The BCC’s October output table shows ore growing several times faster than the goods households buy.

By Kanisa Magazine · October 2022

The BCC estimates that Congo’s economy will grow by 7.1 per cent in 2022, and its October digest shows where that growth is coming from. In the provisional cumulative output table, copper is 41 per cent above the comparable 2021 figure and cobalt 35 per cent. Wheat flour is up 6 per cent, soft drinks 1 per cent and electricity 1 per cent.

A headline built on mining and a household economy growing at a fifth of the pace is not a contradiction, but it should change how a consumer-facing business plans.

Two economies in one table

Metal output is growing several times faster than the goods that households buy.

The BCC’s cumulative column for 2022 shows copper at 1,576,924 tonnes against 1,116,232 in the comparable 2021 column, and cobalt at 80,752 tonnes against 59,876. Zinc is the exception, down 13 per cent. In the same table, flour milled rose from 134,921 to 143,335 tonnes, alcoholic drinks from 3,774 to 4,053 thousand hectolitres, and soft drinks from 1,728 to 1,752. Electricity output grew 1.2 per cent, to 8,866 million kilowatt-hours, and drinking water 6.1 per cent. Telephone traffic, measured in minutes, rose 6.6 per cent.

These are provisional figures and the cut-off differs between lines, so they should be read as an order of magnitude, not an index. But the gap is large enough to survive the caveats. Mining output grew roughly six times faster than flour and thirty times faster than soft drinks. The pattern also fits the picture painted by Tenke Fungurume’s first-half report, which put output up 24.4 per cent for copper and 49.3 per cent for cobalt.

What the 7.1 per cent hides

Growth per head is about 4 per cent, and prices are rising by more than twice that.

The BCC’s growth table divides the 7.1 per cent by a population that grows at 3 per cent a year. Real GDP per head rises 4.0 per cent, from US$313 to US$326 at 2005 prices. In current dollars, the BCC puts GDP at US$65.4 billion and per-head income at US$688, against US$600 in 2021. The BCC’s table of inflation projects the 2022 end-period rate at 9.6 per cent and the annual average at 6.1 per cent.

A household that earns a salary in francs has seen its real income fall if its pay did not rise by about ten per cent. The World Bank’s October update on the DRC, published on 7 October, states the same worry in more formal terms. It reports growth of 6.2 per cent in 2021 driven mainly by mining but supported by non-mining sectors, and then warns that poverty reduction has been elusive and that the benefits of growth are yet to be more widely shared.

Why mining growth does not spread quickly

Mines buy abroad, pay few workers in dollars and send their taxes to the Treasury.

The mechanism is structural. A copper-cobalt mine is capital-intensive: it imports equipment, reagents, explosives and fuel, employs relatively few people per tonne and pays much of its wage bill in dollars. Its demand for local goods is concentrated in a few services: trucking, power, catering and security. The broader benefit travels through taxes and royalties, which the Treasury must then spend on salaries, transfers and investment. In 2022 the budget has favoured current spending over capital projects, and that is where the second link breaks.

Telecoms are the best counter-example. The World Bank update estimates that a 10 per cent rise in broadband penetration could add about 2.5 per cent to GDP growth and almost 700,000 jobs, and describes the DRC’s digital indicators as among the lowest of its peers. A sector that is growing and has room to grow is a better bet for household income than another increment in ore.

What a consumer business should plan on

Budget for mid-single-digit volume growth, not seven per cent.

For brewers, millers, retailers and lenders, the figure that matters is the growth rate of household spending, and the BCC’s output lines suggest it sits in the mid single digits in volume terms. A plan that assumes growth in line with the headline will overstate demand by two or three points a year.

The other action is geographic. Demand from mining households and mining suppliers is concentrated in Lualaba and Haut-Katanga, where pay is dollar-linked and demand grew fastest. Firms selling to the north-west should expect flatter volume and tighter price points. The simplest discipline is to forecast regional sales against regional drivers, using the mine’s output for one and the telecom or flour series for the other.