Photograph — AFRICA ON THE RISE.

Kenyan firms are tapping into investment opportunities in the mineral-rich economy of the Democratic Republic of Congo (DRC), as the country has proved a fertile ground for top firms’ investments.

DRC is considered to be one of the wealthiest countries regarding natural resources. Despite the presence of these resources, ranging from cobalt, gold and tin.DRC remains one of the poorest nations on earth.

Analysts have predicted several mergers and acquisitions following a new requirement for lenders to increase their capital to a minimum of $50 million by the end of 2020.

In seeking a piece of the mineral-rich country Kenya’s Mayfair Insurance Company recently received a permit to begin operation in the country. DRC’s insurance regulator granted approval to the insurer to operate in the non-life business market. Mayfair group which began its operations in 2005 already operates in Zambia, Rwanda, Uganda and Tanzania.

Also, Kenya’s lender KCB will gain grounds in DRC this year, following its announcement about seeking acquisitions in the country to strengthen its bid of transforming into a Pan-African banking giant with an asset base in excess of Ksh1 trillion ($10 billion) in three years.

Equity already has operations in DR Congo through a subsidiary it established by acquiring 86 per cent stake in Pro Credit Bank, the then seventh-largest bank in the country by assets exceeding $200 million and a customer base of over 170,000, between 2015 and 2017.

In 2019, the bank deepened its presence in the country by acquiring Congo’s second-largest lender Banque Commerciale du Congo (BCDC), with a plan of merging the new business with its existing subsidiary in DRC.

However, DRC might not be ready for these investors, as the country is still being terrorized by rebel groups. The country is constantly at war, which has left several of its citizens dead or displaced. These wars have led to the shutdown of firms, closed the doors of investment and left most of its resources untapped.

According to Verdant Capital, a pan-African investment advisory firm in DRC, there is a significant untapped potential for DRC given its 85 million potential consumers, significant mineral resources, fertile agricultural land and potential for political renewal

The mineral sector has faced several significant challenges hindering it from contributing significantly to the Congolese economy. One of the challenges that face the Congolese mining sector is the country’s political instability, war and high level of corruption by those in power.

During wars, the minerals are illegally exploited by the various rebel groups, forcing several mining companies in the country to shut down their operations.

More so, DRC is blessed with a favourable weather condition that can support a wide variety of crops such as cassava, corn, and coffee. But the Congolese agriculture sector is faced with challenges, with the major challenge being the poor development of the country’s transport sector.

According to the World Bank 2019 Doing Business Report, DRC was ranked 184 of 190 countries. The country’s average inflation in 2020 and 2021 is expected to stay around five per cent. In terms of trade, DR Congo accounts for about six per cent of total exports from the EAC countries.

Last year, DRC formally applied for admission to the six-member East African Community currently comprising Kenya, Tanzania, Uganda, Rwanda, Burundi and South Sudan.

Hence, in improving its declining economy, the government needs to fix its system by establishing security and political stability in the country. By doing so, the country will be able to attract more foreign investors as well as tap into its mineral resource.

Tapping into the wealth of the nation will bring about employment, foreign currency and economic development to the war afflicted nation.

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