DRC: The Good News
Windhoek – The DRC’s economy is out of the “red zone” and is on track to near double digit growth this year, the country’s Prime Minister Matata Ponyo has said.
Although the DRC’s economy still faces risks from an over-reliance on commodities and because of political instability, it is on course to grow by 8.3 percent in 2013.
PM Ponyo said prospects for growth have never been “so brilliant”, citing a fall in inflation, a rise in GDP, and currency stabilisation as some of the positive pointers after years of internal strife.
He said the DRC’s copper production rose to more than 600 000 tonnes last year from a paltry19 000 tonnes in 2002, when the country was just emerging from a civil war.
The DRC is Africa’s second-largest producer of copper after Zambia.
The African Copper belt stretches from northern Zambia into the DRC’s Katanga Province.
PM Ponyo told an economic investment forum in Kinshasa last week that, “I want to assure you this country is in the process of changing. I am convinced that the question of development is mainly an issue of governance and leadership.”
He denied that the DRC suffers from a “resource curse”, adding that the government should be given space to address the social challenges facing the majority of the population.
The DRC faces political instability due to an insurgency in North and South Kivu provinces.
Much of the anticipated growth hinges on Kinshasa eliminating barriers to doing business in the country and clamping down on rampant corruption.
The vast and populous DRC holds large deposits of copper, cobalt, zinc, tin, coltan, iron ore, diamonds and gold among other minerals.
The DRC is experiencing a mining boom though without commensurate revenue flows into state coffers.
The IMF last year also said that DRC’s economy would grow by more than eight percent, but warned that it is subject to a number of downside risks.
“Some of the risks stem from the potential for further weakness in the euro area that spills over into lower global growth, with adverse implications for already weakening commodity prices,” the IMF said.
It went on: “Other risks could be home-grown, in particular those stemming from fiscal slippages given expenditure rigidities if overly optimistic tax revenue projections are not realised, spending pressure from an escalation of the recent conflict in the eastern part of the country, or a reversal of governance reforms that puts a freeze on investment.”