2014 GDP growth – the mining effect
The Central
Bank of Congo (BCC) has recently released a very interesting report named
“report on the monetary policy 2014”.
According
to the BCC report, the economy grew by 9.5% in 2014 compared to 8.5% in 2013. This is
4.8% higher than the average of the SSA region.
| Source: Central Bank of Congo |
The primary sector remains the most important
contributor to the GDP as one could expect for a mining country like the DRC.
However, it is worth noting that 5 years ago it was not the mining but the
agriculture sector the main contributor to the country’s growth. In 2014, the
mining sector has contributed up to 50% to the country's growth while its
contribution was “only” 28% in 2013 according to that same report.
This report is clearly demonstrating the
tendency for the economy to heavily rely on its extractive sector with the risk of been
negatively impacted by a downturn in commodity prices (the copper price has
significantly dropped recently). The data show that the country should work
more on diversifying its economy.
According to the BCC, the total production of
copper was 1 million tons in 2014 compared to only 0.3 million tons 5 years
earlier. The total value of copper exported in 2014 was USD 7.4 billion while
the cobalt value was USD 2.2 billion.
On the paper, this looks good but when you are
travelling in the Katanga province, you don’t really notice the positive impact
those numbers have on the population unless you are working in one of the
mining “value chain” companies.
The debate is open between the mining companies
claiming they are paying taxes therefore it is the role of the government to
provide the basic services and the government that claims the mining companies
are not paying enough taxes thanks to a mining code too “favorable” to them. I
am sure this debate with continue for some times.
I am not a mining nor a taxes expert but a
couple of paragraph later in the report the BCC is mentioning a study done by a
Belgian professor Dr Marysse on Tenke Fungurume as well as an IMF comparative
study showing that the fiscal charges supported by the mining companies in the DRC
is approximately 13% of their turnover compared to 45 to 65% in the rest of the
world.
If those data are correct, I argue that there is
something wrong that the government would have to address in the new version of
the mining code they are working on.
The impact of the mining industry growth on the
population is yet to be felt and the government, in my opinion, should do
anything within its power to make sure the population starts benefiting from
this mining cycle before it is too late.
When I say everything in its power, I am not
talking about harassing the private sector obviously…
