Congo Cuts 2015 Forecast amid Commodities Downturn

Mining and copper production plummets as the Democratic Republic of Congo contends with a low-price commodity market, forcing authorities to cut 2015 growth anticipation from 8.4 to 7.7 percent, according to Reuters. Congo also suffered from a lacking demand from China, and Swiss firm Glencore suspended mining operations in the southeast. Congo serves as a commodity-based economy, with cobalt and copper comprising 79 percent of exports in the first part of 2015.

Mining and copper production plummets as the Democratic Republic of Congo contends with a low-price commodity market, forcing authorities to cut 2015 growth anticipation from 8.4 to 7.7 percent, according to Reuters. Congo also suffered from a lacking demand from China, and Swiss firm Glencore suspended mining operations in the southeast. Congo serves as a commodity-based economy, with cobalt and copper comprising 79 percent of exports in the first part of 2015.

The Congolese economy will remain in an extremely fragile state going forward, not only because of the commodities slump, but also because a change in leadership for 2016 spells an uncertain future. The situation’s tension has grown to the point where President Joseph Kabila gave an impassioned speech on Saturday, urging peace talks in wake of the upcoming transition.

The elections would mark the first peaceful power change since the nation gained independence from Belgium. Civil strife and authoritarian rule has racked the DRC for decades, with the most recent conflict resulting in the deaths of up to 5 million people. For his part, Kabila said he will honor the outcome, but most opposition parties have ruled out dialogue, suspecting that the president intends to use talks to remain in power for a longer period.

Lost Prosperity

Many consider Congo the richest nation on earth, but its people remain in desperate poverty due to the country’s legacy of colonialism, corruption, and civil war. DRC holds diverse resources, including an almost limitless water supply from the Congo River that gives way to lucrative crop production. With that, government management constitutes another major issue.

For example, Joseph Mobutu gained power in the mid-1960s, but he hoarded the wealth of the country for himself, relatives, and friends. He finally lost his throne in the late 1990s, but little progress followed under the Kabila government. Moreover, a bitter ethnic struggle between Hutus and Tutsis, exacerbated by Belgian rule, prevents people from coming together and finding a new way forward.

All of this has resulted in a nation with little infrastructure, unstable governance, and a health care system that revolves around charity, notes the BBC.

Potential Solutions

The DRC needs to diversify away from commodities, but the economy will have a harder time because of political gridlock and a lack of funding. Diversification could have been a viable strategy, but the country remains far behind in terms of economic advancement.

Further, the instability and sheer danger prevents further foreign investment, but this serves as a case where international investment should come with strings attached. Foreign investors have become necessary, but only government policy and help from the international community can ensure that the type of investment taking place benefits the country and people as a whole, with additional measures in place to prevent the exploitation of natural resources and people.