YEAR IN REVIEW: When expansive DR Congo opened up to the rest of EAC

The year 2022 saw the Democratic Republic of the Congo (DRC) become the seventh member of the East African Community (EAC).

Thanks to DRC’s membership, the East African Community now extends from the Indian Ocean to the Atlantic Ocean presenting countless opportunities for both the bloc and the DRC.

The EAC’s member states are now Burundi, Kenya, Rwanda, South Sudan, Tanzania, Uganda, and the DRC. The Community was established in 1967 and “re-established” in 2000.  Christophe Lutundula Apala Pen’ Apala, the DRC’s vice prime minister and minister of foreign affairs, described the EAC as “the most integrated bloc on the entire African continent.”

Jonathan Ang’ani Omuchesi, a lecturer in Governance and Regional Integration at the Catholic University of Eastern Africa, says the DRC’s membership provides the EAC states with access to the Atlantic coast.

This access is an important development since, up until 11 July, EAC countries needed to utilize Indian Ocean-based ports in Kenya and Tanzania; and an obvious problem with these options is piracy off the Somalia coast. Kenya’s defence and security forces have taken a solid stance to combat piracy, but the problem continues.

What does each side gain?

Additionally, he also explains that the DRC will expand the EAC’s size since “the DRC’s geographical area is far much larger than all the six East African states put together.” The DRC’s territory is 2.4 million sq km, while the bloc, before the DRC’s membership, was about 1.8 million sq km.

In addition, the Congolese population (approximately 92 million) is also now part of the EAC, while the country has vital minerals like copper, coltan, cobalt, and uranium. This exponential growth of the bloc’s population and available resources will make the EAC more attractive for potential partners for trade and investment opportunities and “boost East Africa’s profile as an investment destination.”

As for what the DRC obtains from joining the Community, the gains are mainly economic since the country “will no longer be subjected to customs taxes at any of the region’s border points,” Scott Morgan, an analyst of African affairs and president of the consulting firm Red Eagle Enterprises, explained to the author.

He adds: “Most of the DRC’s key markets, such as Bukavu and Goma, are geographically closer to the Kenyan port of Mombasa than the Atlantic Ocean.” Therefore, open borders via the EAC could reduce shipping and receiving commerce time. “This could be a huge benefit to a country that needs assistance with infrastructure projects.”

In other words, the Community and the DRC can gain much from this new level of integration. As the World Bank argues, “regional integration in Africa … can play a vital role in diversifying economies away from dependence on the export of just a few mineral products; in delivering food and energy security; in generating jobs for the increasing number of young people; and in alleviating poverty and delivering shared prosperity.”

Kenya’s KCB Group already began operations in the vast DRC market after its acquisition of a majority stake in the Trust Merchant Bank (TMB) received a nod from regulators, allowing it to expand its services into one of the continent’s most populated countries.

Uganda launches one-stop border post with DRC

Ugandan President Yoweri Museveni has since ordered a waiver on the requirement for visas for Congolese citizens entering Uganda.

“Crossing in East Africa should be cost-free. You pay a visa when going to America, or Europe but a visa to DRC! That is rubbish. If that is the case, I have removed it,” Museveni said.

The President directed as he spoke to locals at the Mpondwe Uganda-Democratic Republic of Congo (DRC) border shortly after commissioning phase one of the Mpondwe-Lhubiriha Border Export Zone (Market) and Mpondwe One Stop Border Post in Kasese district.

Museveni’s directive followed complaints by locals that they are charged shs10000 to go to DRC and the same amount for Congolese citizens entering Uganda.

PSFU chief executive officer, Mr. Stephen Asiimwe, said the entry of DRC into the East African Community now provides the Uganda business community with an opportunity to trade in a market that has a population of more than 90 million people.

The Uganda business community, he said, was yet to take full advantage of the opportunities that arise out of DR Congo, noting that it is also important to engage in high levels of innovation and creativity to diversify exports beyond food commodities and informal cross border trade.  

“We can maximise trade by developing deeper links between domestic producers and external markets such as DR Congo. The country has a population of over 90 million people, which provides a big business opportunity,” said Asiimwe.

Uganda’s trade with DRC has been growing over the years, increasing by an average of 10% annually. During 2017, for instance, Uganda exported goods worth $188.98m to DRC while imports from DRC to Uganda stood at $156.5m. However, this has exponentially grown, with Uganda’s exports to DRC increasing to $338.56 Million in 2021.

“The DRC is one of Uganda’s biggest trading partners in East Africa, with Uganda exporting mainly cement, palm oil, beer, sugar, iron and steel, rice, iron, and steel (scrap), cocoa beans, and natural rubber,” said Hon. Francis Mwebesa, the Minister of Trade. “Uganda and DRC have been working together to improve trade, through a number of initiatives that include a joint agreement, in which Uganda agreed to support the construction of a 223-kilometer road project linking the two countries. The roads, among others, are expected to boost cross-border trade, improve security, and connectivity, and deepen integration,” he added.

Asiimwe said Uganda is strategically positioned to gain from the already existing good relations between the two countries, especially on cross-border trade and investment which are expected to blossom due to continued improvement in transport and logistics.

Looking ahead

The EAC’s priorities for the 2022-2026 period include the full implementation of the Single Customs Territory (SCT); enhancing the domestication and implementation of regional commitments in line with the EAC Common Market Protocol; attaining an EAC Single Currency; and strengthening regional peace, security and governance.

While these are admirable goals, some of the more ambitious objectives may be hard to reach. One example is the EAC Single Currency.

“The DRC is one of Uganda’s biggest trading partners in East Africa, with Uganda exporting mainly cement, palm oil, beer, sugar, iron and steel, rice, iron, and steel (scrap), cocoa beans, and natural rubber. Uganda and DRC have been working together to improve trade, through a number of initiatives that include a joint agreement, in which Uganda agreed to support the construction of a 223-kilometer road project linking the two countries. The roads, among others, are expected to boost cross-border trade, improve security, and connectivity, and deepen integration,”

Francis Mwebesa, Minister of Trade

 The East African Monetary Union (EAMU) Protocol was adopted in 2013, which “lays the groundwork for a monetary union within 10 years and allows the EAC Partner States to progressively converge their currencies into a single currency in the Community.” However, it is unclear if the DRC’s membership will force the EAC to re-adjust its goal for a Single Currency, which is currently scheduled to occur in 2023.

Challenges

The DRC’s membership also came with a set of challenges. Membership in the East African Community occurs at a sensitive time for the DRC, as the country experiences a strong wave of violence in its Eastern provinces. The country is also at odds with neighboring Rwanda, a fellow EAC member, due to allegations of governments supporting M-23 insurgents in the DRC. Thus, the EAC must do its part to promote peace between its member-states to maintain bloc unity.

At least member states of the bloc have started deploying a regional security force, led by Kenya and Uganda, to the Eastern DRC.

There are also tensions and disagreements between member states concerning trade and tariffs.

According to Fibre 2 Fashion, a publication about the textile industry, EAC members are “lacking a consensus over preferential Rules of Origin and tariffs on textile and apparel and goods produced in special economic zones (SEZs).” Some EAC member states, including the DRC, according to the publication, support the position of the African Continental Free Trade Area’s (AfCFTA) Secretariat; “Rwanda is undertaking internal consultations to joining them, while South Sudan and Tanzania are split on the review terms as they seek to allow more imports.” Adding one more seat to the proverbial table may complicate reaching a consensus over tariffs and future trade agreements.

The Democratic Republic of the Congo’s membership in the East African Community comes at a critical time, both globally, regionally, and domestically. The world faces energy and food crises due to the Russian invasion of Ukraine. There are also tensions between the DRC and neighboring Rwanda due to violence in Eastern DRC regions caused by the M23 movement.

Joining the EAC membership will give the bloc access to the Atlantic Ocean and raise its image among potential extra-regional partners. Reduced tariffs and customs will similarly help the DRC’s economy. Moreover, the inhabitants of Congo’s Eastern areas can now reach the Indian Ocean via Tanzania.

All EAC members have plenty to win from having the DRC in the bloc. Still, foresight and leadership are necessary to ensure that the East African Community’s expansion is a win-win situation.