Doing business in the DRC: On-the-ground insight
One of the largest countries by land in Africa, the Democratic Republic of Congo (DRC) has vast potential for economic success based on the abundance of natural resources such as land, water, and minerals. However, the country has been faced with significant challenges related to political instability, high poverty rates, and recurring disease outbreaks. Djo Moupondo – chairman at independent music label and artist management company La Clique Music Group; executive board director of human resources firm Sodeico Holding; and CEO of consulting firm Sodeico Development – discusses what it’s like operating on the ground in the DRC. This article is an excerpt from The Africa List Business Barometer.
I think that there is a general optimism across the DRC and a key milestone has been the election and the transfer of powers. We now have a new government where 80% of the people are new.
But there is also a status quo in terms of business, as people do not know how things are going to develop. I see this period as a transitional period – there are some old powers still involved but on the whole, it feels like there is a new opening up across government. For example, there is a great will to develop new sectors in DRC; the insurance sector is being liberalised and they are keen to encourage this within the energy sector also.
The biggest challenges have continued to be the ongoing fallout from the political crisis in 2016 and economic problems. For a while, the objective was to try and ride out the crisis and although we work with multinational companies, it was still difficult to get new clients in a time of political uncertainty.
This meant that the group decided not to put all its eggs in one basket and diversify, making sure to push our developments in different countries across Africa.
However, Sodeico is 30 years old. As one of the oldest companies in DRC today, the majority shareholders are older. They are not always willing to invest and take on new challenges so that is a challenge as it means we sometimes have to give up a good opportunity. But we have to open the doors and show ourselves to Africa.
Currently, regulation bodies are operating more like tax policing agencies. In my view, a regulation agency is there to help, guide and punish if the rules are broken, not hide away and see where they can make companies pay more tax.
For example, the HR sector is not regulated. There are big companies that create an HR company in order to evade taxes. They do not have any policies, medical policies or social obligations and do not declare taxes. These companies are destroying the market and it makes it difficult to prosper as a clean company. This is where a regulator needs to come in and it needs to be done right.
Education system flaws
A lot of countries in Africa have the same problem with the education system. The whole educational programme is old and has never been upgraded. In DRC, the curriculum is over 60 years old and was implemented by the Belgians with only small changes since. The gap between education and real life has become huge and is growing.
We started a project creating a vocational academy that would provide specialist courses addressing the needs of the employment sector. We launched this as a pilot last year. The aim is that people will be productive in the workplace within six months, rather than after two years which is the current norm. We hope it will give us the opportunity to bring skilled people into the market.
The academy is also training existing professionals that need the continuous development and support in their career; you can help a company flourish by ensuring their senior executives have the skills they need to manage the company and its business.
The African market
I think it is useful to see Africa as one market and the countries within it as different segments of that market. Many big brands and companies have made the mistake of trying to enter the African market without realising that one strategy will not work everywhere. For example, before entering into Zambia, we made sure we got to know the market before launching.
The African Trade Resolution that was signed a few months ago will open up Africa. I think with this togetherness, Africa can become the strongest continent in 50 or 200 years. Africa will be able to take its true place in the world.
Brexit may also be considered a milestone as the UK is very involved in Africa. We may find a lot of companies in Britain start to turn and work more internally and it will all have an impact on Africa.