The BCC’s Kinshasa index shows food, transport and communications driving June while rents and health barely moved.

By Kanisa Magazine · June 2023

Congo’s household price pressure in June 2023 was not one number but a fan of them. The Banque Centrale du Congo’s weekly retail index for Kinshasa rose 2.6 per cent in the six weeks to 23 June, yet meat climbed 4.5 per cent, communications 4.8 per cent and transport 3.7 per cent, while rents and health barely moved. A household’s June depended on what it buys, and on whether the price is set in dollars.

The backdrop was a franc that slid from CDF 2,082.99 per US dollar on 28 April to CDF 2,316.47 at the end of May and CDF 2,389.58 on 23 June, according to the BCC statistical digest of 28 June. That is a fall of roughly 13 per cent in the franc’s value in eight weeks, and it landed on a basket that is mostly imported or import-priced.

Food carries the weekly bill

Nearly two-thirds of each week’s price rise came from food and drink.

The BCC’s contribution chart for the fourth week of June puts food and non-alcoholic beverages at 65.11 per cent of weekly inflation, transport at 12.23 per cent and housing, water and energy at 9.58 per cent. Together they explain almost nine-tenths of the movement. Education and leisure contributed nothing at all.

Inside food the spread is wide. Meat moved from an index of 270.8 to 282.9, fats and oils from 158.3 to 166.2, and bread and cereals only from 181.4 to 185.5. Fish, largely frozen and imported, was almost flat at 191.5, which suggests stock bought at an earlier exchange rate was still clearing. Weekly readings in the Kinshasa series ran from 0.69 per cent in the first week of the table down to 0.36 per cent in the week to 23 June, so the pace was easing even as the level climbed.

Transport and the pump-price reset

Fuel is the one price the state sets, and it was reset in the middle of the slide.

On 7 June the Vice-Prime Minister for the National Economy signed an order fixing a new pump-price grid for the western zone, as La Prospérité reported on 8 June. The BCC’s transport index went from 207.1 to 214.8 across the period, the fastest move among the big household groups after food. Electricity, gas and other fuels, by contrast, rose only 1.3 per cent, because tariffs are administered rather than repriced weekly.

That split is the mechanism worth watching. Where a seller restocks in dollars every week, as with imported meat, wheat and spare parts, the franc price follows the exchange rate within days. Where the price is administered, such as power tariffs, or contractual, such as rents (up 1.7 per cent), the adjustment is postponed, not avoided. Postponed adjustments tend to arrive in steps, and a step is harder on a household than a slope.

Provinces feel the supply side first

Away from Kinshasa, scarcity and logistics add to the exchange-rate effect.

In Mbuji-Mayi, Radio Okapi reported in May that a loaf had risen from CDF 500 to CDF 800 in two weeks. Bakers blamed missing electricity and the difficulty of moving wheat flour by rail on the national railway company’s wagons. No exchange rate explains a 60 per cent jump in a fortnight; a broken supply line does. The BCC’s national price series for June therefore blends two different stories, a currency story in the capital and a logistics story in the interior.

What a business reader should do with this

Price to replacement cost, and read the index by basket, not by headline.

A retailer or manufacturer selling to Congolese households should rebuild its price list around the components that actually move: imported protein, fuel-linked freight and communications. Contracts for rent and utilities are the ones likely to reprice next, so treasury plans for the second half should assume they will. Wage negotiations deserve the same discipline, because a headline of 0.4 per cent a week hides food-heavy baskets that are running well above it.

For lenders and insurers, the practical signal is dispersion. When the spread between the fastest and slowest basket lines is this wide, a single inflation assumption misprices both. The BCC’s decision on 19 June to raise its policy rate was aimed at the exchange rate; the June price data show why the transmission would still take weeks to reach the till.