DRC struggles to realise mining potential
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January 2014
Mining has had a significant macro-economic impact on the Democratic Republic of Congo, accounting for 12% of the country’s GDP, one-sixth of all formal employment and a tenth of public sector revenues. Foreign investors have been critical to the sector’s growth, but have become substantially less willing to invest in mining in the DRC relative to other countries, according to a study by OPM. 

The study – based on the International Council on Mining and Minerals’ (ICMM) toolkit and benchmarking of investor perceptions – highlighted the need to: 

Ensure a stable and fair policy environment for investors. A stable policy regime, government can help firms take the long-term investment decisions that generate the contributions discussed in this report. Conversely, any changes to the mining policy that slow the rate of investment will have knock-on effects on direct as well as indirect and induced impacts. 

Create a shared vision for linkages between mining companies and local businesses, supported by capacity development. Localisation of employment and procurement can have significant multiplier effects and diversify the economy to reduce dependence on mining. A first step is to develop a shared vision for building industrial linkages with the sector. President Kabila’s recent ‘5 chantiers’ initiative, which prioritises developments such as infrastructure projects, is an encouraging move in this direction. 

Strengthen the governance of public sector institutions. The potential for mining to catalyse development depends on the DRC government’s ability to effectively manage the sector, across the entire resource governance ‘decision chain’, from collection of revenue to decisions on spending and execution of public projects. Recent initiatives, such as the Prime Minister’s new website for companies to report burdensome tax and administration procedures, show that the government is willing to address these issues. 

The findings of the study were delivered by OPM Associate Professor Olle Ostensson at the 9th Annual iPAD Conference in Kinshasa, DRC, on 11 October 2013. The presentation was covered by the local media.

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DRC struggles to realise mining potential

January 2014
Mining has had a significant macro-economic impact on the Democratic Republic of Congo, accounting for 12% of the country’s GDP, one-sixth of all formal employment and a tenth of public sector revenues. Foreign investors have been critical to the sector’s growth, but have become substantially less willing to invest in mining in the DRC relative to other countries, according to a study by OPM. 

The study – based on the International Council on Mining and Minerals’ (ICMM) toolkit and benchmarking of investor perceptions – highlighted the need to: 

Ensure a stable and fair policy environment for investors. A stable policy regime, government can help firms take the long-term investment decisions that generate the contributions discussed in this report. Conversely, any changes to the mining policy that slow the rate of investment will have knock-on effects on direct as well as indirect and induced impacts. 

Create a shared vision for linkages between mining companies and local businesses, supported by capacity development. Localisation of employment and procurement can have significant multiplier effects and diversify the economy to reduce dependence on mining. A first step is to develop a shared vision for building industrial linkages with the sector. President Kabila’s recent ‘5 chantiers’ initiative, which prioritises developments such as infrastructure projects, is an encouraging move in this direction. 

Strengthen the governance of public sector institutions. The potential for mining to catalyse development depends on the DRC government’s ability to effectively manage the sector, across the entire resource governance ‘decision chain’, from collection of revenue to decisions on spending and execution of public projects. Recent initiatives, such as the Prime Minister’s new website for companies to report burdensome tax and administration procedures, show that the government is willing to address these issues. 

The findings of the study were delivered by OPM Associate Professor Olle Ostensson at the 9th Annual iPAD Conference in Kinshasa, DRC, on 11 October 2013. The presentation was covered by the local media.