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Economics in DRC

Economics in DRC. Overview. SADC Leadership Issues Logistics and Infrastructure Ethnic Diversity Mineral Resources Hydroelectric Telecommunications. DRC in AFRICA: A unique configuration. Nine neighboring countries. SADC REGION. DRC. Tanzania. Malawi. Angola. Madagascar. Zambia.

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Economics in DRC

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  1. Economics in DRC

  2. Overview SADC Leadership Issues Logistics and Infrastructure Ethnic Diversity Mineral Resources Hydroelectric Telecommunications

  3. DRC inAFRICA:A uniqueconfiguration.Nine neighboringcountries

  4. SADC REGION DRC Tanzania Malawi Angola Madagascar Zambia Botswana Zimbabwe Namibia Mozambique South Africa Swaziland Lesotho

  5. The Congo at a Glance • 3rd Largest country in Africa (size of Western Europe or the U.S. west of the Mississippi), with the 4th largest population. • One of the five poorest countries in the world. • One of the ten richest countries of the world in terms natural resources • Oil reserves of 180 million barrels • 100,000MW Hydroelectric potential which would be sufficient for all of Southern & Central Africa’s needs • Bordered by 9 countries • Population (2004 est.): 58 million • More than 200 ethnic groups • Religions (2004 est): Roman Catholic 50%, Protestant 20%, other syncretic sects and traditional beliefs 10%, Kimbanguist 10%, Muslim 10% • Language: Official--French. National languages--Lingala, Swahili, Kikongo, Tshiluba

  6. Former Leaders of the Congo

  7. The Transitional Government President and the Vice-Presidents

  8. DR Congo is a Huge Country as big as the US East of the Mississippi

  9. Congo is a Country of Huge Challenge Here are all of the Paved Roads of Congo.

  10. Insufficient infrastructure • Africa’s road density today is lower than India’s in 1960 • Colonial transport infrastructure was designed to exploit commodity resources, resulting in underdeveloped networks • High transportation costs: • To move 1 ton of fertilizer 1 000 km requires:  USD 15 in the United States  USD 30 in India  USD 100 in sub-Saharan Africa  Double if truck returns empty • (Vijay Modi, Columbia University) The proportion of transportation costs of retail prices of cassava in Central Africa amounts to 60% (IFAD) To move 1 ton of maize requires:  USD 50 from Iowa to Mombasa (13 600 km)  USD 100 from Mombasa to Kampala (900 km) (World Bank)

  11. Lack of Infrastructure Is Killing Africa Kilometers of paved roads per million people in selected countries Km KmUSA 20,987 Guinea 637France 12,673 Ghana 494Japan 9,102 Nigeria 230Zimbabwe 1,586 Mozambique 141South Africa 1,402 Tanzania 114Brazil 1,064 Uganda 94India 1,004 Ethiopia 66China 803 Congo, DR 59Source: Encyclopedia Britannica, 2002

  12. One of those “paved roads”...

  13. And an “unpaved road”

  14. Congo is a Country of Great Diversity with 218 Living Languages from “A” to “Z” ALUR, AMBA, ASOA, AUSHI, AVOKAYA, BABANGO, BAKA, BALI, BALOI, BAMWE, BANDA, MID-SOUTHERN, BANDA, SOUTH CENTRAL, BANDA, TOGBO-VARA, BANGALA, BANGBA, BANGI, BANGUBANGU, BARAMBU, BEEKE, BEMBA, BEMBA, BEMBE, BENDI, BERA, BHELE, BILA, BINJI, BOGURU, BOKO, BOLIA, BOLOKI, BOLONDO, BOMA, BOMASSA, BOMBOLI, BOMBOMA, BORNA, BOZABA, BUDU, BUDZA, BURAKA, BUSHOONG, BUYA, BUYU, BWA, BWELA, BWILE, CHOKWE, DENGESE, DING, DONGO, DZANDO, EFE, ENYA, FOMA, FRENCH, FULIIRU, FURU, GBANZIRI, GBATI-RI, GILIMA, GOBU, HAMBA, HAVU, HEMA, HEMBA, HOLOHOLO, HOLU, HUNDE, HUNGANA, JOBA, KABWARI, KAIKU, KAKWA, KALIKO, KANGO, KANGO, KANGO, KANU, KANYOK, KAONDE, KARI, KELA, KELE, KETE, KITUBA, KOMO, KONGO, KONGO, SAN SALVADOR, KPALA, KUSU, KWAMI, KWESE, LALA-BISA, LALIA, LAMBA, LANGBASHE, LEGA-MWENGA, LEGA-SHABUNDA, LELE, LENDU, LENGOLA, LESE, LIBINZA, LIGENZA, LIKA, LIKILA, LINGALA, LOBALA, LOGO, LOMBI, LOMBO, LONZO, LUBA-KATANGA, LUGBARA, LUNA, LUNDA, LUSENGO, LWALU, MA, MABAALE, MAMVU, MANGBETU, MANGBUTU, MAYEKA, MAYOGO, MBA, MBALA, MBANDJA, MBESA, MBO, MBOLE, MFINU, MITUKU, MOINGI, MONGO-NKUNDU, MONO, MONZOMBO, MPUONO, MÜNDÜ, MVUBA, NANDI, NDAKA, NDO, NDOBO, NDOLO, NDUNGA, NGANDO, NGBAKA, NGBAKA MA'BO, NGBANDI, NORTHERN, NGBANDI, SOUTHERN, NGBINDA, NGBUNDU, NGELIMA, NGIRI, NGITI, NGOMBE, NGONGO, NGUL, NGUNDU, NKUTU, NTOMBA, NYALI, NYANGA, NYANGA-LI, NYINDU, NZAKARA, OMBO, OMI, PAGIBETE, PAMBIA, PELENDE, PHENDE, POKE, RUUND, RWANDA, SAKATA, SALAMPASU, SAMBA, SANGA, SANGO, SEBA, SENGELE, SERE, SHI, SO, SONDE, SONGA, SONGE, SONGO, SONGOMENO, SONGOORA, SUKU, SWAHILI, CONGO, TAABWA, TAGBU, TALINGA-BWISI, TEKE, CENTRAL, TEKE, EASTERN, TEMBO, TEMBO, TETELA, TIENE, TSHILUBA, VANUMA, WONGO, YAKA, YAKOMA, YAMONGERI, YANGO, YANSI, YELA, YOMBE, YULU, ZANDE, ZIMBA, ZYOBA

  15. DEMOCRATICREPUBLIC OF CONGO

  16. Located at the heart of Africa, DRC is the third biggest country of that continent, after Algeria and Sudan, with following specificities: • 2,345,410 sq km • 9 neighboring countries (Congo, CAR, Sudan, Uganda,Rwanda,Burundi,Zambia, Angola, Tanzania) • 47% of the all africa’s tropical forest • 52% of the country covered by forest • Many Mountains, Lakes and Rivers

  17. Copper Cobalt Coltan Diamond Petroleum Gold Uranium Manganese Tin Iron Radium Bauxite Germanium Silver Zinc Cadmium coal Timber Coffee Methane gaz DRC is a country blessed by Nature, considering its unlimited natural resources, spread in all over the country; among that:

  18. Among all DRC’s Natural Resources, the most important is definitely Congo River, 3,100 kilometers, the second river in the world after Amazon by its rate of flow, evaluated to 40,000 cubic meters per second.Congo River is crossing twice the Equator. This configuration results to a very stable level of water during the year, which generates at the site of Inga, close to the embouchure, the most powerful potential hydroelectricity site of the world.44,000 Megawatts of electricity will be produced at that site, at the final stage.

  19. INGA DAM

  20. Althoughblessed by Nature, DRC’s economy hasn’t been able to take off and drive a sustainable development. This is mainly due to political instability the country faced since Independence. Economic key parameters are as follow: • Nominal GDP: 7.328 billions USD ( 2005) • GDP/ capita : 700 USD (2005) • Inflation rate : 13.20 % ( 2005) • Growth rate : 6.5 % (2005) • currency : FC ( Congolesefranc) 1$ US= 490 FC

  21. To grow, DRC must overcomecritical challenges: • National reconciliation • Building of basic infrastructures(roads, bridges, railways, ports and airports) • Development of telecommunications • Relaunch of mining production and exportation • Relaunch of Agriculture • Production of hydroelectricity.

  22. Among priorities, telecommunications stand as a key factor to drive the entire economy. Telecommunications will overcome the lack of basic infrastructures like roads, railways, airports, and allow people to exchange useful information, idea, image, data and values for their development.DRC’s telecommunication infrastructure, was totally obsolete and neglected.This justified the option taken by the Government in 1988, to open this sector to Private Investors.

  23. TELECOMMUNICATION OF DRCIN JANUARY 2000 • 2 GSM Operators: CWN, CELTEL • 2 AMPS Operators: TELECEL, COMCELL • 1 CDMA Operator: AFRITEL • 1 Land line Operator: OCPT • 1 Wireless Operator : SOGETEL • Total Subscribers base: 145,000 • Total cities covered : 10 • Penetration rate : 0,07% (1:1,300), (the lowest of all Africa)

  24. Hunting the mobile telephone signal: A public payphone on the tree in DRC

  25. VODACOM CONGO(RDC)SPRL SUCCESS STORY 2 • 31/12/2003: 58 cities covered, 622,478 subs • 01/05/2004: 93 cities covered, 741,100 subs • 31/12/2004: 120 cities covered, 969,326subs • 21/01/2005: 1,000,000 Active subscribers • 01/05/2005: 143 cities covered, 1,056,000 subs • 31/12/2005: 183 cities covered 1,391,000 subs • 01/03/2006: 1,500,000 Active subscribers • 01/05/2006: 187 cities covered, 1,650,000 subs • 30/08/2006: 200 cities covered, 1,950,000 subs

  26. NETWORK DEPLOYMENT • 200 CITIES COVERED • 328 BTS • 15 BSC • 5 MSC • 96 VSAT • 3 EARTH STATIONS STANDARD B • 1 International Gateway • MW Back bone 1760 KM

  27. MSC: 4 BSC: 15 Sites: 298 Towns: 184 B11 F2 B12 B1 F11 F18 F1 F9 F17 B13 F19 F7 F20 F13 F4 F21 F16 F3 F15 B14 B15 F14 F23 F22 F24 F10 B17 F25 E6 (C45) F5 E4 E1 E2 E5 E19 B9 E16 E17 B18 E3 F12 E18 E15 E34 B4 E7 E32 E21 E9 Coverage Rollout E27 B24 E20 E22 E36 B5 E23 E24 E25 B8 E26 B32 E28 E38 E8 E12 E33 E31 B21 B10 B34 E10 E37 E29 E30 B2 E11 C12 E14 B16 E13 C13 B25 (100) B28 A1 A16 A11 A12 B23 B6 A14 A9 A10 A15 A17 B27 B22 A11 C10 C17 B26 C28 A13 C1 A7 A18 A30 D13 A29 A23 C11 A20 C26 A6 A8 A21 D32 C27 A26 A5 A27 A4 D10 A24 A22 A28 A3 C29 C8 C24 D17 C4 C16 C5 C23 C20 C7 C25 B7 C30 C21 C9 C21 C2 C15 C18 C19 D14 C6 C14 C3 D16 B20 C22 B33 D15 B31 B29 D1 B30 D32 MSC D8 D11 D2 Vodacom and Celtel D18 D25 Vodacom only D21 D24 D23 D12 D4 D5 D25 D7 D19 D20 D22 D26 D27 Updated on 18th January 06 D3 D6 VODACOM CONGO (RDC) s.p.r.l. D28 D31 D30 D29 D9

  28. Democratization of the telephone: the voice of my son!

  29. The Way Forward • Good Governance - including; the quality of the rule of law; the absence of armed conflict or of a high risk of such conflict; respect for labor standards and human rights; recognition of and willingness to protect the rights of indigenous peoples; and government capacity to promote sustainable development through economic diversification. • Such a framework must be developed with public participation, opportunities for public input, comment, and feedback – not drafted by consultants or hurried through as a condition of Bank procedure. • Transparency - Companies and governments must be required to publish what they pay governments for the right to access and exploit natural resources. • including taxes, fees, royalties, production power agreements, host government agreements, and other payments, including signature bonuses.

  30. Outcomes Recommendations • Human Capital and Skills Development • Harmonization of Policies, Legislation and Regulations • Promotion of Foreign Direct Investment and Indigenous Participation • Value addition and Sustainable Development

  31. World Bank Portfolio in DRC • US$ 50 million Emergency Early Recovery Project(Approved 2001)financed a limited set of priority activities that will provide the backbone of the assistance needed in the first phase of the Transition Support Strategy (TSS) . • US$450 million Economic Recovery Credit I (Approved 2002) first tranche US$ 410 clear arrears, US$15 million forest code, US$25 Gecamines reforms. • US $454 million Emergency Multisector Rehabilitation and Reconstruction project( Approved in August 2002), to rehabilitate key infrastructure and social services delivery; • US $120 million Private Sector Development and Competitiveness Project (Approved in July 2003, effective in December 2003) to restructure key public companies, and to provide partial guarantees to investors through the Africa Trade Insurance Agency (ATI); • US $214 million Emergency Economic and Social Reunification Support project (approved in September 2003), to support balance of payments, institutional strengthening, infrastructure repairs, and community-driven development;

  32. World Bank Portfolio in DRC • US $200 million Post Conflict Economic Recovery Credit II (approved in February 2004, effective in May 2004) to support policies that stabilize the economy and pave the way to environmentally and socially sustainable growth and poverty reduction; • US $102 million Multisectoral HIV/AIDS project (approved in March 2004, effective in October 2004) to mitigate the negative impact of the HIV/AIDS epidemic on the stabilization, recovery, and development of the country; • US $100 million Emergency Demobilization and Reintegration project (approved in May 2004, effective in October 2004) to help consolidate peace and promote economic stability and sustainable development in DRC and in the Great Lakes region; • US $60 million Emergency Social Action Project (approved in August 2004, effective July 2005) to improve access of the poor to social and economic services, and increase the availability and management of development resources at the community level; • US $82 million Emergency Living Conditions Improvement Support project (approved in May 2005 and not yet effective).

  33. Steady Deforestation in KisanganiDemocratic Republic of Congo These images show slow but steady deforestation of dense forest cover • 1975: The city and surrounding areas are clearly visible • 2001: The cleared area around the city has grown and become consolidated, spreading along rivers and roads

  34. Lake Kivu-one of Africa’s “killer lakes”Congo/Rwanda These images show dramatic changes before and after the eruption of Mt. Nyiragongo in 2002 • 2001: Before the January 2002 eruption • 2003: Shows the track of the lava flow

  35. Current Mining Projects • Anvil Mining, a Canadian company, and has been in production since 2002. • In April 2005 MIGA provides $13.3 million of political risk insurance after Congolese and international civil society groups raised a number of concerns regarding labor problems, governance, development benefits, and security issues by letter to the Board. • Board report states“illegal extraction of natural resources remains a main source of funding for groups bent on perpetuating the conflict in the eastern and northeastern parts of the country”. • October 2004 Kilwa Incident - Allegedly Anvil Mining provided logistical assistance to bring in government troops to halt a rebel uprising. The government troops’ intervention turned very quickly to the massacre of “more 100 deaths”. • Currently a CAO investigation into the due diligence process by MIGA instigated by Kilwa Incident of October 2004.

  36. Dem. Republic of Congo

  37. Village in Dem. Republic of Congo Ruzizi Valley

  38. Fishing Net Across the CongoLarge wood netting across the Congo River near Kisangani (formerly Stanleyville).

  39. Women in a Dugout Canoe on the Congo

  40. Congo River Village along the River

  41. Barge Transportation A barge transports goods down the waterways of the Congo

  42. Trade • Africa is rich in natural resources such as minerals, timber and oil, but trade with the rest of the world is often difficult. • Factors include poor infrastructure, government instability, corruption and the impact of Aids on the population of working age. • Poorer countries and agencies such as Oxfam also argue that international trade rules are unfair and favour the developed world. • They say rich countries "dump" subsidised products on developing nations by undercutting local producers. • And they accuse the World Trade Organisation (WTO) of forcing developing nations to open their markets to the rest of the World but failing to lower rich countries' tariff barriers in return. • But the WTO says that low income countries receive special treatment, including exemption from some regulations that apply to richer nations.

  43. Democratic Republic of Congo • Coastline: 37 km • 1300 personnel • 5 patrol craft

  44. Global Maritime Traffic Flow

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