Provisional 2020 data show the mine gate and the building site moving in opposite directions.

By Kanisa Magazine · January 2021

Eleven months of 2020 data from the Banque Centrale du Congo show two Congos growing at opposite speeds. Copper output reached 1,456,281 tonnes between January and November, 12.4 per cent above the same months of 2019, while cement fell 19.7 per cent to 990,769 tonnes. The mine gate and the building site, in other words, ended the year in different economies.

The BCC puts 2020 growth at 0.8 per cent, down from 4.4 per cent in 2019, and projects 3.5 per cent for 2021. Those averages hide the shape of the recovery, and the shape matters more to a business reader than the headline.

The ledger of winners and losers

Mining and oil rose, but cement, diamonds, flour and drinks all shrank.

In the BCC weekly digest of 27 January, provisional cumulative data to November show cobalt up 7.9 per cent to 78,200 tonnes and crude oil up 21 per cent to 9.0 million barrels. Against that, diamonds fell 20.7 per cent, with artisanal output down 25.4 per cent, and gold dropped 3.4 per cent. Wheat flour slipped 7 per cent, soft drinks 14.9 per cent and alcoholic beverages 7.4 per cent. Cement, the cleanest proxy for construction, lost nearly a fifth of its volume. Port handling in Kinshasa, Matadi and Boma rose 6.7 per cent to 1.63 million tonnes, which suggests that trade kept moving even as household demand weakened.

Why a mining boom does not lift the rest

Mines are capital-intensive and dollar-based, so most of their income never touches the domestic till.

A copper mine buys equipment abroad, ships concentrate or cathode abroad, and pays much of its bill in dollars. Wages, local contracts, taxes and royalties are the channels through which that money reaches households and shops. The World Bank’s October 2020 regional update expected real GDP of metals exporters in Sub-Saharan Africa to contract by about six per cent in 2020. The mining headline and the household ledger are linked by a thin pipe, and in a year of lockdowns that pipe carried less.

Where the farm and factory data point the other way

Cocoa and palm oil grew, while rubber collapsed, so some export crops are finding buyers.

Cocoa output rose 42 per cent to 34,481 tonnes, palm oil by 5.4 per cent and coffee by 3.8 per cent, while rubber dropped 44 per cent. Those swings show that crop-specific demand and logistics, not a general farm slump, set the outcome. For staples the story was different: in Haut-Katanga the provincial authorities were preparing to market locally milled maize flour because the province relies on imports from Zambia, as Zoom Eco reported on 30 January, with a 25-kilogram bag costing CDF 21,000 to 23,500, about US$11 at the indicative rate.

What the gap does to a company’s plan

Sell where the mine spends, not where the headline points.

A manufacturer or retailer planning on mining-led growth should separate two customer groups. The first is the mines and their contractors, whose volumes were rising and whose payments are in dollars. The second is households and small firms, whose demand was falling until at least November and whose purchases are priced in francs. Sales plans that treat the economy as one block will overstate the second group by roughly the distance between copper and cement.

The decision for the first half of 2021

Use cement, flour and drinks volumes as the early warning, not copper.

Operators should track those three series monthly as the cleanest read on household strength. Supply to mines, from fuel and catering to security and maintenance, offers the surer growth, and local content in those contracts is where a Congolese supplier can gain share. A forecast of 3.5 per cent growth in 2021 needs the second Congo to join the first, and the BCC’s own data say it has not yet.