Democratic Republic of the Congo: material confidence in political-economic outlook

While voters in and observers of the Democratic Republic of the Congo await definitive results from the country’s December 30 presidential election, other interested stakeholders are not. Notably, the Hong Kong-listed China Molybdenum Co. Ltd (CMOC) announced January 18 a $1.14 billion agreement to increase its ownership share of the Congo’s Tenke Fungurume copper and cobalt mining complex. The move signals confidence in the Congo’s policy continuity and outlook no matter the elections dispute and diplomatic pressure against the Congo government.

The purchase agreement by China Molybdenum of a 24% stake held by BHR Newwood DRC Holdings will raise its overall ownership of the Tenke mining complex to 80%, with the balance held by the Congo state-owned Gecamines mining company. The purchase agreement consolidates China Molybdenum as one of the Congo’s most strategic foreign investor and mining sector partners, given the importance that Tenke represents for the country’s copper and cobalt production output. Tenke will likely be responsible for producing upwards of 20,000 tons of cobalt in 2018, roughly one-fifth of the country’s total. As for copper, Tenke may see its 2018 output coming in at 165,000-170,000 tons, also roughly one-fifth of total Congo output. Only Glencore is a larger producer of copper and cobalt in the Democratic Republic of the Congo. 

The timing of the China Molybdenum purchase agreement comes directly amid significant diplomatic pressure on the government of the DRC to moderate its handling of the country’s disputed presidential election held on December 30. Most recently, the African Union convened a high-level head of state meeting in Addis Ababa to deliberate on concerns as to the conduct of Congo’s elections. The African Union called for Congo electoral authorities to delay the release of final presidential election results so as to provide for confidence that the electoral outcome will conform to results some observers hold to be vastly different from what has been provisionally stated.

Unsurprisingly, the Congo government has rejected the African Union communication, stating it to be a flagrant interference in Congo’s internal affairs. Such a denouncement is consistent in national affairs in Africa facing continental oversight: the African Union, and its predecessor the Organization of African Unity (OAU) was founded upon a pan-African consensus holding for non-interference in the internal affairs of its African member states. From the founding of the OAU (and it’s later becoming the African Union), African governments were and remain highly sensitive to the threat of being destabilized by external forces, whether colonial or not.

Rather than concede matters of sovereignty and governance to foreign powers, the government of outgoing President Joseph Kabila holds that Congo institutions are the correct and only venues to resolve the presidential election that is being principally contested by Martin Fayulu of the opposition Lamuka alliance. Fayulu is appealing his second-place result of December 30, in which he secured 35% of the provisionally-released results, against 39% won by rival opposition candidate Félix Tshisekedi, of the Union for Democracy and Social Progress (UDPS) party, who has been declared the provisionally-elected president of the Congo. Candidate Emmanuel Ramazani Shadary of the incumbent government’s Common Front for Congo (FCC) alliance came in third place with 24% of the provisional outcome. Shadary has not contested the outcome and has conceded to Tshisekedi. Fayulu has claimed to win 61% of the vote, and his appeal of the provisional results released by Congo’s independent electoral commission is being heard by the country’s Constitutional Court.

The Constitutional Court may issue their ruling on the December 30 elections anytime between now and January 22, in compliance with legal provisions. Considerations before the Court may provide for a ruling asserting the provisional results valid, but could also find that extensive irregularities may require a full vote recount, which would align with a call by some leaders in the African region. The Congo government is, however, on record rejecting calls for a vote recount.

What is next is a clash of political norms, what with a delegation of African Union leadership, including Rwandan President Paul Kagame and African Union Chairperson Moussa Faki Mahamat, scheduled to arrive in Kinshasa on January 21 to try to mediate the post-election dispute. The Congo government will assert the defense of its sovereignty and the right of its own institutions to resolve the country’s domestic, electoral dispute. The African Union will have to judge whether contravening the principle of non-interference in the internal affairs of a member state is necessary to resolve Congo’s electoral dispute. 

The outgoing Kabila administration is not likely to budge to foreign pressure, and their position is likely informed by a view the Congo has been far too long a victim of external interference. The African Union delegation likely won’t be seen as constructively neutral, given concerns in Kinshasa over Kagame’s trustworthiness and the Rwandan government’s perceived biased interests in the Congo. Given the relative smooth engagement between the outgoing Kabila government and the provisionally-incoming Tshisekedi administration, governing institutions in Kinshasa may resolve to ignore foreign pressure and proceed to a definitive validation of the provisional outcome as a matter of asserting the defense of Congo’s sovereignty. 

Which brings us back to policy continuity and the outlook for Congo’s political economy. There has been little substantive difference in the policy platforms held by the outgoing Kabila administration and the Tshisekedi-led UDPS party. Notably, Tshisekedi has lauded Kabila for his conduct and performance in restoring Congo’s integrity. No controversy is held toward the country’s new Mining Code passed in 2018 that dramatically raised royalty rates, introduced new windfall taxes, and cut concessions granted earlier to foreign mining companies operating in the Congo. For his part, Fayulu has campaigned little on the country’s mining sector either and campaigned instead promising good and inclusive governance, social liberalism, and political reconciliation.

Given that the focus in the Congo has largely been of an electoral order, and that the Kabila administration has gained uncontroversial – insofar as its domestic constituencies are concerned – confidence from experiencing expanding mining sector export production levels and raised revenues to the government, the policy outlook for the country’s successor government that has been one of continuity is made further valid by the China Molybdenum $1.14 billion vote of confidence.  

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