DRC not an easy environment, but opportunities aboundFollow @MadeItInAfrica
The Democratic Republic of Congo (DRC) is not a market for small businesses without the capital to do adequate research and afford the country’s high operating costs.
So says Jeremy Wiley, a well-known South African businessman who recently established a property services firm, CongoProp, in the south-eastern city of Lubumbashi.
Wiley told How we made it in Africa in an interview that the DRC is an expensive country to visit. He said that flights from South Africa to either the capital Kinshasa or Lubumbashi can be costly, and that hotel rates are also steep.
“It is not an easy environment . . . but if you do your homework systematically, then I believe you can identify very good opportunities,” he said.
Wiley said that despite the difficult operating conditions, all indications are that the DRC’s economy is moving forward. For example, there has been a noticeable improvement in Lubumbashi’s infrastructure during the time between his visit to the city in July 2010 and May this year. “The Chinese presence in the DRC is growing strongly. The investment by the Chinese in road infrastructure in the Katanga region has definitely started to pay off.”
He emphasised the importance of doing proper research before entering the country. “It took us about 18 months to research the potential in the property industry before we committed ourselves to establishing a business in the DRC. You need to do that research on the ground in the DRC, and make sure that you ask the right questions to the right people . . . you need to look at it in a hard-nosed business way.”
Wiley advised companies looking for information on business opportunities in the DRC to make contact with ANAPI, the country’s investment promotion agency, as well as the Fédération des Entreprises du Congo (FEC), the local chamber of commerce organisation.
CongoProp aims to assist companies with property-related requirements in Lubumbashi, a city close to the DRC’s copper mines. The firm’s first deal was when it helped South African glass retailer, PG Glass, to set up shop in Lubumbashi.
“We came to the conclusion that there was a good business case for the formation of a property services company to service the requirements of not only the local market, but also the South African business community wanting to establish itself in the DRC,” he explained.
Wiley noted that there are various reasons why investors in the DRC should take on a local partner. “It is a difficult regulatory environment to operate in. There are immense amounts of bureaucracy, which need to be dealt with. Unless you have credible partners who understand the legislative environment . . . it is something of a minefield.”
Without a local partner, individuals and companies operating in English might also find it difficult to do business in the DRC, where French is the lingua franca.