Hungry for Change: The Economics Underlying DR Congo’s Political Crisis
Hungry for Change: The Economics Underlying DR Congo’s Political Crisis
Supporting Dialogue and Demobilisation in the DR Congo
Supporting Dialogue and Demobilisation in the DR Congo
Op-Ed / Africa

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

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
Commentary / Africa

Supporting Dialogue and Demobilisation in the DR Congo

Rising violence in the eastern Democratic Republic of Congo has the Great Lakes region on edge. In this excerpt from the Watch List 2022 – Autumn Update, Crisis Group explains what the EU and its member states can do to help bring stability to the area.

The eastern Democratic Republic of Congo (DRC) is experiencing an alarming uptick of violence. Fighting between the Congolese military and the March 23 Movement (M23), which resurfaced in November 2021 after suffering defeat in 2013, has surged. So, too, have attacks on civilians and camps for internally displaced people by other armed groups. The bloodshed has the entire Great Lakes region on edge and is creating friction beyond the DRC’s borders. Of greatest concern, the M23’s attacks have opened a rift between the DRC and Rwanda, with Congolese President Félix Tshisekedi labelling the rebel commanders “terrorists” who receive financial and logistical support from Kigali. 

Complicating matters is that the Congolese president has turned to some of his neighbours for support in tamping down insecurity in the east. Bent on rooting out the armed groups, in late 2021, Tshisekedi gave Ugandan and Burundian troops permission to carry out operations on Congolese soil. He then used the DRC’s accession to the East African Community (EAC) in March 2022 as an opportunity to ask the bloc for help. By way of response, the EAC agreed in April to establish a joint force composed of regional troops to battle militias in the east. But the force left out a key player: citing Rwanda’s alleged interference in the DRC’s affairs, Tshisekedi insisted that the country be excluded from the force, angering Kigali. 

So far, plans to stabilise the eastern DRC remain a work in progress. The new force has yet to fully deploy and is likely to face funding challenges. Meanwhile, diplomatic and demobilisation efforts meant to complement the military track show some promise but have yet to make substantial progress. 

The European Union (EU) and its member states should take the following steps in working to address instability in the eastern DRC: 

  • Refrain from providing financial support to the regional force – which some EAC states have already requested – pending greater clarity on its performance and the sufficiency of human rights safeguards.
  • Building on talks between Kinshasa and a select number of armed groups that were held in Nairobi in the spring, work with the DRC’s regional partners to develop plans for the next round of negotiations, focusing in particular on which militias should be included and for what purpose; in addition, provide financial and technical support for those negotiations. 
  • Provide support for DRC demobilisation efforts by pressing for greater clarity on links between the Nairobi political track, the EAC regional force’s mission and the DRC’s nascent community-based national disarmament, demobilisation and reintegration (DDR) program. Ideally, groups that participate in the dialogue and express interest in demobilising would be given an opportunity to do so through the program. The program also requires donor support, which the EU and member states should provide if satisfied with anti-corruption safeguards and other criteria.
  • When evidence emerges that the DRC’s neighbours have violated its sovereignty – as was the case when a UN confidential report recently reached findings of Rwandan involvement with the M23 rebels – condemn the violations through bilateral and multilateral channels and underscore the threat that instability in the DRC could grow into a regional conflagration.

Turmoil in the Great Lakes

M23 rebels have once again taken up arms in the eastern DRC, a resource-rich area that has long been the battleground for overlapping conflicts involving regional powers and armed groups. The M23 is principally fighting the Congolese army, with hostilities centred in North Kivu province. This conflict has driven more than 170,000 people from their homes since the rebels re-emerged in November 2021, having previously been defeated and signed a peace deal in 2013. At first, the M23 mainly targeted Congolese soldiers, but since June the group has also been making civilian victims. MONUSCO, the UN peacekeeping mission in the country, has expressed its concern about the M23’s sophisticated firepower and its own limited capacity to ward off the group. In a September interview with France 24 and RFI, UN Secretary-General António Guterres said “the M23 is a modern army with heavy weapons, more advanced than MONUSCO’s equipment”.

Along with the M23 insurgency, other armed groups have also intensified attacks on both military and civilian targets. Notable among them is the Allied Democratic Forces (ADF), a Ugandan outfit whose biggest faction has sworn allegiance to the Islamic State and whose members kill locals and loot or burn down villages. In late August, for instance, suspected ADF fighters killed at least 40 civilians in North Kivu. Meanwhile, the Coopérative pour le Développement du Congo (CODECO), a loose association of militias of mostly Lendu ethnicity operating in Ituri, has killed dozens of civilians and terrorised many more since the year began in a spate of raids on camps sheltering displaced people.

A confidential UN report … included evidence of continuing ties, indicating that Rwanda has helped reinvigorate the M23.

The stakes are high for Tshisekedi, who plans to seek a second term in office in 2023 polls and has repeatedly pledged to end the turmoil in the east. He has sought outside assistance to make good on his promise. In late 2021, Tshisekedi permitted Ugandan and Burundian troops to enter the country to fight, respectively, the ADF and RED-Tabara, a Burundian rebel group based in the DRC. Tshisekedi pointedly did not seek Rwanda’s assistance, at least partly because he believes that Rwanda is behind the M23’s abrupt reappearance. Rwanda (along with Uganda) did indeed back the group from when it first emerged in 2012 until Congolese and UN forces defeated the movement a year later. As Crisis Group has noted elsewhere, a confidential UN report leaked in August included evidence of continuing ties, indicating that Rwanda has helped reinvigorate the M23.

Tshisekedi’s decision to allow Ugandan and Burundian troops into the DRC but not Rwandans infuriated Rwandan President Paul Kagame, who has rejected Tshisekedi’s accusations concerning Kigali’s links to the M23. Kagame alleges that, to the contrary, it is Kinshasa that is cooperating with the Forces démocratiques de libération du Rwanda (FDLR), a remnant of the Hutu militia responsible for the 1994 genocide. While some evidence suggests that the Congolese army works with the FDLR in some capacity – the leaked UN report says some army commanders cooperated with a coalition of armed groups, including FDLR members, in fighting the M23 – Kagame’s frustration at being left out likely has other dimensions as well. He may be concerned that Rwanda will be boxed out of access to the eastern DRC’s natural resources, in particular gold, and that the Ugandans will extend their sphere of influence in the region at Rwanda’s expense.

The DRC-Rwanda dispute escalated further after Tshisekedi’s decision to seek support from the EAC in April. The EAC answered that request by deciding to form a joint force composed of regional troops to battle armed groups in the eastern DRC. But Tshisekedi insisted that Rwandan soldiers be excluded from the force, riling Kagame further. Kagame’s sense of grievance – coupled with his conviction that Kinshasa is aiding the FLDR and fuelled by economic interests – may tempt him to order a unilateral incursion to target the FDLR, which he still considers a threat, or to back another proxy.

Meanwhile, components of the regional force are beginning to deploy, but the full force has not yet taken the field. In August, the Congolese authorities reported that a Burundian contingent had entered the DRC under EAC auspices. In late September, the Kenyan defence forces started deploying materiel and troops. South Sudan, Tanzania and Uganda are also to send contingents to fight alongside Congolese forces.

A Risky New Force

Aside from the costs of alienating Rwanda, the EAC deploying a regional force carries other significant risks. The force’s draft battle plan says the bloc is to assemble between 6,500 and 12,000 soldiers with a mandate to “contain, defeat and eradicate negative forces”. The new forces will for the most part be joining forces from those countries that are already on the ground either by invitation of the Congolese (in the case of Burundi and Uganda) or as part of the UN peacekeeping mission that operates in the DRC with a civilian protection mandate (in the case of Kenya and Tanzania).

The presence of so many foreign forces in the eastern DRC could spell trouble. In the past, the DRC’s neighbours have repeatedly undermined stability in the east by arming proxy fighters and helping themselves to mineral wealth, such as cobalt, coltan and gold. Some – for example, Burundi and Uganda – may well continue to push their own agendas, even when their troops are placed under joint force command, as appears to be the plan. The force’s deployment could also energise armed groups unhappy with an influx of foreign soldiers, escalating levels of violence, including against civilians. Nor is it clear how the new force will coordinate with MONUSCO, which has an overlapping territorial writ but a different mandate focused on civilian protection. Finally, the EAC has never before deployed a peacekeeping or enforcement operation, much less put in place safeguards for protecting civilians, raising considerable concerns about human rights violations by the troops themselves. 

Funding shortfalls are one reason the joint force has not yet fully deployed. According to the draft battle plan, which outlines the force’s objectives and rules of engagement, each country is to pay for its own soldiers. Some governments will likely struggle to bear the costs, especially if the operation drags on. Kenya has reportedly already asked EU member states, as well as China and the U.S., for money for men and materiel. 

Foreign powers have options beyond funding the EAC regional force to support stabilisation efforts in the eastern DRC.

But foreign powers have options beyond funding the EAC regional force to support stabilisation efforts in the eastern DRC, notably a recently initiated diplomatic track. Back when the bloc’s seven leaders agreed to the joint force, they launched a round of Kenyan-mediated talks with Congolese militia leaders in Nairobi. The first round was scrambled hastily together by the Congolese and Kenyan authorities in April and involved only about twenty of roughly 120 armed groups, excluding among others the M23 branch loyal to its military commander Sultani Makenga (the most active of the group’s two factions) and outfits considered to be foreign such as the ADF and FDLR. The Congolese are discussing a second round but have not scheduled it.

The DRC’s demobilisation strategy is another part of the picture. Launched in April but yet to hit its stride, it focuses on returning former fighters to their communities and helping them build livelihoods outside the military, rather than integrating them in the army or granting amnesties, as previous demobilisation programs did. This demobilisation effort is at least theoretically linked to the EAC’s diplomatic and military tracks. According to the draft concept of operations, the joint force is mandated to support Tshisekedi’s demobilisation efforts, suggesting that the EAC expects armed groups to either commit to demobilising through the Nairobi political track or become targets for the regional force. But the concept offers no detail about how this would play out in practice. 

What the EU Can Do

Given all the uncertainty surrounding the EAC regional force, the EU and member states should hold off on providing its support through the European Peace Facility or other channels pending information about the force’s performance, impact on the eastern DRC’s stability and respect for human rights. On the whole, given the long record of proxy warfare in the area and its harm to the civilian population, the bar for funding the force should be relatively high. Instead, the EU and its member states should support Tshisekedi’s and the EAC’s non-military efforts to stabilise the east, including through dialogue and demobilisation. 

As concerns dialogue, the EU should offer technical and financial support to a second round of Nairobi talks with armed groups active in the eastern DRC. As a threshold matter, EU and member states with strong relationships in the region should work with Kinshasa and EAC states to encourage progress toward a second round and help develop a framework for a meaningful process beyond individual rounds of talks. Fundamental questions, such as which groups should be included and specific topics and goals of the process, still require fleshing out. The EU could also support efforts to establish the Office of the Inter-Congolese Peace Dialogue, which will support the Nairobi talks and oversee implementation of the EAC heads of state agreements on peace and security in the DRC. 

The EU and member states should ... help Congolese authorities breathe life into Kinshasa’s disarmament, demobilisation and reintegration strategy.

The EU and member states should also help Congolese authorities breathe life into Kinshasa’s disarmament, demobilisation and reintegration strategy, which although promising is still in the very early stages of implementation. This line of effort should be of particular interest to Brussels given the EU’s new strategic approach in support of DDR. One way they can help is by encouraging greater clarity on how demobilisation efforts are linked to both the joint force’s mission and the Nairobi political track. There should be incentives for armed group members who wish to come off the battlefield to enter the demobilisation program, including the offer of an alternative to armed activity. 

Financial and technical support will also be important. Donors have been reluctant to foot the bill because previous demobilisation efforts were largely donor-driven, lacking local buy-in, tainted by alleged embezzlement and unsuccessful in permanently dismantling any armed group. Government officials and military officers alike have treated the programs as sources of patronage. The new initiative, however, is designed to send former fighters home to civilian life and help them develop alternative livelihoods rather than integrating them in the army, as previous programs did; diverting them to unarmed vocations may help them sever their links to armed group chains of command. Against this backdrop, the EU should consider providing financial and technical support to the plan to the extent it is satisfied with the adequacy of anti-corruption safeguards and if, as the program rolls out, it assesses that it holds out sufficient hope of genuinely offering low-level insurgents a viable future.

Finally, the EU and its member states should more directly address the challenge to peace and security created by neighbouring countries’ support for DRC rebels. The findings of the confidential UN report regarding Rwandan involvement with the M23 and other sources addressing alleged Ugandan support, for instance, should be the basis for Brussels and member state governments to relay clear messages to Kigali and Kampala condemning violations of Congolese sovereignty and underscoring the threat that instability in the DRC could grow into a regional conflagration. Member states represented on the UN Security Council can urge the Council to reinforce these messages from New York. Standing visibly behind the principle of territorial integrity is particularly important at a time when European states are condemning Russia’s transgressions in Ukraine. They should make clear that violations of this core principle of the UN Charter are to be condemned wherever they take place – in Europe, Africa or elsewhere.

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