Copper is running 11 per cent above last year; beer, flour and power barely moved.

By Kanisa Magazine · August 2023

Congo’s mines are running well ahead of last year while the products households buy are barely moving. The BCC’s statistical digest of 30 August 2023 records 1,326,109 tonnes of copper in the first half of the year, a pace about 11 per cent above 2022, and next to it beer, soft drinks, flour and electricity within three per cent of last year’s run rate.

That gap is the real economy beneath the mining headline. The Central Bank’s own growth table pencils in 6.6 per cent real growth for 2023, close to the IMF’s November 2022 projection of 6.3 per cent. What the table cannot say is who feels it.

Two speeds in one digest

Copper pulled ahead of 2022 while household-facing lines stayed close to flat.

Doubling the half-year figures gives a rough annual pace to set against 2022’s totals. Copper comes out near 2.65 million tonnes against 2.39 million. Alcoholic drinks reach about 6.24 million hectolitres against 6.08 million, soft drinks about 2.69 million against 2.63 million, wheat flour about 218,000 tonnes against 215,000, and electricity about 13.4 terawatt-hours against 13.3. Port handling at Kinshasa, Matadi and Boma comes out near 1.88 million tonnes against 1.94 million, a small decline.

Doubling a half-year ignores seasonality, so treat the sums as direction rather than forecast. The direction is still clear: the mining line grows at double digits and the consumer lines at one to three per cent.

Why mining growth stays in the mines

A copper tonne creates dollars and royalties; a bottle of beer creates wages and shop margins.

Copperbelt output is capital-intensive and largely paid for in dollars. Gécamines itself contributed 2,533 tonnes of the half-year total, so the state’s direct production is a rounding error; the BCC attributes 1,323,576 tonnes to partners and other producers. The state’s share arrives as royalties, taxes and signature bonuses, which then have to be spent through a budget under pressure from security outlays. A Deskeco commentary puts security spending at 14 per cent of expenditure to May 2023 and describes unsterilised liquidity from emergency spending pushing on the franc.

Household demand depends on a different chain: wages, informal trade and remittances in francs. When the franc loses value, that chain is the one that shrinks in real terms.

The price squeeze on household demand

Inflation of 21.6 per cent since December outruns any wage round in sight.

The BCC’s national index rose 21.6 per cent between the last week of 2022 and the week of 21 to 27 August, and Kinshasa’s rose 29.6 per cent. Over the same stretch the indicative rate went from 2,016.57 to 2,465.66 francs per dollar, so imported food and fuel got dearer in francs. Food and non-alcoholic drinks carry the biggest weight in the basket, which means a household spends first on the items rising fastest. Volume growth of one or two per cent in drinks and flour is what that squeeze leaves.

On 8 August the Central Bank lifted its key rate from 11 to 25 per cent to neutralise excess liquidity. That helps the currency but also raises the cost of the working capital that small traders use.

A table that flatters per-head growth

The growth table holds the 2023 population flat, which makes per-head growth equal headline growth.

The same page lists resident population at 95,016.7 thousand for 2023 against 95,015.7 thousand for 2022, a growth rate entered as zero, after 3.0 per cent in each of the two previous years. With population frozen, growth per head reads 6.6 per cent, the same as the headline. Real GDP per head in 2005 dollars is shown at US$352.8, a figure that rests on a population estimate nobody has updated.

What a business should do with this

Plan sales on non-mining demand growing at low single digits, and plan supply on mining demand growing at double digits.

A supplier to the Copperbelt, whether in logistics, power, catering or equipment, can budget on volumes that track the mines. A consumer-goods company should budget on the digest’s one-to-three per cent and win on price architecture, smaller packs and dollar-linked pricing in Kinshasa and Lubumbashi. Anyone selling to both should keep the two forecasts separate rather than averaging them into one GDP number that describes neither customer.