With loans and donor money pouring in for post-civil war reconstruction, the Democratic Republic of Congo [DRC] is where business is. This fact has not escaped South Africa ‘s industry captains. The country’s leading companies are in a queue for lucrative contracts in DRC. They are also falling over to plough their money into central Africa ‘s mineral-rich country.
In what many view as back pay for the government’s role in brokering peace talks and deploying 1 750 peacekeepers in DRC, South African companies are reaping the DRC’s peace dividend.
During President Thabo Mbeki’s state visit to DRC in January 2004, the two countries signed a bilateral agreement worth R60-billion covering areas such as infrastructural development, agriculture, defence and security.
Over the next decade, Tokyo Sexwale’s Mvelaphanda Holdings is to invest R60-billion in DRC. The company is set to move into mining, road building, railways and the hotel industry. Mvelaphanda and Zwelakhe Sisulu’s Afrimineral Holdings Group lead a consortium that committed itself to a R600-million investment in copper and cobalt mining deposits in the Eastern parts of the DRC. The consortium is also investing in gold mining.
South African parastatals have also trekked northwards. Kinshasa ‘s rolling stock is leased from Spoornet. Eskom is involved in the first phase to rehabilitate the Inga hydro-electric power station. The R24-billion project is part of a programme to “light up” the whole of Africa using power generated from the Congo River ‘s waterfalls. Electricity generated from Inga Falls has the potential to supply the rest of the continent and be exported to Europe . ET Africa, an Eskom division, has to develop DRC’s digital infrastructure. Also going to the DRC is Numsa-organised, Siemens. The company is to install electricity connections and prepaid meters; a deal that will bring home a whopping R300-million.
The new spate of investment commitments follow other South African companies who already operate in DRC. In 2002, Vodacom invested R564-million in cellular communication in DRC. Alcatel and Absa provided finance for Vodacom’s investment. Other companies such as Dimension Data and NamlTech have investments in DRC.
But DRC’s embassy in Pretoria denies that South African companies are accorded preferential treatment. “With a market of 60-million people, vast mineral resources, water reserves, hydro-power potential, high rainfall for agriculture, hectares of arable land, enormous oil and gas reserves, DRC presents great opportunities for any investor. For contracts and business deals, South African companies compete on an equal footing with businesses from all over the world”, says Serge Basaula who is the embassy’s economic and commercial adviser.
The World Bank threw a R720-million credit line to the DRC in July 2003. The country also secured R23,4 bn in donor funding at the end of last year. As part of the bilateral agreement that Mbeki and DRC’s Joseph Kabila signed in January, the two countries are frantically developing protection measures for those who invest in the two countries. The measures will also protect those companies that operate in both countries from being doubly taxed.