Treasury receipts, brewing and port volumes show demand outside the mine gaining ground in October.

By Kanisa Magazine · October 2021

Copper above US$10,000 a tonne is the October headline, but the better evidence that the Congolese economy is moving beyond the mine sits in the state’s own accounts. By 22 October the Treasury had booked CDF 10.68 trillion of revenue for 2021, according to the BCC’s digest of 27 October, against CDF 8.34 trillion for the whole of 2020. The tax directorate alone, the DGI, had collected CDF 5.07 trillion, 41 per cent more than in all of last year.

That is a nominal figure, so it needs deflating, and the deflator is small. Prices in Kinshasa had risen 3.8 per cent from January to the week of 22 October, and the franc had moved about one per cent. Most of the jump is real, and no mine alone pays it.

Taxes, customs and the gap with 2020

Customs receipts are 19 per cent above last year’s total, which implies more goods crossing the border.

The DGDA, which collects customs, stood at CDF 2.42 trillion against CDF 2.03 trillion for 2020, and DGRAD, the non-tax revenue directorate, at CDF 1.52 trillion against CDF 1.19 trillion. The Treasury ran a cumulative surplus of CDF 1.22 trillion, where 2020 ended in a deficit of CDF 238 billion. Mining firms pay corporate tax, royalties and export duties, so part of the DGI line is theirs. But customs duty falls on imports of food, vehicles, building materials and machinery, and a 19 per cent rise before the year-end means those flows exceed 2020 already. A depressed 2020 base flatters every comparison, which is why the other lines in the digest are worth reading.

Beer, flour and the harbour

Brewing is up 7.8 per cent, flour is flat and port handling is up five per cent in the cumulative data.

The digest’s production table gives cumulative 2021 volumes against the same months of 2020 for a few non-mining lines. Alcoholic drinks stand at 4.29 million hectolitres against 3.98 million, an increase of 7.8 per cent. Wheat flour, a staple, is flat at 142,189 tonnes against 142,917. Goods handled in the Kinshasa, Matadi and Boma ports reach 1.40 million tonnes, up 5.0 per cent from 1.34 million. The BCC’s soft-drink and cement cells are blank or inconsistent and cannot be used.

The pattern is the interesting part. Households are not buying more bread but they are spending more on beer, consistent with discretionary income recovering after the lockdown. The Government eased restrictions on 14 August, when bars, terraces and night clubs were allowed to reopen and party halls could fill to half their capacity. Ports show a modest rise in volume, which fits the customs revenue.

What Kinshasa’s price table adds

Restaurant prices have risen 1.25 per cent in six weeks while hotel rates have not moved.

The restaurants and drink stalls index in Kinshasa went from 141.4 in the week of 6 to 12 September to 143.2 in the week to 24 October. Accommodation, by contrast, stayed at 128.3, and recreational and cultural services at 149.5, the same figure all through the period. Eateries are repricing as footfall returns, whereas the hotels and cultural venues are not, which suggests that rooms are priced to a few corporate clients and negotiate rarely. The BCC publishes no employment series in this digest, so the price signals are the best proxy for how busy the capital is.

What it means for a business plan

Plan on consumption growing faster than flour, and on customs-led demand for imported goods.

For consumer-goods firms, the mix matters more than the total. Beverages, restaurants and imported durables are growing, while staples are not, so working capital should lean toward discretionary lines and away from stock that depends on household bulk purchases. Importers can count on border and port activity to hold up, but should expect the DGDA to chase collections harder, given that it will be asked to match this year’s number. Investors reading the copper price as the whole story would miss the quieter message: the franc’s stability has let the non-mining economy catch some of the same tide. The mine side is still ramping, since Kamoa-Kakula only began producing concentrate in May, and the IMF’s staff-level agreement on the first programme review on 27 October keeps the financing behind public spending in place.