The DRC conflict and the economic disruption it will have on Kenya

“Again” herein, does not refer to another war but an outburst of a serious military battle within a long drawn civil war. 

M23, an amorphous well-heeled and ambitious rebel group from the east of the DRC is the lead combatant within a coalition of other armed anti-government militias that are facing the defense forces of the DRC.   For the resource rich country and a former Belgian colony, peace has become a mirage and it remains a word that they only wish for but have never known since independence in June 1960.

The DRC, despite being within the central Africa region is a bona fide member of the East Africa Community (EAC) since April 8, 2022. The DRC formally joined EAC, as the seventh state, after the signing of the Treaty of the Accession into the EAC in Nairobi, Kenya. 

However, a lot is at stake as the new burst of military incursions by rebels into larger swathes of territory seems to not only put the regime of President Felix Tshisekedi on notice but has also orchestrated a dire humanitarian situation that is yet to be appraised in its entirety as the United Nations evacuated all its 16,000 employees to Uganda for safety reasons. 

The eastern city of Goma is at the epicenter of the war and its Airport has been closed to all air transport including humanitarian aid.  

The new round of intense fighting between DR Congo military bolstered by allies such as South Africa Defense Forces against the M23 led rebels has seen the eastern placed city of Goma fall even as riots by in other parts of the country, including Kinshasa, saw foreign embassies ransacked and looted by marauding gangs. 

Kenya, alongside other neighboring countries in eastern Africa, is feeling the impact of intense fighting in the long running civil war in the DRC. The renewed fighting has already sucked in regional actors, specifically Rwanda, which, the United Nations has singled out to the biggest supporters of the Tutsi-led M23 rebels. 

There has already been a serious fallout between the leadership in South Africa, which lost 14 soldiers when Goma fell into rebel hands a week ago, and Rwanda which it accuses of active participation in the ranks of the M23 incursions in the DRC. Tanzania lost two soldiers during the battle in Goma. 

The war in the DRC is compromising the actualization of a unified EAC and free movement of people, services and goods in the region.  

It has occasioned the widespread destruction of infrastructure, disruption of trade routes, displacement of populations, and a decline in investment, leading to extreme poverty and hindering the country's potential for economic growth across all sectors, particularly in the mining industry which is vital to the DRC economy; essentially, the conflict has severely impacted the country's ability to utilize its rich natural resources due to instability and violence. 

The Kenya business community has been very keen in the opportunities offered by the populous DRC. 

On November 29, 2021, when the DRC was still an observer state within the EAC, a delegation of more than twenty-six Kenyan firms flew out to Goma, in the Democratic Republic of Congo for a trade mission spanning two weeks. 

This was organized by the authorities in Kenya and the DRC in liaison with the Equity Group, which already has a footprint in the DRC. Equity Group is the holding company for Equity Bank, which is one of the biggest Banks in the Kenya but with a thriving network in eastern Africa region including Uganda, Tanzania, Rwanda, South Sudan and the DRC. 

Equity Bank set foot in the DRC in 2015 and since then other Kenyan businesses have come on board. Kenya Commercial Bank (KCB) through purchase of the Trust Merchant Bank in DRC to offer banking services. 

Other Kenyan companies with operations in the DRC include Rentco Africa Limited, Optiven Group, Greenlight Planet Limited, BDO East Africa Limited, Greenlight Planet Limited, Jumbo Foam Limited, BIDCO Limited, and Geomaps Limited among many others. 

In April 2022, Kenyan firms committed to invest over $ 1.6 Billion in the DRC in various projects and sectors.

Indeed, over the past two years, the DRC has singularly been the most profitable market for Kenyan subsidiaries, beating Rwanda, within the EAC community region, and thereby cementing its importance to their performance. 

Kenya and DRC have in recent years shown mutual desire to deepen their trade ties and this has resulted in more DRC goods passing through the port of Mombasa all the way to Goma. The DRC, in mid-2022, became the third-largest source of traffic at the Port of Mombasa. 

Over a considerable period, the DRC has been a vital export destination for Kenya because the long civil strife has disrupted DRC’s socio-economic activities. This scenario has, over time, enabled many Kenyan merchants to provide goods, food produce and services to the citizens of DRC particularly in the eastern parts of the country. 

The City of Goma, to the extreme eastern part of the DRC, is a whopping 2,622.8kms by road to the capital city Kinshasa. Compare this to the fact that the City of Goma in DRC, is closer to the port City of Mombasa by road which is 1,644.8 kilometers away yet Kenya does not share a common border with the DRC. 

As such, the city of Goma in DRC relies more on the port of Mombasa than it does from its local city of Matadi, which is the main port for the DRC on the Atlantic sea coast.