The central bank’s own production table shows a two-speed economy, with the speed set by whom the output serves.

By Kanisa Magazine · June 2021

Congo’s mines had a good pandemic year and its factories did not. In the Banque Centrale du Congo’s production table for 2020, copper output rose 6.3 per cent to 1,601,208 tonnes and cobalt 9.2 per cent to 86,591 tonnes. Over the same twelve months cement fell 21.6 per cent, soft drinks 14.9 per cent, wheat flour 7.0 per cent and alcoholic drinks 6.8 per cent. Anyone selling to households read a different economy from anyone selling to mines.

The figures come from the BCC’s weekly statistical digest of 23 June 2021. Its growth table puts GDP expansion in 2020 at 1.7 per cent, after 4.4 per cent in 2019, and GDP per head shrinking by 1.2 per cent. When Agence Ecofin reported an earlier estimate in February, its headline credited the mining sector with keeping the economy out of recession.

What grew and what shrank

Utilities, ports and telecoms rose with the mines. Consumer manufacturing did not.

The table splits cleanly. Electricity output rose 8.3 per cent to 12,397 thousand megawatt-hours, port handling at Kinshasa, Matadi and Boma rose 7.1 per cent to 1.785 million tonnes, and telephone use rose 4.3 per cent. These are the services that mines, their contractors and the households around them consume. Cocoa output for export rose 40.1 per cent, helped by a low base. Against them, cement dropped from 1.38 million to 1.08 million tonnes, the sharpest fall in the table, and timber logs slipped 1.9 per cent.

Why mining output and household demand part ways

A mine pays its biggest bills abroad, so its growth leaks away before it reaches Kinshasa.

A copper-cobalt mine buys equipment, reagents and fuel on world markets and sells its metal in dollars to foreign smelters. The money that stays in Congo goes to royalties, taxes, wages and local contractors, a fraction of the sales value. Household-facing activity depends on a different circuit: franc wages, informal incomes and the price of imported food and fuel. When mining output rises 6 per cent and the franc loses 15 per cent against the dollar in the same year, as it did in 2020, the growth in the headline and the growth in a household’s purchasing power move in opposite directions.

The population arithmetic makes it sharper. Congo’s resident population is estimated by the BCC at 92.1 million in 2021, growing at 3 per cent a year. Real GDP growth of 4.9 per cent projected for 2021 therefore delivers only 1.8 per cent more output per person, or about US$567 per head against US$545 in 2020.

The June mood: metals firm, consumers still cautious

Copper sat near US$10,000 a tonne in early June and consumer-goods data had not caught up.

At the Economic Situation Committee of 2 June, copper was reported to be below US$10,000 a tonne, with reserves above US$1.2 billion. The digest has no 2021 figures yet for cement, beverages or flour, and that gap is itself information: the consumer side is reported later and with less confidence than the mining side.

Cumulative copper output for January to April 2021 was 553,942 tonnes against 482,400 a year earlier. Whether cement and beverages show a similar recovery will tell business readers more about domestic demand than any mining figure can.

Sell into the mine’s supply chain, price carefully to consumers

B2B services tied to mining have the firmer ground in 2021.

For a business planning the second half of 2021, the practical divide is plain. Firms supplying power, logistics, telecoms, security, catering and maintenance to the mining belt are selling into a market growing at 6 per cent or more. Firms selling bottled drinks, flour or cement to households face a market that shrank in 2020 and is projected to grow at under 2 per cent a head in 2021. The sensible plan is to put expansion capital where growth is real, keep consumer-goods prices under review every quarter, and treat any mining-led boom in the headline as a reason to look at the supply chain behind it, not the shelf in front of it.