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DRC: the challenges of outsourcing for the emergence of the middle class

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Congolese subcontracting still has some way to go. Major challenges are to be met. If the State, in its branches, has the obligation to ensure the rigorous implementation of the law in force; Congolese companies benefiting from this exclusivity will have to improve the quality of their services, pool their efforts and acquire the technical and financial skills required to merit the markets in the face of foreign competition.

This is the conclusion reached by the panelists of the session focused on the impact of the Mining Code on Congolese companies, as part of DRC Mining Week activities, this Thursday, June 20, 2019 at the Karavia Hotel in Lubumbashi.

Indeed, the director general of the Subcontracting Regulatory Authority, Ahmed Kalej Nkand, has circumscribed the origin of the law on subcontracting which is one of the innovations of the new Mining Code. Because, the legislator’s concern, by establishing this Law, was based on a bitter observation.

« There has been a positive evolution of mining companies and others. Unfortunately, it did not have an impact on the social. The unemployment rate is still high, foreign companies, settling, take their foreign labor to the detriment of nationals who languish in misery. Hence, the adoption of this law which is forced any foreign company to resort to Congolese subcontracting », he said.

Outline of this law

The Law on Subcontracting is intended to make the subcontracting of ancillary and related activities of the main activity mandatory and to reserve, whatever its nature, Congolese companies with Congolese capital in order to promote them. and thus promote the emergence of a Congolese middle class.

It pursues the protection of the labor force working in subcontracting companies, the creation of employment for nationals and the broadening of the tax base for the benefit of the public treasury.

This law also sets the conditions for contracting out. In particular, you must have a Trade and Furniture Credit Register, a national identification and a tax number; produce a document stating that he is in good standing with the tax authorities; present affiliation to a social security organization. It sets out rights and obligations of two parties. It also determines the social, fiscal, customs, commercial and financial system.

Responsibilities of the parties

On the one hand, the Congolese state in its various branches, including the Subcontracting Regulatory Authority, has the obligation to ensure scrupulous compliance with the law in all sectors of national life, including the mining sector. . It should be able to sanction companies that fail and / or violate legal and regulatory texts.

On the other hand, Congolese outsourcing companies also have the responsibility and the obligation to improve the quality of the services offered to large companies to fill the deficit they face in the face of foreign competition.

In this regard, Louis Watum of Ivanhoe Mines lamented the lack of research in the head of Congolese entrepreneurs to improve the quality of their offers. Also, he insisted, those concerned should have a vision to anticipate the needs of the prime contractor and meet the challenge of raising capital.

Participants and panelists converged for the federation of efforts of outsourcing companies in lieu of unsuccessful bidding. The pooling of skills, services, expertise and financial means would allow Congolese subcontractors to win big markets together rather than lose them massively each at its level. will continue to lose big markets.

One of the panelists recommended Congolese subcontractors to take inspiration from the example of the Kibali Mines subcontractors, successful model of the recourse of the local content, who built their last hydroelectric plant.

As a reminder, at the opening ceremony of the 2019 edition of DRC Mining Week, the governor of the province of Upper Katanga, Jacques Kyabula Katwe also insisted on the need to ensure strict compliance with the Law on the sub -traitance.

« The theme announced for the beginning of the work of this 15th edition (Rethinking the traditional mining model in the new era of metals) seems very important to me. Let’s not forget that we have to support the nationals through the law of subcontracting. Our young people must benefit from their basement », he said.

Nadine FULA

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DRC: the « education » project will be submitted to the WB Board of Directors in February 2020

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DRC: Education project to be submitted to World Bank Board in February 2020

The Government’s emergency project on free « Basic Education » will be submitted to the World Bank’s Executive Board in February 2020. According to the Vice President for Africa, Hafez Ghanem, preparations are being intensified to ensure that this deadline is met.

« We are working very quickly on this education project. And we plan to bring this project to our Council as early as February. Regarding the height of the amount, we are in the process of making evaluations. It’s going to be a big amount, around a billion US dollars, » he told reporters at the end of his meeting with the Congolese delegation led by Finance Minister José Sele Yalaghuli.

Indeed, this emergency project is part of World Bank support for the Government’s efforts to provide free basic education, the implementation of which began last September.

To relieve the pressure on public finances to allocate at least US$25-37 million each month, the World Bank has pledged to support the Congolese Government in this regard.

https://twitter.com/Zoom_eco/status/1184909044315758593?s=20In line with the commitment of the Head of State, Felix Antoine Tshisekedi, and the President of the World Bank, David Malpass, the Minister of Finance, José Sele Yalaghuli, has clearly indicated the Congolese Government’s firm desire to see the process speed up so that funds are released within an acceptable time frame.

« This is the right time for the partners of DR Congo to match the real political will of the Congolese national executive to meet one of the aspects of the World Bank’s mandate, namely: the fight against poverty, » he said at a previous meeting with the World Bank delegation led by Jean-Christophe Carret.

With regard to the health coverage programme, Hafez Ghanem reiterated his institution’s commitment to continue working alongside the Democratic Republic of Congo, particularly in the fight against Ebola.

 

He added: « We will also work with the Government on a new health programme to strengthen basic health centres and improve access to health across the country. »

However, he gave no indication of the amount of funding for this health programme, especially since it is currently under study.

As a reminder, the delegations of DR Congo and the World Bank held a working meeting on Thursday 17 October 2019 in Washington DC. Experts from both sides, led by José Sele Yalaghuli and Hafez Ghanem respectively, reviewed ongoing projects within the World Bank portfolio and those under preparation.

In addition to education and health, projects related to infrastructure, connectivity (roads) and the digital economy were also discussed.

Eric TSHIKUMA, from Washington

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DRC: the three axes of the Accelerated Programme to Combat Poverty and Inequality

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DRC: the three axes of the Accelerated Programme to Combat Poverty and Inequality

The President of the Republic launched his Accelerated Programme to Combat Poverty and Inequality in Kinshasa on Wednesday 16 October at the site of my valley in the commune of Mongafula.

This Programme aims to ensure that twenty million Congolese living in rural and peri-urban areas in the 145 territories of our country leave poverty or extreme poverty within the next 5 years.

It has three components: improving rural and peri-urban populations’ access to basic socio-economic infrastructure and services; promoting rural and peri-urban economies; and building capacity in managing for development results at the national, provincial and local levels.

The first component aims to increase the population’s access to basic services such as housing, electricity through the promotion of micro hydroelectric power plants, drinking water, health and agricultural access roads. This list is not exhaustive.

The second component aims to ensure that people in villages and peri-urban neighbourhoods have improved and stable sources of income and that they consume at least one balanced meal per day. This component will place particular emphasis on promoting inclusive agricultural sectors.

The third component aims to develop a culture of autonomy, which will result in the appropriation of development by the beneficiary populations, the strengthening of self-esteem, meritocracy and a motivated attachment to their living environment.

Substantial resources for this ambitious program!

« The Programme, the main components of which I have just unveiled, requires ambitious funding over several years, » said Félix Tshisekedi, aware of these challenges. In the face of such an ambition, the Head of State asks the Government to spare no effort to explore all possible avenues likely to provide the means for this saving action for the people.

It is with this in mind that the last Council of Ministers adopted the hypothesis of a budget reaching the 10 billion mark.

In addition, Félix Tshisekedi intends to engage the country in far-reaching reforms ranging from the rebuilding of the state with justice as the epicentre to the sectors of national life.

This is how he makes his main focus the fight against anti-values, particularly corruption, embezzlement of public funds, tax fraud, smuggling and tribalism. And all means will be used to ensure that all State revenues are channelled into the Public Treasury.

Finally, to make this programme a success, the President of the Republic is counting on the involvement of all his compatriots, beyond the divisions.
political.

Harris Kasongo

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DRC: Economic and financial situation at the heart of a meeting at the World Bank

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DRC: Economic and financial situation at the heart of a meeting at the World Bank

The economic situation in DR Congo is the focus of a meeting on Thursday 17 October 2019 at the World Bank’s headquarters in Washington DC. The Minister of Finance, José Sele Yalaghuli, leads the delegation of Congolese experts.

In his presentation, the national silversmith described a macroeconomic framework for DR Congo that has remained stable.

Despite accumulated deficits of 420 billion Congolese francs at the end of September 2019, domestic prices and the exchange rate fluctuated slightly. And at this rate, the Government reports inflation of 4.2% at the end of December 2019, which is below the 7% end of period forecast level.

Referring to the strategic and political orientations of the Government of the Democratic Republic of Congo, Minister Sele Yalaghuli cited in particular the tightening of public spending in order to limit deficits and the subscription of treasury bonds with the ambition of mobilizing 150 billion CDF by the end of 2019 to fill the gaps.

The first results are promising, especially since a small monthly budget surplus was recorded at the end of September 2019.

Moreover, added Sele Yalaghuli, the third orientation concerns the Government’s firm commitment to pursue the implementation of reforms with the support of partners to remove obstacles sector by sector and to be able to remedy them.

With regard to cooperation between the Congo DR and the Bretton Woods institutions. After the break-up of the formal programme with the IMF in 2012, the ongoing recovery strategy of the current discussions is based on two options.

First, the interim program. Then, the formal program. If the first one will cover the preparation period of the second one, the conclusion of the formal programme could take place after the third quarter of 2020.

« This is the right time for the partners of DR Congo to match the real political will of the Congolese national executive to meet one of the aspects of the World Bank’s mandate, namely: the fight against poverty, » José Sele Yalaghuli said, addressing the World Bank delegation led by Jean-Christophe Carret.

With the World Bank, experts from DR Congo are working on preparations and options to initiate disbursement of funds for the Government’s priority sectors on are: basic education and universal health coverage.

This interaction with World Bank teams continued, with Hafez Ghanem, Vice President in charge of the Africa region, as the focus.

Eric TSHIKUMA, from Washington DC

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