The Democratic Republic of Congo was officially admitted to the East Africa Community (EAC) Tuesday during an Extraordinary Summit of EAC Heads of State chaired by President Uhuru Kenyatta. This is a game-changer for intra-regional trade.
EAC heads of state had unanimously voted to admit DR Congo into EAC on December 22 last year.
This followed a preliminary discussion about the DRC’s application at a summit on February 27, 2021.
Seven heads of state had directed the council of ministers to commence and conclude negotiations with the DRC for admission to EAC and report to the subsequent summit which was held early this year.
The mineral-rich country has officially become part of the seventh member state of EAC after the Republics of Burundi, Kenya, Rwanda, South Sudan, the United Republic of Tanzania, and the Republic of Uganda.
What it means for Kenya
The EAC has a population of 90 million people.
The entrance of the DRC brings the total population to 280 million people, spanning the Indian and Atlantic Oceans. This vast market will help everyone since the DRC will be able to readily buy and sell to the rest of East Africa, which will benefit its people.
Harnessing idle resources is a realistic option with no negative consequences for the DRC or the region. A power dam at Inga, for example, would provide 60,000MW of clean, renewable energy and put an end to the discussions and headaches over whether or not to build hydroelectric dams in East Africa.
The mineral resources of DRC and the wider EAC market would make rapid industrialisation of the Congo possible, with skilled manpower from the region also available as a local resource.
DRC has a large market with statistics from Comtrade showing that EAC countries exported goods worth Ksh.96.6 billion to the DRC in 2018.
However, a report published in June 2020 by the East African Business Council revealed that despite its geographic proximity, the EAC’s trade with the DRC is surprisingly very low.
Over the last seven years, the proportion of EAC exports to the DRC has averaged 13.5 percent of the country’s total imports bill.
Southern African Development Community (SADC) countries such as South Africa and Zambia have captured a big share of the DRC’s market, the report said.
South Africa exported goods worth Ksh.113 billion while Zambia exported goods worth Ksh.97.8 billion in 2019.
SADC will in coming years, be competing with Kenya following admission of DR Congo to EAC. This is because Kenya, during the tenure of President Kenyatta, has inked a number of trade deals with President Félix Antoine Tshisekedi to bolster trade ties between the two nation.
In April 2021, Uhuru and Tshisekedi witnessed the signing of a partnership agreement between Kenya Airways and Congo Airways for aircraft maintenance, training and sharing of excess capacity.
Also included in the two-year agreement, whose overarching objective is the viability and sustainability of the airlines, is a route and code sharing provision aimed at expanding the carrier’s domestic, African and international networks.
Kenyan-owned lender Equity Bank already has positioned its foot in DR Congo.
Equity first entered into the DRC in September 2015 after acquiring a 79 percent stake in SME-focused ProCredit Bank in a Ksh.4. 5 billion share swap deal that saw it issue 70.8 million shares to investors in the subsidiary.
In 2020, the bank followed up with acquiring 66.53 percent stake in BCDC.