Nr: 25 / April- 2015 ECONOMIC NEWSLETTER EMBASSY OF THE KINGDOM OF THE NETHERLANDS IN KINSHASA ECONOMIC NEWSLETTER OF THE EMBASSY OF THE KINGDOM OF THE NETHERLANDS IN KINSHASA & BRAZZAVILLE Design by MEDIALAB CONSULT Connecting business to african market ! The Netherlands finance a drinking water supply project in Inkisi (Bas-Congo) The Ambassador of the Kingdom of the Netherlands, Mr. Gerard Michels, signed together with the Congolese Minister of Finance, Mr Henri Yav, the first grant agreement to the “ Inkisi Water Supply” project. The ceremony was held in the conference room of the Ministry of Finance in Kinshasa. This project is funded by the Dutch infrastructure programme ORIO, and will rehabilitate the water supply system in the town of Inkisi (Bas-Congo Province). This signature marks the launch of the development phase, the duration of which is estimated at about 10 months. The signing ceremony took place in the presence of the Bas-Congo Minister of Planning, the Deputy Managing Director of REGIDESO and the Country Director of the Dutch development organization SNV. PAGE 2 PAGE 3 PAGE 4 PAGE 5 Headlines • • • • • • Kinshasa hosted the AgriBusiness Forum from 22 to 25 March UK lawmaker calls for investigation into Soco over bribery allegations The government announced an economic growth rate of 9.5% in 2014 Mobile Communication: Will operators join hands? Economic growth does not benefit the entire population, according to the IMF Kinshasa, Lubumbashi and Kisangani will soon be connected by optical fibre Economic Activities • • • • • • • Congo’s banking sector set for two flat years after fast growth Canadian firm MHI will provide technical assistance to SNEL The construction of Inga, the largest dam in the world, is struggling to start Greenpeace denounces the “organized chaos” in the wood sector The agroindustrial park of Bukanga Lonzo bursts into three companies Hilton Worldwide opens its first hotel in the Democratic Republic of Congo South Sudan, DRC interested in Ugandan crude oil export pipeline Congo-Brazzaville • • • • • The government imposes a tax on inter-network communications Increase of 9% in the non-oil sector Brazzaville hosted a conference on financial inclusion in Africa Fishery: Towards an agreement between Congo and the Dutch manufacturer DAMEN Equatorial Congo Airlines confirms its ambitions in West Africa • Ever heard of... PUM Public? • Contact ECONOMIC NEWSLETTER OF THE EMBASSY OF THE KINGDOM OF THE NETHERLANDS IN KINSHASA & BRAZZAVILLE Design by MEDIALAB CONSULT Connecting business to african market ! 2 Headlines UK lawmaker calls for investigation into Soco Kinshasa hosted the AgriBusiness Forum from 22 to 25 March over bribery allegations A cross-party anti-corruption group of British MPs called for UK and US authorities to investigate claims that Soco International, a London-listed oil company, may have breached anti-corruption legislation in Africa’s oldest national park in DRC. Analysis by Global Witness, based in part on footage shot by the makers of the Oscar-nominated ‘Virunga’ documentary, showed that Soco and its contractors apparently paid off armed rebels and talked dismissively about the ecosystem of Virunga National Park. Soco’s oil block overlaps with Virunga, a UNESCO World Heritage site that is home to around a quarter of world’s remaining mountain gorillas. Soco denies the allegations made against it in the documentary and in Global Witness’report. DRC’s prime minister has said that his government wants to find a way to explore for oil in the Virunga national park, and will engage in negotiations with UNESCO to “explore judiciously”. (Source: Global Witness & The Guardian) The government announced an economic growth rate of 9.5% in 2014 This annual meeting highlights the importance of agriculture business opportunities in Africa. It welcomed nearly 400 representatives from over 50 countries of small producers and farmers associations, but also of trade and agricultural chambers, development banks, civil society, NGO’s and policy makers as well as people of the field of scientific agriculture. This year the city of Kinshasa hosted this international meeting, in which the Embassy of the Netherlands was a partner. For Ms Idith Miller, vice president of EMRC, the main organizer of the forum, these meetings are an opportunity for entrepreneurs to discuss investment projects in the field of agriculture. The AgriBusiness Forum is an international business platform created to strengthen the agro-food sector in Africa, by encouraging partnerships and exchange of best practices and by attracting investments. This year, the forum addressed the theme: “Towards an inclusive growth: a new vision for agricultural transformation in Africa.” (Source: ACP & Radio Okapi) Mobile communication: Will operators join hands? The economy of DRC recorded a growth of 9.5% in 2014, one of the best performances since the country’s independence of 1960, announced Augustin Matata Ponyo, the Congolese Prime Minister. Mr Matata Ponyo also said that for 2015 the government expects “a double digit” growth, though he didn’t enter into detail. “According to the United Nations Development Programme, if we keep this pace of wealth creation, DRC could become an emerging country within 13 years,” he said. Forecasts of the Congolese government are slightly more optimistic than the International Monetary Fund (IMF), which estimated last December that Congo is expected to have an economic growth of 9% in 2014 and 9.1% in 2015, thanks to the increase in mining production. (Source: Agence Ecofin / photo: radiookapi.net) There is a reconciliation going on between Vodacom, Bharti Airtel and Millicom International Cellular SA as part of a telecom infrastructure sharing project in Africa. According to the Ecofin Agency, these operators with top positions on the DRC market seek to jointly achieve lower telecom network maintenance and expansion costs. The reconciliation reveals a major challenge for these operators who continuously expand their network coverage over large areas. True, these are big investments and they are essential for providing a high quality in communication. On 31 December 2014, the estimated number of subscribers is 61 million for Vodacom, 75 million for Bharti Airtel and 25 million for Millicom. (Source: Central Africa Information Agency) Kinshasa, Lubumbashi and Kisangani will soon be connected by optical fibre Economic growth does not benefit the entire population, according to the IMF On a DRC visit, the first deputy head of the IMF, David Lipton, welcomed the state of the Congolese economy, and particularly its growth. But he said that this growth does not benefit the entire Congolese population. “The government has been considerably successful in stabilizing the economy. The very high inflation of about 10 years ago is under control, and has been reduced to very low numbers. The exchange rate has remained stable over the last three years. Growth reached a rate of 9% “, said David Lipton. He recognized the need to “expand the benefits of this growth to the entire population.” To get there, David Lipton has advised the government to invest in education and health. (Source: Radio Okapi) The regional programme for broadband telecommunications networks in Central Africa was launched in Kinshasa on Thursday 19 March. This project should connect the cities of Kinshasa, Lubumbashi and Kisangani, the main economic centres of DRC, by optical fibre, and it should interconnect DRC with its nine neighbours. The broadband network, called CAB 5, is part of the fifth phase of this regional programme. It is funded by the World Bank for $ 92 million, and consists of the construction, the management and the marketing of optical fibre cable. This project is also supposed to ensure the development of the digital economy in DRC, to increase high-speed Internet connection and to reduce telecommunication prices so that a greater access can be allowed to new information technologies. The network that connects the three cities will be added to the 3,300 kilometres of optical fibre connecting Moanda, Kinshasa and Kasumbalesa. (Source: Radio Okapi / photo: vanves.fr) 3 Canadian firm MHI will provide technical assistance to SNEL Economic Activities Congo’s banking sector set for two flat years after fast growth The Congolese government and the Canadian company Manitoba Hydro International (MHI) signed a service contract. The company will provide technical assistance to the National Electricity Company (SNEL) to improve its performance. According to the Congolese Budget Minister, since the corporatization of SNEL in 2010, several projects were launched to clean up its assets and financial position before actually opening its capital to private investment. It is in the context of SNEL’s recovery that MHI will provide experts in fields of production services, transportation, distribution, finance, procurement and technical control. According to the head of the MHI team, the service contract will cover a period of 18 months with funding from the World Bank estimated at more than $ 10 million. (Source: Radio Okapi) The construction of Inga, the largest dam in the world, is struggling to start Having started from one of the world’s lowest banking participation rates, banking assets in Congo, home to over 65 million people, rose from around $ 300 million in 2002 to more than $ 4 billion at the end of 2013, as a degree of stability emerged in a post-war economy. “In the next two years, nothing will happen. We will just try to manage the existing situation,” told Michel Losembe, president of the banking association and CEO of BIAC. Losembe said that after growing by 35 % in 2012, Congo’s banking sector expanded by 12 % in 2014, below the rate he would expect given the overall economy’s growth of 9.5 % last year and a forecast 10.4 % for 2015. “I’m afraid in 2015 the growth of the banking sector will be below the GDP growth,” he said. “We should still be able to grow in multiples of the GDP growth because we’re growing from so small.” But Losembe remained positive on longer-term prospects. “If we succeed in the elections in 2016, we will see a lot of things happening,” he said. “Companies will be investing like crazy.” (Source: primature.cd / photo: mediacongo.net) Greenpeace denounces the “organized chaos” The agro-industrial park of Bukanga Lonzo in the wood sector bursts into three companies It is a monumental construction with a total investment cost estimated at $ 80 billion. The world’s largest dam, on the banks of the Congo River, will have a production capacity of 40,000 megawatts. Enough to power more than half of the African continent. The project is supposed to enter its first phase within a few months, but donors aren’t particularly lining up at the gate. $ 80 billion are needed for the entire project. No financing plan has yet been made public, while the construction of Inga 3 is scheduled to begin in October 2015. Only the group of the African Development Bank consented to a funding of $ 68 million for the Inga dam 3. South Africa, on the other hand, is ready to import 2,500 megawatts, which is half of the electricity generated by the dam, while the rest is for the Congolese mining companies. (Source: FranceTV Info / photo: info-afrique.com) Hilton Worldwide opens its first hotel in the Democratic Republic of Congo Hilton Worldwide announced the signing of a franchise agreement with Africa Hospitality Investments to open its first hotel in DRC. Dubbed DoubleTree by Hilton Kinshasa-The Stanley, this property is set to open in 2016 after extensive renovations. It will offer 96 rooms and a business centre, three meeting rooms and a fitness centre. The hotel also provides three dining outlets, including a restaurant serving food all day, a coffee lounge and a panoramic restaurant. Premises of the DoubleTree, which were formerly those of the French Embassy, are located in Gombe. With more than 9 million inhabitants, Kinshasa is the third largest urban area in Africa and is right next to Brazzaville, capital of Congo. (Source: Agence Ecofin) According to Greenpeace, the organization for nature de- The Steering Committee of the agro-industrial parks profence, the RDC timber industry which is still trying to rebuild gramme in DRC has created three companies around the agro-industrial park of Bukanga Lonzo. According to the Minafter decades of war, is very poorly regulated. ister of Economy Modeste Bahati Lukwebo, the three separate companies are: “one for the agro-industrial park itself, the According to the NGO Transparency International, in 2014 second for the use of the site and the third will be responsible nd DRC was ranked 152 out of 175, among the worst perfor- for marketing products harvested at Bukanga Lonzo, namely mers in the sector. Illegal timber widespread in this country at the international market in Kinshasa. “ that is sorely lacking in regulation, and where 90% of the wood is produced without any legal framework. For the Congolese Government, the capital of the three companies will be open to the private sector to promote a public In 2002 DRC reformed its forest code. Although it contains - private partnership. Three types of shareholders will have to some rules of good conduct, the text is far from complete. A set up the companies: the Congolese state, the South African bunch of implementing measures are still missing. The Con- partner Africom and the Congolese private sector. For the golese government lacks capacity, but also the political will operationalization and development of agricultural activities in Bukanga Lonzo, Africom is already hard at work. (Source: to regulate the timber sector. (Source: RFI) Primature.cd) South Sudan and DRC interested in Ugandan crude oil export pipeline South Sudan and DRC have shown an interest in the construction and development of the proposed 1,300-km (806-mile) crude pipeline to the Kenyan coast, said Ugandan Minister for Energy and Minerals Development Irene Muloni (photo). The pipeline development is a regional project where Uganda, Kenya and Rwanda agreed to have carried out a feasibility study by Toyota Tsusho, Muloni said. “This study is expected to be completed by April 2015 and discussions with Congo and South Sudan about their participation are already going on. There are interests from South Sudan and Congo which the government is going to take into consideration,” she said. Uganda and other East African nations want to capitalize on a string of oil and gas discoveries that could turn the region into a major exporter, but production has been hampered by, among other issues, disputes over export routes. (Source : Platts / photo : newtimes.co.rw) 4 Congo-Brazzaville Increase of 9% in the Congolese non-oil sector Brazzaville : The government imposes a tax on inter-network communications The expanding economy reconfirms foreign investors that Minister of Planning Jean Jacques Bouya invites to invest in his country. Antoine Ngakosso, the General Director of Taxes and Areas of Congo (Brazzaville), launched the popularization campaign of tax provisions adopted by the government for 2015. The state now deducts 10 CFA francs per minute for a call made by a subscriber to another network. For each SMS sent to other networks, the state will charge 1 CFA. “The non-oil sector has achieved an average growth rate of about 9% during the period 2011-2013,” he said. “Agriculture and animal husbandry, manufacturing, construction and public works, transport and telecommunications, trade, restaurants and hotels have contributed to the gross domestic product (GDP) to 24% in 2014” Bouya added. “With a sustained growth rate of 5%, Congo is on an economic path that assures more than one investor,” he continued. According to the minister, this growth creates confidence because it no longer depends exclusively on the oil sector. (Source: Le Point / photo: journaldebrazza. com) Brazzaville hosted a conference on financial inclusion in Africa The telecom operators will be the ones to pay the new taxes. Anticipating the consumer’s fear about a possible rise in prices of telecom services, M. Ngakosso said that this new taxation “will not influence the cost of the call because the sampling rate is very simple”. In addition to the tax on inter-network communications, mobile operators will also have to pay a new flat annual tax on telecom towers. The amount, set at 1 million CFA francs per pylon, will be levied for the benefit of local communities. (Source: Agence Ecofin / photo: defimedia.info) Fishery: Towards an agreement between Congo and the Dutch manufacturer DAMEN DAMEN Shipyards will sign an agreement with the Congolese Government on the construction of professional flat-bottomed fishing boats. The objective is to increase the country’s fish supply and to contribute to food security. The already well advanced project was presented to the Minister of Fishery and Aquaculture, Bernard Tchibambelela by Mr. Jan van der Vorm, who is the Regional Director for DAMEN. The boats will be used on the Congo River and on the rivers Alima, Léfini, Niari, Likouala Likouala Mossaka and still many other rivers in order to increase fish supply, “said Bernard Tchibambelela. “ Next to the fishing boats we will build a few surveillance boats to provide security on the Congo River from north to south,” added Mr. van der Vorm. (Source: Central African Information Agency) Equatorial Congo Airlines confirms its ambitions in West Africa The meeting, co-sponsored by the International Monetary Fund (IMF) and the Bank of Central African States (BEAC), was aimed at the study of the prospects of financial inclusion in Central Africa and of the options for governments to promote this record. At the opening of the conference the Minister of State Gilbert Ondongo, who is in charge of Economy, Finance, Planning, Public Budgeting and Integration, recognized that financial inclusion in Central Africa lags behind. The Congolese situation is not isolated and we find the same causes in most sub-Saharan African countries with these challenges. With the appearance of two new routes to Bamako and Dakar, a few weeks after the opening of the destination Libreville and the establishment of the daily flights Brazzaville / Paris and Brazzaville / Dubai, Equatorial Congo Airlines wants to strengthen its presence on the continent. “This year, as part of the expansion of our network and our fleet, we want to transform the airport of Maya-Maya in a real Central-African hub. We did this by offering our passengers many rotations and high-end service,” said Fatima Beyina-Moussa, CEO of Equatorial Congo Airlines. “The three main causes are identified: the low level of national income and real GDP per capita, the underdevelopment of financial services and the difficult access to banking services,” said Minister Ondongo. (Sources: Ecofin Agency & The Voice of America / photo: zenga-mambu.com) Indeed, this new service is a crucial and strategic step in the company’s growth process and should strengthen the exchanges and cooperation between Congo, Mali and Senegal, more generally, with the rest of West Africa. These two new destinations complete the offer of Equatorial Congo Airlines, which already serves on the regional network, Cotonou (Benin), Douala (Cameroon), Libreville (Gabon) and Kinshasa (DRC). (Source: Afrique Inside / photo: Samuel Dupont) POST SCRIPTUM Ever heard of... PUM Public? PUM Public PUM Public has been set up to offer strategy advice and coaching to central governments in developing countries and emerging markets, whereby retired top officials from the Netherlands voluntarily offer support to central government entities that need expertise to grow their countries to the next level. Find out how PUM Public can help solve problems relating to public administration issues. FIntroducing PUM Public The Netherlands is a highly developed and economically advanced nation. At the heart of this success is a typical Dutch phenomenon: citizens striving for consensus, cooperating and sharing knowledge. These core elements of Dutch society are often attributed to the fact that the country lies partly below sea level, with only dikes and efficient mutual water management keeping the water out. The Dutch water management expertise nowadays ranks as world class and by sharing knowledge, Dutch farmers have become the most efficient in the world. To give you an idea of the areas in which PUM Public might be able to assist: besides water management, we may be able to help with policies concerning food security, gas production and transport, design- and branding of products and expertise in setting up a stable pension system. P R A C T I C A L I N F O R M A T I O N - - - - - - - - - - - - - - - - - - - - - - Embassy in Kinshasa Contact 11, avenue Nzongotolo Immeuble Residence 55, Kin-Gombe Phone: Emergencies: Fax: E-mail: +243 99 6050 600 +243 99 818 62 24 +243 99 6050 629 [email protected] Postal address Lokatie 309 / ZMA Kinshasa Postbus 12200 - 2500 DD Den Haag Opening hours Monday - Thursday Friday 08:00 – 16:30 08:00 – 13:30 Opening hours consular department Monday & Wednesday 09:00 -12:00 Otherwise by appointment only --------------------------------------------------------------- Consulate in Brazzaville Innovative knowledge for the public sector As the Dutch have hardly any natural resources apart from natural gas, they have always invested in knowledge, research and education. This has put them in the premier league in terms of prosperity but also has given rise to one of the most stable nations in the world. This stability and the tradition of consensus and cooperation mentioned earlier have fostered a public sector that is not only very well developed, but also highly innovative and often seen as an example for others. The PUM Public proposition Through PUM Public, (retired) public top officials from the Netherlands offer their expertise and knowledge to public bodies in developing countries, where this knowledge cannot be found otherwise. The proposition is the result of a strategic partnership between various Dutch ministries and PUM, in which retired public top officials have been recruited for the programme; the ministries pay for airfare and overhead costs, the top officials agree to act as unpaid volunteers. PUM facilitates the trips and Dutch Embassies coordinate the missions with the local ministries, the latter paying for board and lodging. How to apply Contact the Embassy of the Netherlands in DR Congo with your request. PUM will match your request to a retired top official. After your approval, a PUM Public top official will visit for the assignment lasting between two and three weeks and reporting with recommendations afterwards. About PUM Netherlands senior experts For over 35 years, volunteers of PUM Netherlands senior experts have shared knowledge and expertise in developing countries and emerging economies. The primary goal is to give increased impetus to local economies and a boost to employment. The PUM Public spin-off is directed to the public sector, aiming to support central governments with advice on complex governmental issues that Dutch top officials may have also dealt with in their careers. PUM has more than 60 top officials lined up to serve you! More information Please contact the Embassy of the Kingdom of the Netherlands in Kinshasa: [email protected] or visit www.pum.nl/content/PUM_Public ECONOMIC NEWSLETTER OF THE EMBASSY OF THE KINGDOM OF THE NETHERLANDS IN KINSHASA & BRAZZAVILLE Address 30, Blvd Denis Sassou N’Guessou B.P 277 M’Pila - Brazzaville Opening hours Monday - Friday 09:00-16:00 (Consulate) Tuesday & Thursday 09:00-12:00 (Consular affairs) Honorary Consul Ms. Hilly-Anne Fumey Phone: +242 069 241 407 E-mail: [email protected] For comments, suggestions and remarks on this Newsletter, or any others business, please contact the Embassy’s economic policy officer: Phone: +243 99 060 50 627 E-mail: [email protected] ----------------------------------- Disclaimer You have received this Newsletter because you have had previous contact with the Embassy of the Kingdom of the Netherlands in Kinshasa, DRC. Please send an email to [email protected] with “remove from mail list“ in the subject line if you no longer wish to receive this newsletter. The content of this newsletter does not reflect the views of the Embassy of the Netherlands in Kinshasa. It is merely a resume of news articles, from both national and international newspapers and news agencies. ------------------------------------ Join our network at www.linkedin.com Mr Gerard Michels (Ambassador) Mr Norbert Moerkens (Deputy Head of mission) Mr Francis Wilanga (Economic policy officer) Design by MEDIALAB CONSULT Connecting business to african market !
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