Economy

How DRC became Kenya’s darling

drc

A view of the main highway in the City center of DR Congo Capital City of Kinshasa also known as Boulevard du 30 Juin. PHOTO | Cyril NDEGEYA | NMG

Kenya’s involvement in security matters of the Democratic Republic of Congo (DRC) follows a surge of capital from East Africa’s largest economy into the mineral-rich central African nation.

Currently, Kenya has boots on the ground in DRC through the United Nations Stabilisation Mission in the Democratic Republic of Congo (Monusco) fighting the Isis Central African Republic terror group.

Recently regional military chiefs gathered in Nairobi to discuss modalities of deploying the East African Standby Force (EASF) in DRC followed by an East African Community (EAC) Head of States meeting in Kenya to discuss resurgence of M23 rebels in Eastern Congo.

Kenya’s increasing involvement in DRC security has coincided with a rise in business ties that have seen its biggest banks snap up two of DR Congo’s three largest lenders.

KCB Group announced a Sh15 billion deal to take over Trust Merchant Bank, one of the DRC's three largest banks, behind Equity Commercial Bank of Congo (Equity BCDC) and the largest lender Rawbank which together control over two-thirds of the DRC market.

The Sh178.5 billion ($1.5 billion) asset bank with strong retail, SME, corporate and digital banking channels and over 110 branches will boost KCB assets to Sh1.5 trillion making it the largest Kenyan bank by assets.

KCB and Equity have rival operations in Kenya, Uganda, Tanzania, South Sudan, Rwanda and Burundi but Equity raced ahead into the Congolese market with the acquisition of ProCredit Bank in 2015 which it renamed Equity Bank Congo.

Equity Bank then acquired Banque Commerciale du Congo (BCDC) in 2020 and merged it with Equity Bank Congo creating Equity BCDC, the largest foreign bank in DRC.

DRC with a population of more than 92 million mostly unbanked population is the second most lucrative subsidiary market for Kenyan banks behind Rwanda.

Equity Bank, the only local lender with a presence in DR Congo, earned Sh4.6 billion in gross profit, which is larger than the combined earnings of the seven Kenyan banks earned in Uganda of Sh4.4 billion.

For DR Congo, the stars may be aligned and regional businesses are eyeing the lucrative market of Africa’s second-largest country which now looks poised to take off with entry into EAC and macroeconomic stability under the IMF programme.

Entry into EAC is expected to create customs uniformity, hopefully, open visa-free access and make it easier to register businesses and set up subsidiaries.

Currently, if you want to go to Congo you can get a seven-day visa on arrival and get a 30-day visa at the embassy for around $50.

And with banking going to DRC local Kenyan businesses are also flocking to the mineral-rich country looking for opportunities in agro-processing, mining, energy and the hospitality sector.

Investors have begun the gold rush trooping into DRC seeking first-to-market advantage, led by Equity Bank which led a delegation of Kenyan businesses to set up shop in the country.

Last year, the Kenyan and DRC governments in partnership with Equity Group convened a 15-day Business Trade Mission in four DRC cities.

Kenya-Kinshasa chamber of commerce chair Christine Maina says businesses should be wary of shortcuts when setting up shop and should follow the whole procedure when setting up.

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