It is estimated that the DRC should invest as much as USD 749 million in its energy sector (8.8% of the GDP) per year for the next decade to develop the generation capacity for export. The expected net revenues from this export would be USD 519 million per year (6.1%) (The World Bank Group, 2010). The potential net revenues as well as the initial investments are huge for the DRC.
However, with a GDP of only
USD 10.5 billion (current prices) and a gross saving rate of 17%, the DRC
simply does not have the financial capabilities to fund those billion dollars
projects. Therefore, having access to Foreign Direct Investments or attracting
Independent Power Producers will be crucial to develop the sector. Today, the
majority of FDI is directed towards mining industry estimated to be more
lucrative (AFBD/OECD, 2008). The problem is that the DRC is often
perceived, rightly, as a very difficult place to do business in, with a very
low level of protection for the investors (The World Bank Group, 2011).
The recent case of the
Canadian First Quantum which has seen its mining titles withdraw after an
investment of more than USD 593 million (First Quantum, 2011) is the
last example of the lack of protection that investors are exposed to.
To attract more foreign investors
in its energy sector, the country must work on improving the country’s
investment climate and competitiveness.
According to the Societe Nationale d'Electricite (SNEL) itself, the
involvement of the government in its daily activities is one of its major
problems and the high level of corruption[1] within
the ministries and the public companies is increasing the inefficiencies in the
sector (Ministere de L'Energie Congolais, 2009)
I argue that sacking the Board
of Directors of SNEL is simply window dressing if they do not address the real
issues…
Meantime, good
luck for today demonstration and well done to the committee...
[1] The DRC rank
on the Corruption Perception Index is 164 on 178 (Transparency
International, 2010)
3 comments:
It will be interesting to know at what point did the president decide to sack this board...and if it is not a quick move to want to stop tonight's mouvement...
Very good point my friend but it is too late now...
Mr Herve, it is definitely window dressing, the government got scared when it heard that there will be a march, which I hope will still happen some day, plus the march would have been bad publicity for the coming elections, which I again hope will happen. It's over 20 years of poor and mediocre management.
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