Can the DRC Get a Better Deal on Its Immense Mineral Wealth?

Suzy PearlieSuzy Pearlie | Updated: 12-07-2022 16:37 IST | Created: 12-07-2022 16:36 IST
Can the DRC Get a Better Deal on Its Immense Mineral Wealth?
Image Credit: Khusen Rustamov from Pixabay
  • Country:
  • Congo Dem Rep

According to recent reports in The Telegraph, UK prosecutors at the Serious Fraud Office may be considering charges against members of Glencore's senior management, after the company pleaded guilty to multiple charges of bribery and corruption surrounding its activities in the decade between 2008 and 2018 in several countries in sub-Saharan Africa.

The news comes at a time of increased oversight over the mining industry, especially in the Democratic Republic of Congo (DRC), where the current administration is trying to stamp out corruption and audit several shady mining contracts that previous Congolese governments have signed with foreign companies, often in exchange for bribes.

Seeking a new deal

Since the days of Mobutu Sese Seko, through to the 18 years tenure of Joseph Kabila as head of state, the Democratic Republic of Congo has struggled to thrive, as corruption has allowed unscrupulous corporations and officials to benefit from the country's rich natural resources while leaving the general population behind. The lack of transparency and corruption has been particularly egregious in the mining industry, with transparency activists claiming that the DRC lost out on billions of dollars in revenue due to shady mining contracts. Despite being the world's main source of cobalt – a high-demand mineral that is essential to build lithium-ion batteries – the World Bank estimates that 60 million citizens still live on less than $1.90 per day.

However, there are signs that things could be starting to change. In 2019, Félix Tshisekedi was elected President and, despite a legal challenge by the defeated Kabila, managed to complete the country's first peaceful transition of power since gaining independence from Belgium in 1960. Since taking office, Tshisekedi has sought to usher in reforms to combat fraud and corruption within the mining sector that has enabled foreigners to leave "as billionaires while we remain poor."

In May last year, Tshisekedi announced a sweeping audit and renegotiation of the mining contracts signed by the Kabila administration, including those concluded with Glencore, while in November, he called for a ban on new mining permits until the country's mining registry has been audited for fraud. For all his enthusiasm, Tshisekedi has a tough job ahead of him, as getting a better deal from the big mining giants will require tact and skilful diplomacy in order to avoid a showdown that could be economically disastrous for the country.

Strengthening international ties

As well as seeking to stop revenue losses from cobalt mining and bring accountability to the sector, Tshisekedi has launched an ambitious economic reform agenda, which includes measures for greater independence of the central bank and more efficient revenue collection. Boosted in part by an increase in the international price of copper and cobalt, the DRC's economy is recovering at a greater rate than expected, with the International Monetary Fund revising its growth prediction for 2022 to 6.2%.

The reforms, especially in the country's mining sector, have restored international confidence. Last July, for instance, the IMF decided to approve a new three-year aid program for the first time since it had halted its assistance to the DRC in 2012 over concerns regarding Kabila's corrupt handling of mining contracts. In December, the World Bank also confirmed a grant worth a quarter of a billion dollars as support for efforts to "increase mining revenue transparency and strengthen expenditure management".

The reforms have not gone unnoticed by international partners, with IMF chief Kristalina Georgieva hailing the progress during a visit to Kinshasa in December, where she described the DRC as a "bright spot" among African economies. The transparency efforts have also gained support across the Atlantic, where several members of the US Congress have sent a letter to Secretary of State Anthony Blinken asking the US to lend more support to the democratic apparatus in the DRC ahead of the 2023 general elections.

Repairing old wounds

But not all international relations are so easy to restore. Despite making progress on the economy and tackling the issues surrounding the mining sector deals, Tshisekedi also has the arduous task of mending relations with Rwanda. The historic animosity between the two countries stems from the time of the Rwandan Civil War, when the devastating ethnic conflict spilled over to the DRC's eastern territories. The region's remoteness offered an effective hiding place for all sorts of military and political groups wanted for war crimes in their home countries, incensing Rwanda, as well as Uganda and even Burundi, to conduct military operations on DRC soil with impunity and throwing the region into chaos.

Tshisekedi's election seemed to have opened a new avenue for cooperation between the two countries, culminating in the DRC's admission to the East African Community. But despite making multiple diplomatic efforts, not least by engaging through multilateral fora, the overt Rwandan support for the rebel group M23 in the east of the DRC has soured relations in recent months. In early June, Tshisekedi publicly accused the Kigali government of backing the militia — which plays an important role in the Kivu conflict – and represents a serious threat to regional stability.

Continuing to deliver

In what can be seen as confirmation of the merits of democracy, the first peaceful transfer of power in the DRC's history has started to turn the country's fortunes around. Three years after taking office, Félix Tshisekedi has managed to stabilise the economy and restored international trust.

Despite having a high level of popularity within the DRC, with his political coalition marking down important victories in this spring's gubernatorial elections, Tshisekedi's work is not yet done. In order for his term to be seen as truly successful, must find a peaceful resolution with regards to the Rwandan tensions and, perhaps above all, continue his efforts to combat corruption in the country's mining sector. Only by effectively stamping out this scourge will Tshisekedi manage to give the people of the DRC improved living standards and prosperity that, for too long, they have been denied.

(Devdiscourse's journalists were not involved in the production of this article. The facts and opinions appearing in the article do not reflect the views of Devdiscourse and Devdiscourse does not claim any responsibility for the same.)

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