sense of how they would like to develop their economy and how they can contribute to that.

One last question: Where is the UN in all of this? How can they contribute to peacekeeping? Sometimes I think they are just doing the opposite. Where are they now on this issue?

MONUSCO, the UN mission to the DRC, is not in a good position because the whole operation was set up to monitor peace agreements. They then turned toward building the capacity of the Congolese state and in particular the capacity of the security forces. The Congolese government is now rather hostile toward the UN and cooperation between UN forces and the Congolese army is at a low point. If you look at various nominations that have occurred within the Congolese army recently, you can see very clearly that the authorities in Kinshasa are thumbing their nose at the UN and other donors by appointing people who have corrupt and violent backgrounds to important positions. The UN has to reorient itself toward what you would call “damage limitation” and limit the damage that is currently being done to the country by the political impasse. That means more thorough human rights monitoring and much more flexibility and faster deployment. We did see some of that in the Kasaï but some of the very well-known old problems of rapid deployment within the UN came up and hindered MONUSCO’s response when it had to redeploy troops to the Kivus. So, some of the old problems are still there and the force needs to adapt to the new situation.