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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
Understanding the New U.S. Terrorism Designations in Africa
Understanding the New U.S. Terrorism Designations in Africa
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.

Contributors

Former Senior Analyst, DR Congo
Former Fellow, ​Central Africa
An Armed Forces of the Democratic Republic of Congo (FARDC) soldier takes part in a foot patrol following an alleged ADF attack in the village of Manzalaho near Beni, 18 February 2020. AFP/ Alexis Huguet
Q&A / Africa

Understanding the New U.S. Terrorism Designations in Africa

The U.S. has designated two armed groups in the DRC and in Mozambique as terrorist organisations, claiming they are affiliated with the Islamic State, and creating potential legal peril for peacemakers who may deal with them. Crisis Group analyses the implications.

Which armed groups did the U.S. designate under its terrorism authorities and what is their backstory?

Last week the U.S Department of State designated two armed groups in the Democratic Republic of Congo (DRC) and Mozambique, as well as their leaders. U.S. officials allege that these two groups – the Allied Democratic Forces (ADF) in the DRC, and Ahlu Sunna Wal Jammah (ASWJ) in Mozambique – have become Islamic State (ISIS) franchises. It refers to them as the Islamic State of Iraq and Syria – Democratic Republic of the Congo (ISIS-DRC) and the Islamic State of Iraq and Syria – Mozambique (ISIS-Mozambique). ASWJ is also known locally as Al-Shabaab, although it is distinct from its Somali namesake.

The U.S. designations come amid expressions of increasing alarm in Washington that despite the end of ISIS’s physical caliphate in the Levant, the group could be gaining influence elsewhere, especially in Africa. Already, local groups in Nigeria and the Sahel fight under ISIS’s banner. Since 2019, ISIS has stated that its “Central Africa Province” includes parts of the DRC and Mozambique, where it says it has developed alliances with local armed groups, including the ADF and ASWJ.

The ADF and ASWJ are groups whose violence has historically been first and foremost driven by local dynamics and grievances. They recruit mainly local fighters.

Although it emerged in the 1990s as an Islamist movement fighting the Ugandan state, the ADF has since the 2000s mostly been active in the northern part of the DRC’s North Kivu province, where it has recruited Congolese fighters, including by force, and entrenched itself by manipulating disputes among local chiefs and communities in areas under its control. Having developed tactical alliances with both senior army officers and armed groups fighting security forces, it both fuels and feeds off an internecine and murky conflict on the ground.

In Mozambique, ASWJ formed when frustrated youth, including local petty traders and poor fishermen, began building their own mosques and prayer houses in Cabo Delgado province and challenging established religious leaders they saw as too close to state authorities. As the police clamped down, they eventually took up arms, launching their first attack in 2017. Some former ruby miners, expelled from mining concessions earlier that year, also joined the fight, according to Crisis Group’s research.

There is some evidence of prior contacts between the two designated groups. Local observers and officials in the DRC and Mozambique say that there are some known cases of Mozambicans, including some of the leaders of ASWJ, travelling to the DRC for training, but these movements are believed to have ended years ago. The U.S. Department of State says the two groups are “distinct”.

Women wait in line during a World Food Program distribution at a school in Matuge district in northern Mozambique, 24 February 2021. AFP/Alfredo Zuniga

How dangerous are the ADF and ASWJ?

Both the ADF and ASWJ have grown more dangerous over the years, becoming increasingly bold in their attacks against security forces while inflicting terrible violence against civilians.

The ADF, long dormant in the DRC, first began resurfacing again in 2014, mainly committing atrocities against civilians in gruesome machete attacks. From 2017, the group then began turning its attention increasingly against government security forces and UN peacekeepers. Its operations became more sophisticated and used greater firepower. According to a December 2020 report by UN investigators in the DRC, the ADF has over time also become better at building improvised explosive devices, although it has nothing like the ISIS core’s expertise.

Recent Congolese military operations between late 2019 and October 2020 have killed hundreds of fighters belonging to the ADF, which Crisis Group’s research indicates is now split into competing factions. Some elements have moved east to the foothills of the Rwenzori mountains bordering Uganda, and some north into neighbouring Ituri province, where they have been involved in reported killings.

In Mozambique, ASWJ has become significantly more dangerous and sophisticated since it first started up in 2017. In the early stages of the insurgency, attackers grouped in small packs of a few fighters to attack remote police outposts or villages, often brandishing blunt weapons. But by early 2020, the insurgents had taken significant stockpiles of weapons from government security forces and were able to mount attacks on district capitals, including the port of Mocimboa da Praia. Government forces fled the city in August and have yet to retake it. Violence against civilians also escalated over the past year, as the insurgency swept south towards the provincial capital Pemba, with numerous credible reports of atrocities committed by ASWJ fighters.

In recent months, security forces working with foreign military contractors from South Africa have caused the group some setbacks, destroying some of their camps and storage facilities in the bush. Nevertheless, insurgents continue to regroup and mount guerrilla attacks on security forces, while also plundering villages for food.

Are countries in the region concerned about these groups?

Yes, although for the time being the DRC’s and Mozambique’s neighbours in the Great Lakes region and Southern Africa are less concerned about the groups’ possible territorial ambitions than the threat they might pose to public spaces in their capitals and other locations. Some worry that they will face the kind of attacks that Kenya has seen in recent years in Nairobi, or that Uganda saw in Kampala in 2010. Somalia’s Al-Shabaab jihadist group has claimed responsibility for the Nairobi and Kampala attacks, although some Ugandan security sources believe the latter was carried out with assistance from ADF operatives. South Africa also shows signs of being worried about militant groups, including those from the Great Lakes region and Mozambique, using its territory as a base or safe haven, and about possible links between home-grown militants in South Africa and those in the DRC and Mozambique.

What is the Islamic State’s relationship with the two groups?

Crisis Group has shown in the past how ISIS was able to strengthen and shape the tactics of the Boko Haram faction that became the Islamic State in West Africa Province (ISWAP) by deploying a limited amount of resources, training and instruction, although any influence ISIS possessed did not transform the movement’s overwhelmingly local aspirations. There is little to suggest that ISIS has gained anything like that level of sway over either the ADF or ASWJ, much less the ability to exert command and control over them.   

A recent study on the ADF by George Washington University, which some U.S. officials privately endorse, provides evidence that ISIS has given financial assistance to the DRC group, and that there have been communications between the two organisations. Specifically, the report details financial transactions between Waleed Ahmed Zein, an ISIS financial operative who was sanctioned by the U.S. Department of Treasury in September 2018, and his alleged ADF contacts. It additionally details cases where ISIS disseminated propaganda about ADF attacks and presents ISIS-published photos of ADF leader Seka Musa Baluku, who according to the study has pledged allegiance to the global ISIS leadership, preaching to his recruits.

The study also states, however, that it has found “no evidence of direct command and control orders” from ISIS to the ADF. The December 2020 UN report states that even if ISIS claimed 46 purported ADF attacks in 2020, compared to 29 in 2019, many of the claims inaccurately described the attacks’ locations and dates, leading the authors to conclude that ISIS had “limited knowledge and control” of these operations. In the meantime, sources close to the ADF say one ADF faction appears to have rejected ISIS and may even be turning against Baluku’s group.

Similarly, while there is evidence that ISIS has had some contact with jihadists in Mozambique, it is unclear how close or meaningful their ties are. In a report issued last year, UN investigators working on Somalia stated that Mohamed Ahmed “Qahiye”, a native of the semi-autonomous region of Puntland in northern Somalia and a member of an ISIS-linked Al-Shabaab splinter group, had travelled to Mozambique in early 2020. Regional security sources say he is a trainer and a bomb-maker. While ASWJ attacks did become more sophisticated in 2020, the group has yet to show evidence of explosive device capacities.

In addition, communication between the groups and some coordination in disseminating propaganda does not suggest especially close links. When ASWJ took control of the port of Mocimboa da Praia in August, ISIS did not broadcast this in its Al-Naba magazine for two weeks. Nor has it claimed any ASWJ attack as its own since October. U.S. officials say this is because the ISIS core’s media wing is under pressure that currently limits its output.

Are there foreign fighters in ASWJ?

Yes. The biggest cohort of foreigners fighting within the ranks of ASWJ, according to government officials, regional security sources and eyewitnesses interviewed by Crisis Group, are from Tanzania. Many of them appear to be acolytes of Aboud Rogo, a former Kenyan cleric who was linked to both al-Qaeda and Al-Shabaab in Somalia and who was assassinated in 2012. Abu Yasir Hassan, whom the U.S. has identified as ASWJ’s leader, is also Tanzanian.

What will be the effect of these designations and how might authorities in the DRC and Mozambique manage the fallout?

Among other things, the terrorism listings freeze all of the assets under U.S. jurisdiction that belong to the ADF and ASWJ or their designated leaders, and make it a U.S. criminal offense to knowingly provide material support to any of the designees.  

While the sanctions that flow from these designations in theory do not criminalise all contact with the two groups, they are extremely broad, and their implementation could create problems for both humanitarians and peacemakers. Humanitarian agencies may shrink from providing support to vulnerable populations in Mozambique and the DRC if they believe they might end up resourcing someone who could later be accused of being an ADF or ASWJ member. Government or UN officials who might want to put resources into the hands of insurgents or fighters in order to, for example, transport them to a forum for peace negotiations, could technically also fall foul of the material support restrictions that flow from the designations.

Nor is there much likelihood that the designations will lead to a quick dismantling of these armed groups, which manage much of their money in cash or via forms of money transfer that will require painstaking work to investigate and chase, and may put them beyond the reach of U.S. sanctions.

The U.S. designations meanwhile could unintentionally send a counterproductive signal to political actors in the region. Especially in the DRC and Mozambique, where these measures are not fully understood even by top policymakers, they could be used by hardliners to justify calls for addressing the challenge posed by the ADF and ASWJ through military action alone. Diplomats in the region also now wonder whether the official unveiling of a U.S. military training program for Mozambique right after the sanctions were announced will be the thin end of the wedge for more U.S. military engagement in the gas-rich country. So far, however, the Mozambican government has signalled very clearly it does not want any foreign boots touching the soil of Cabo Delgado. Military operations in the DRC and Mozambique have recently dented both groups, but tackling the threat they pose will require a broader approach, including efforts to appeal to the Congolese and Mozambican citizens who respectively make up the bulk of fighters in both groups.

Contributors

Deputy Director, Africa Program
DinoMahtani
Deputy Project Director, Central Africa
PMvandeWalle
Senior Consultant, Southern Africa
PiersPigou
Researcher, Horn of Africa
Meron_El