From 2010 to 2015, the Democratic Republic of the Congo went through a period of overall strong economic growth. Up until the beginning of 2016, this macro-economic performance contributed to continuing relative political stability, to commitments to structural and economic reforms, and to mining exports. This also enabled the Democratic Republic of the Congo to improve its standing on the Human Development Index despite starting from a weak position, but there is no certainty that this trend will continue.
The Democratic Republic of the Congo remains one of the least developed countries. The main objective of the DRC’s trade policy is to reduce poverty by: (1) continuing trade liberalisation, (2) accelerating privatisation, (3) implementing sectoral reforms, especially in the fields of agriculture, mining, industry and services, and (4) promoting diversified exports. The national trade strategy paper, developed with the aid of the EU, is focused on participating in global trade. It is crucial that this strategy, which is part of an extensive development plan to be put in place by 2035, focuses on opportunities offered by globalisation, such as participation in value chains and integration into the regional economy. Market access (the EU market in particular) is only one strand of the solution. Sharing a border with nine countries, the Democratic Republic of the Congo is a key player in the region. Exports to African countries have increased considerably since 2008. These exports represented almost 24 % of total exports in 2014; a positive development. Strengthening regional integration would be beneficial. The Democratic Republic of the Congo has designated key areas of reform, notably (1) industrialisation, (2) productivity growth in the mining sector, and (3) developing agricultural potential. Putting these objectives into practice and consolidating the country’s position in global value chains are major challenges.
EU Aid for Trade Programme, 10th EDF
In April 2010, the EU signed a financing agreement with the Democratic Republic of the Congo with a view to implementing an Aid for Trade programme (worth €16 million), which is now nearing completion. The overall objective of this programme was to support the government in its efforts to make the economy more competitive on internal, regional and international markets and to prepare its integration into the global economy under EPAs. Activities have been carried out in terms of the programme’s four strands, namely Improving the business environment through legal and judicial protection (Component 1); Facilitating trade and customs reform (Component 2); Capacity building in trade matters (Component 3); Quality and development support for exports (Component 4).
However, given that there will be no follow-up of the Aid for Trade Programme under the 11th EDF, it is likely that trade support will be provided through Regional Indicative Programmes (RIPs). Of these, support is provided to the Democratic Republic of the Congo under CEPGL, SADC, COMESA, and the CEMAC configuration of the DR Congo and Sao Tomé (making up the Central Africa RIP).
Enhanced Integrated Framework
The Enhanced Integrated Framework is one of the Trade Ministry’s flagship projects (supported and administered by the World Trade Organization with the support of various donors) and it has enabled the implementation of a well-equipped unit to provide technical support to the Trade Ministry (UNMO EIF). A stimulus plan for oil palm production in the town of Tshela is currently being implemented thanks to support provided under the EIF.
The EU facilitates donors to the EIF and has accompanied the Trade Ministry in completing the Diagnostic Trade and Integration Study (DTIS), and in implementing projects in Category 1 (implementation of UNMO EIF) and 2 (validation of the stimulus plan for oil palm production).
The EPAs are based on four principles:
- regional integration and gradual liberalisation,
- differentiation and flexibility,
- compatibility with multilateral rules governing trade.
Adopting an overall approach, the EPAs will be closely linked to development aid, including technical assistance linked to trade.
An EPA offers tax- and quota-free access to the European market for all products, but at the same time seeks an (asymmetric and gradual) opening of the local market for European products. The Democratic Republic of the Congo negotiates EPAs as part of the Central Africa configuration (CEMAC + the Democratic Republic of the Congo + Sao Tomé), but limited political involvement is evident, mainly due to the fact that the Democratic Republic of the Congo still benefits from the Everything but Arms initiative as a less developed country (LDC).