A growing list of Kenyan companies are looking for investment opportunities in the Democratic Republic of Congo (DRC) shifting focus from the East African Community.
This as the mineral-rich economy turns out to be a fertile hunting ground for top firms, with the World Bank and the African Development Bank tipping the nation as the next frontier for growth.
Firms with an eye on the country include insurer, Jubilee Holdings which has applied for a licence to set up a composite underwriting business as a strategy to boost its earnings, which grew by nearly a fifth last year.
Others are Equity Group which recently pointed to the strategic importance of its DRC’s subsidiaries to its future growth and KCB, which has kicked off a plan to enter the country through acquisition of an existing lender in the next four months.
But why are the Kenyan corporates and President Uhuru Kenyatta’s administration coveting Africa’s top copper-producing country?
Beyond the troubling media headlines and the reminders of a bloody past, the country’s economy has been performing almost unscathed before the Covid 19 pandemic set in.
Except for a slump in 2009, when it grew by only 2.8 per cent, expansion has averaged 7.7 per cent over the last five years.
According to the World Bank, this is "well above the average in sub-Saharan Africa."
With a surface area equivalent to that of western Europe, the DRC is the largest country in sub-Saharan Africa offering huge untapped opportunity for access to one of the world’s last economic frontiers.
It is endowed with exceptional natural resources, including minerals such as cobalt and copper, hydropower potential, significant arable land, immense biodiversity, and the world’s second largest rainforest.
According to Verdant Capital, a pan-African investment advisory firm there is a significant untapped potential for DRC given its 85 million potential consumers, mineral resources, fertile agricultural land and potential for political renewal.The DRC was ranked 184 of 190 countries in the World Bank’s 2019 Doing Business report.DR Congo has 19 licensed banks of which five are local, four pan-African and nine foreign while bank penetration still remains low at around six per cent placing the country among the most underbanked nations in the world.Of an estimated 65 per cent of the population that saves, only 4.7 per cent do so through a bank providing a huge opportunity for foreign banks.This fact was admitted recently by Equity Group chief executive James Mwangi when he pointed to the […]