Political Risk Index Summer 2021 (gated) containing 67 chapters.
Chapter 20 of 67.
Political Risk Index Summer 2021 (gated) containing 67 chapters.
Chapter 20 of 67.
Democratic Republic of CongoRead on
Political Risk Index Summer 2021 (gated) containing 67 chapters.
Chapter 20 of 67.
Democratic Republic of CongoRead on
Political Risk Index Summer 2021 (gated) containing 67 chapters.
Chapter 20 of 67.
Democratic Republic of CongoRead on
Democratic Republic of Congo
Risk Temperature
73 (Medium-High) -2
TREND ▲
President Felix Tshisekedi continues to consolidate his grip on power, at the expense of his predecessor, Joseph Kabila, and Kabila’s coalition (the Front Common pour le Congo or ‘FCC’). Over recent months, Tshisekedi has orchestrated a sequence of moves aimed at neutralising some of Kabila’s closest parliamentary allies.
This began in December 2020, when Tshisekedi managed to build a parliamentary majority in the lower house (the National Assembly) to vote out Assembly President and Speaker Jeannine Mabunda (one of Kabila’s closest political allies). Zoe Kabila, younger brother of Joseph Kabila and the governor of Tanganyika Province, has also been ousted.
This began in December 2020, when Tshisekedi managed to build a parliamentary majority in the lower house (the National Assembly) to vote out Assembly President and Speaker Jeannine Mabunda (one of Kabila’s closest political allies). Zoe Kabila, younger brother of Joseph Kabila and the governor of Tanganyika Province, has also been ousted.
Mabunda’s removal enabled Tshisekedi to activate the Assembly’s ‘age office’ (a committee of its oldest and youngest members) which, under the constitution, takes control of parliamentary business in the absence of a speaker. That then allowed a vote to remove the prime minister, Sylvestre Ilunga Ilunkamba, another Kabila loyalist. The following day, the leader of one of the largest parties in Kabila’s FCC, Modeste Bahati, crossed the floor to join Tshisekedi’s own coalition, the Sacred Union for the Nation (USN). To complete his rout, Tshisekedi also managed shortly afterwards to bring the two long-time opposition heavyweights Jean-Pierre Bemba and Moise Katumbi into the USN.
Mabunda’s removal enabled Tshisekedi to activate the Assembly’s ‘age office’ (a committee of its oldest and youngest members) which, under the constitution, takes control of parliamentary business in the absence of a speaker. That then allowed a vote to remove the prime minister, Sylvestre Ilunga Ilunkamba, another Kabila loyalist. The following day, the leader of one of the largest parties in Kabila’s FCC, Modeste Bahati, crossed the floor to join Tshisekedi’s own coalition, the Sacred Union for the Nation (USN). To complete his rout, Tshisekedi also managed shortly afterwards to bring the two long-time opposition heavyweights Jean-Pierre Bemba and Moise Katumbi into the USN.
Taken together, these developments will almost certainly bring an end to the two-year stalemate between Tshisekedi and Kabila, which followed the latter’s election defeat in January 2019. As such, it will be met with relief by the donor community, who have become increasingly exasperated by the general political turmoil.
Taken together, these developments will almost certainly bring an end to the two-year stalemate between Tshisekedi and Kabila, which followed the latter’s election defeat in January 2019. As such, it will be met with relief by the donor community, who have become increasingly exasperated by the general political turmoil.
At a time when the ongoing effects of COVID-19 are driving increasing food insecurity across the country, and while the northeast of the country is experiencing a new Ebola outbreak, donors are hoping that Tshisekedi’s consolidation of control will enable government agencies to function more effectively (even if this is at the expense of a narrowing of the political space). However, the USN itself remains fractious and could present the President with challenges of its own over the medium term.
Expropriation Risk
72 (Medium-High)
TREND ►
As part of his wider consolidation of power, President Tshisekedi has also continued to strengthen his control over Gecamines, the state-owned mining company that has stakes in many of the largest copper and cobalt mines across the country. Having taken control of the Gecamines board last year from Kabila loyalists, he has continued to promote his people to the company’s most senior positions. In late February 2021, Tshisekedi then appointed Gecamines chief executive officer Sama Lukonde Kyenge as prime minister (to replace Sylvestre Ilunga), thereby rendering the state’s and the company’s interests indivisible.
As part of his wider consolidation of power, President Tshisekedi has also continued to strengthen his control over Gecamines, the state-owned mining company that has stakes in many of the largest copper and cobalt mines across the country. Having taken control of the Gecamines board last year from Kabila loyalists, he has continued to promote his people to the company’s most senior positions. In late February 2021, Tshisekedi then appointed Gecamines chief executive officer Sama Lukonde Kyenge as prime minister (to replace Sylvestre Ilunga), thereby rendering the state’s and the company’s interests indivisible.
In this context, there will be nothing to disrupt Tshisekedi’s push towards generating a more business-friendly environment for the sector, which has been central to his platform since coming to power. Before he left office, Kabila had pushed through changes to the country’s 2002 mining code which, if fully implemented, would have raised tax rates on mining profits and doubled to 10% the mandatory stake that all mining projects must give to the state. Tshisekedi will now find it easier to abandon or modify many of these changes.
In this context, there will be nothing to disrupt Tshisekedi’s push towards generating a more business-friendly environment for the sector, which has been central to his platform since coming to power. Before he left office, Kabila had pushed through changes to the country’s 2002 mining code which, if fully implemented, would have raised tax rates on mining profits and doubled to 10% the mandatory stake that all mining projects must give to the state. Tshisekedi will now find it easier to abandon or modify many of these changes.
Political Violence Risk
74 (Medium-High)
TREND ▲
Since the start of the pandemic, there has been a steady increase in fighting among armed groups in the country’s troubled eastern regions, which has included greater violence against civilian targets. In Ituri Province, a rebel group called the Cooperative for Development of Congo (CODECO) has continued to clash with the Congolese Army (FARDC) but is escalating its attacks against villages, which have left dozens dead. The latest wave of tit-for-tat violence involving CODECO, in mid-March 2021, left at least 30 people dead, most of them civilians.
Since the start of the pandemic, there has been a steady increase in fighting among armed groups in the country’s troubled eastern regions, which has included greater violence against civilian targets. In Ituri Province, a rebel group called the Cooperative for Development of Congo (CODECO) has continued to clash with the Congolese Army (FARDC) but is escalating its attacks against villages, which have left dozens dead. The latest wave of tit-for-tat violence involving CODECO, in mid-March 2021, left at least 30 people dead, most of them civilians.
In another part of Ituri Province, and into North Kivu, the long-standing Allied Democratic Forces (ADF) has continued its own offensive against both military and civilian targets. The group is now the most active in the region and operating over a wide area, increasing the security enforcement challenge. Since the start of 2020, the group has carried out dozens of raids, which have left at least 1,000 civilians dead and displaced thousands more. However, in late March 2021, an ADF attack on a village in North Kivu was thwarted by the FARDC, and seven rebels killed. In early May 2021, North Kivu and Ituri were placed under military control due to the violence, although gaps in the military’s capacity will limit the effectiveness of this move.
Meanwhile, in South Kivu Province, tensions continue to run high among ethnically aligned armed groups. With the new Ebola outbreak emerging since early February 2021, centred upon North Kivu, and with the general effects of COVID-19 continuing, the potential for eastern insecurity to increase over the coming months is extremely high.
Terrorism Risk
36 (Medium-Low)
TREND ►
On March 10 2021, the US State Department reclassified the ADF as a designated Foreign Terrorist Organisation, and its head, Seka Musa Baluku, as a Specifically Designated Global Terrorist. When doing so, the State Department referred to the ADF as ‘The Islamic State of Iraq and Syria-Democratic Republic of Congo’ (ISIS-DRC). The move, which was welcomed by the Democratic Republic of the Congo (DRC) government, is largely symbolic given that previous attempts to sanction the group’s international funding streams and recruitment mechanisms (which is the main purpose of the designated terrorist list) have proved largely ineffectual.
On March 10 2021, the US State Department reclassified the ADF as a designated Foreign Terrorist Organisation, and its head, Seka Musa Baluku, as a Specifically Designated Global Terrorist. When doing so, the State Department referred to the ADF as ‘The Islamic State of Iraq and Syria-Democratic Republic of Congo’ (ISIS-DRC). The move, which was welcomed by the Democratic Republic of the Congo (DRC) government, is largely symbolic given that previous attempts to sanction the group’s international funding streams and recruitment mechanisms (which is the main purpose of the designated terrorist list) have proved largely ineffectual.
Moreover, although Islamic State (IS) has claimed that the ADF is part of its organisation, convincing operational evidence is lacking that this is the case. Although the ADF’s leaders are Muslim, the group has developed very different views from IS, and its operations have not historically conformed to those of a terrorist organisation. Nevertheless, its redesignation as such by the US State Department could result in the group switching tactics; this increases the risk that it might start to undertake such attacks.
Moreover, although Islamic State (IS) has claimed that the ADF is part of its organisation, convincing operational evidence is lacking that this is the case. Although the ADF’s leaders are Muslim, the group has developed very different views from IS, and its operations have not historically conformed to those of a terrorist organisation. Nevertheless, its redesignation as such by the US State Department could result in the group switching tactics; this increases the risk that it might start to undertake such attacks.
Exchange Transfer and Trade Sanctions Risk
73 (Medium-High)
TREND ►
In 2020, the DRC experienced its first recession in 18 years, due to COVID-19’s effects. Although the overall contraction was not as sharp as projected (in part, because of higher prices for major commodities, especially copper, the DRC’s largest export-earner) it was still significant at -1.7%. This compares to growth of 4.4% in 2019, and 5.8% in 2018.
Moreover, social spending will likely have to increase significantly soon, as the country responds to a wave of COVID-19-related malnutrition. However, all of this, combined with the response to Tshisekedi’s consolidation of power, makes it less likely that the international community will seek to broaden trade sanctions against the country over the short or even medium term.
Moreover, social spending will likely have to increase significantly soon, as the country responds to a wave of COVID-19-related malnutrition. However, all of this, combined with the response to Tshisekedi’s consolidation of power, makes it less likely that the international community will seek to broaden trade sanctions against the country over the short or even medium term.
Sovereign Default Risk
75 (High)
TREND ►
The country’s commercial loan liabilities, most of which relate to a major Eurobond issue in 2007, are not up for refinancing in 2021. In addition, the country currently has a debt-to-GDP (gross domestic product) ratio of just 21.2%, making it one of the least-indebted African countries.
However, external debt accounts for over 65% of public debt. Most of this is owed to multilateral donors- especially the International Monetary Fund (IMF)- who since COVID-19’s advent have extended emergency finance to the country (including the IMF’s Catastrophe Containment and Relief Trust). With relations between the IMF and DRC slowly improving after several years of difficulties under Kabila, the multilateral community is unlikely to withdraw these kinds of mechanisms.
However, external debt accounts for over 65% of public debt. Most of this is owed to multilateral donors- especially the International Monetary Fund (IMF)- who since COVID-19’s advent have extended emergency finance to the country (including the IMF’s Catastrophe Containment and Relief Trust). With relations between the IMF and DRC slowly improving after several years of difficulties under Kabila, the multilateral community is unlikely to withdraw these kinds of mechanisms.
The multilateral community continues to take a cautious approach towards the public finances (and especially towards the government’s financing gap, currently USD631mn). These finances could deteriorate further in 2021, in the face of softening demand for commodities from China and the continuing global COVID-19-related economic downturn.
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1 / 4
Democratic Republic of Congo
Risk Temperature
73 (Medium-High) -2
TREND ▲
President Felix Tshisekedi continues to consolidate his grip on power, at the expense of his predecessor, Joseph Kabila, and Kabila’s coalition (the Front Common pour le Congo or ‘FCC’). Over recent months, Tshisekedi has orchestrated a sequence of moves aimed at neutralising some of Kabila’s closest parliamentary allies.
This began in December 2020, when Tshisekedi managed to build a parliamentary majority in the lower house (the National Assembly) to vote out Assembly President and Speaker Jeannine Mabunda (one of Kabila’s closest political allies). Zoe Kabila, younger brother of Joseph Kabila and the governor of Tanganyika Province, has also been ousted.
This began in December 2020, when Tshisekedi managed to build a parliamentary majority in the lower house (the National Assembly) to vote out Assembly President and Speaker Jeannine Mabunda (one of Kabila’s closest political allies). Zoe Kabila, younger brother of Joseph Kabila and the governor of Tanganyika Province, has also been ousted.
Mabunda’s removal enabled Tshisekedi to activate the Assembly’s ‘age office’ (a committee of its oldest and youngest members) which, under the constitution, takes control of parliamentary business in the absence of a speaker. That then allowed a vote to remove the prime minister, Sylvestre Ilunga Ilunkamba, another Kabila loyalist. The following day, the leader of one of the largest parties in Kabila’s FCC, Modeste Bahati, crossed the floor to join Tshisekedi’s own coalition, the Sacred Union for the Nation (USN). To complete his rout, Tshisekedi also managed shortly afterwards to bring the two long-time opposition heavyweights Jean-Pierre Bemba and Moise Katumbi into the USN.
Mabunda’s removal enabled Tshisekedi to activate the Assembly’s ‘age office’ (a committee of its oldest and youngest members) which, under the constitution, takes control of parliamentary business in the absence of a speaker. That then allowed a vote to remove the prime minister, Sylvestre Ilunga Ilunkamba, another Kabila loyalist. The following day, the leader of one of the largest parties in Kabila’s FCC, Modeste Bahati, crossed the floor to join Tshisekedi’s own coalition, the Sacred Union for the Nation (USN). To complete his rout, Tshisekedi also managed shortly afterwards to bring the two long-time opposition heavyweights Jean-Pierre Bemba and Moise Katumbi into the USN.
Taken together, these developments will almost certainly bring an end to the two-year stalemate between Tshisekedi and Kabila, which followed the latter’s election defeat in January 2019. As such, it will be met with relief by the donor community, who have become increasingly exasperated by the general political turmoil.
Taken together, these developments will almost certainly bring an end to the two-year stalemate between Tshisekedi and Kabila, which followed the latter’s election defeat in January 2019. As such, it will be met with relief by the donor community, who have become increasingly exasperated by the general political turmoil.
At a time when the ongoing effects of COVID-19 are driving increasing food insecurity across the country, and while the northeast of the country is experiencing a new Ebola outbreak, donors are hoping that Tshisekedi’s consolidation of control will enable government agencies to function more effectively (even if this is at the expense of a narrowing of the political space). However, the USN itself remains fractious and could present the President with challenges of its own over the medium term.
Expropriation Risk
72 (Medium-High)
TREND ►
As part of his wider consolidation of power, President Tshisekedi has also continued to strengthen his control over Gecamines, the state-owned mining company that has stakes in many of the largest copper and cobalt mines across the country. Having taken control of the Gecamines board last year from Kabila loyalists, he has continued to promote his people to the company’s most senior positions. In late February 2021, Tshisekedi then appointed Gecamines chief executive officer Sama Lukonde Kyenge as prime minister (to replace Sylvestre Ilunga), thereby rendering the state’s and the company’s interests indivisible.
As part of his wider consolidation of power, President Tshisekedi has also continued to strengthen his control over Gecamines, the state-owned mining company that has stakes in many of the largest copper and cobalt mines across the country. Having taken control of the Gecamines board last year from Kabila loyalists, he has continued to promote his people to the company’s most senior positions. In late February 2021, Tshisekedi then appointed Gecamines chief executive officer Sama Lukonde Kyenge as prime minister (to replace Sylvestre Ilunga), thereby rendering the state’s and the company’s interests indivisible.
In this context, there will be nothing to disrupt Tshisekedi’s push towards generating a more business-friendly environment for the sector, which has been central to his platform since coming to power. Before he left office, Kabila had pushed through changes to the country’s 2002 mining code which, if fully implemented, would have raised tax rates on mining profits and doubled to 10% the mandatory stake that all mining projects must give to the state. Tshisekedi will now find it easier to abandon or modify many of these changes.
In this context, there will be nothing to disrupt Tshisekedi’s push towards generating a more business-friendly environment for the sector, which has been central to his platform since coming to power. Before he left office, Kabila had pushed through changes to the country’s 2002 mining code which, if fully implemented, would have raised tax rates on mining profits and doubled to 10% the mandatory stake that all mining projects must give to the state. Tshisekedi will now find it easier to abandon or modify many of these changes.
Political Violence Risk
74 (Medium-High)
TREND ▲
Since the start of the pandemic, there has been a steady increase in fighting among armed groups in the country’s troubled eastern regions, which has included greater violence against civilian targets. In Ituri Province, a rebel group called the Cooperative for Development of Congo (CODECO) has continued to clash with the Congolese Army (FARDC) but is escalating its attacks against villages, which have left dozens dead. The latest wave of tit-for-tat violence involving CODECO, in mid-March 2021, left at least 30 people dead, most of them civilians.
Since the start of the pandemic, there has been a steady increase in fighting among armed groups in the country’s troubled eastern regions, which has included greater violence against civilian targets. In Ituri Province, a rebel group called the Cooperative for Development of Congo (CODECO) has continued to clash with the Congolese Army (FARDC) but is escalating its attacks against villages, which have left dozens dead. The latest wave of tit-for-tat violence involving CODECO, in mid-March 2021, left at least 30 people dead, most of them civilians.
In another part of Ituri Province, and into North Kivu, the long-standing Allied Democratic Forces (ADF) has continued its own offensive against both military and civilian targets. The group is now the most active in the region and operating over a wide area, increasing the security enforcement challenge. Since the start of 2020, the group has carried out dozens of raids, which have left at least 1,000 civilians dead and displaced thousands more. However, in late March 2021, an ADF attack on a village in North Kivu was thwarted by the FARDC, and seven rebels killed. In early May 2021, North Kivu and Ituri were placed under military control due to the violence, although gaps in the military’s capacity will limit the effectiveness of this move.
Meanwhile, in South Kivu Province, tensions continue to run high among ethnically aligned armed groups. With the new Ebola outbreak emerging since early February 2021, centred upon North Kivu, and with the general effects of COVID-19 continuing, the potential for eastern insecurity to increase over the coming months is extremely high.
Terrorism Risk
36 (Medium-Low)
TREND ►
On March 10 2021, the US State Department reclassified the ADF as a designated Foreign Terrorist Organisation, and its head, Seka Musa Baluku, as a Specifically Designated Global Terrorist. When doing so, the State Department referred to the ADF as ‘The Islamic State of Iraq and Syria-Democratic Republic of Congo’ (ISIS-DRC). The move, which was welcomed by the Democratic Republic of the Congo (DRC) government, is largely symbolic given that previous attempts to sanction the group’s international funding streams and recruitment mechanisms (which is the main purpose of the designated terrorist list) have proved largely ineffectual.
On March 10 2021, the US State Department reclassified the ADF as a designated Foreign Terrorist Organisation, and its head, Seka Musa Baluku, as a Specifically Designated Global Terrorist. When doing so, the State Department referred to the ADF as ‘The Islamic State of Iraq and Syria-Democratic Republic of Congo’ (ISIS-DRC). The move, which was welcomed by the Democratic Republic of the Congo (DRC) government, is largely symbolic given that previous attempts to sanction the group’s international funding streams and recruitment mechanisms (which is the main purpose of the designated terrorist list) have proved largely ineffectual.
Moreover, although Islamic State (IS) has claimed that the ADF is part of its organisation, convincing operational evidence is lacking that this is the case. Although the ADF’s leaders are Muslim, the group has developed very different views from IS, and its operations have not historically conformed to those of a terrorist organisation. Nevertheless, its redesignation as such by the US State Department could result in the group switching tactics; this increases the risk that it might start to undertake such attacks.
Moreover, although Islamic State (IS) has claimed that the ADF is part of its organisation, convincing operational evidence is lacking that this is the case. Although the ADF’s leaders are Muslim, the group has developed very different views from IS, and its operations have not historically conformed to those of a terrorist organisation. Nevertheless, its redesignation as such by the US State Department could result in the group switching tactics; this increases the risk that it might start to undertake such attacks.
Exchange Transfer and Trade Sanctions Risk
73 (Medium-High)
TREND ►
In 2020, the DRC experienced its first recession in 18 years, due to COVID-19’s effects. Although the overall contraction was not as sharp as projected (in part, because of higher prices for major commodities, especially copper, the DRC’s largest export-earner) it was still significant at -1.7%. This compares to growth of 4.4% in 2019, and 5.8% in 2018.
Moreover, social spending will likely have to increase significantly soon, as the country responds to a wave of COVID-19-related malnutrition. However, all of this, combined with the response to Tshisekedi’s consolidation of power, makes it less likely that the international community will seek to broaden trade sanctions against the country over the short or even medium term.
Moreover, social spending will likely have to increase significantly soon, as the country responds to a wave of COVID-19-related malnutrition. However, all of this, combined with the response to Tshisekedi’s consolidation of power, makes it less likely that the international community will seek to broaden trade sanctions against the country over the short or even medium term.
Sovereign Default Risk
75 (High)
TREND ►
The country’s commercial loan liabilities, most of which relate to a major Eurobond issue in 2007, are not up for refinancing in 2021. In addition, the country currently has a debt-to-GDP (gross domestic product) ratio of just 21.2%, making it one of the least-indebted African countries.
However, external debt accounts for over 65% of public debt. Most of this is owed to multilateral donors- especially the International Monetary Fund (IMF)- who since COVID-19’s advent have extended emergency finance to the country (including the IMF’s Catastrophe Containment and Relief Trust). With relations between the IMF and DRC slowly improving after several years of difficulties under Kabila, the multilateral community is unlikely to withdraw these kinds of mechanisms.
However, external debt accounts for over 65% of public debt. Most of this is owed to multilateral donors- especially the International Monetary Fund (IMF)- who since COVID-19’s advent have extended emergency finance to the country (including the IMF’s Catastrophe Containment and Relief Trust). With relations between the IMF and DRC slowly improving after several years of difficulties under Kabila, the multilateral community is unlikely to withdraw these kinds of mechanisms.
The multilateral community continues to take a cautious approach towards the public finances (and especially towards the government’s financing gap, currently USD631mn). These finances could deteriorate further in 2021, in the face of softening demand for commodities from China and the continuing global COVID-19-related economic downturn.
Next ›
Next section »
‹ Previous
1 / 4
Democratic Republic of Congo
Risk Temperature
73 (Medium-High) -2
TREND ▲
President Felix Tshisekedi continues to consolidate his grip on power, at the expense of his predecessor, Joseph Kabila, and Kabila’s coalition (the Front Common pour le Congo or ‘FCC’). Over recent months, Tshisekedi has orchestrated a sequence of moves aimed at neutralising some of Kabila’s closest parliamentary allies.
This began in December 2020, when Tshisekedi managed to build a parliamentary majority in the lower house (the National Assembly) to vote out Assembly President and Speaker Jeannine Mabunda (one of Kabila’s closest political allies). Zoe Kabila, younger brother of Joseph Kabila and the governor of Tanganyika Province, has also been ousted.
This began in December 2020, when Tshisekedi managed to build a parliamentary majority in the lower house (the National Assembly) to vote out Assembly President and Speaker Jeannine Mabunda (one of Kabila’s closest political allies). Zoe Kabila, younger brother of Joseph Kabila and the governor of Tanganyika Province, has also been ousted.
Mabunda’s removal enabled Tshisekedi to activate the Assembly’s ‘age office’ (a committee of its oldest and youngest members) which, under the constitution, takes control of parliamentary business in the absence of a speaker. That then allowed a vote to remove the prime minister, Sylvestre Ilunga Ilunkamba, another Kabila loyalist. The following day, the leader of one of the largest parties in Kabila’s FCC, Modeste Bahati, crossed the floor to join Tshisekedi’s own coalition, the Sacred Union for the Nation (USN). To complete his rout, Tshisekedi also managed shortly afterwards to bring the two long-time opposition heavyweights Jean-Pierre Bemba and Moise Katumbi into the USN.
Mabunda’s removal enabled Tshisekedi to activate the Assembly’s ‘age office’ (a committee of its oldest and youngest members) which, under the constitution, takes control of parliamentary business in the absence of a speaker. That then allowed a vote to remove the prime minister, Sylvestre Ilunga Ilunkamba, another Kabila loyalist. The following day, the leader of one of the largest parties in Kabila’s FCC, Modeste Bahati, crossed the floor to join Tshisekedi’s own coalition, the Sacred Union for the Nation (USN). To complete his rout, Tshisekedi also managed shortly afterwards to bring the two long-time opposition heavyweights Jean-Pierre Bemba and Moise Katumbi into the USN.
Taken together, these developments will almost certainly bring an end to the two-year stalemate between Tshisekedi and Kabila, which followed the latter’s election defeat in January 2019. As such, it will be met with relief by the donor community, who have become increasingly exasperated by the general political turmoil.
Taken together, these developments will almost certainly bring an end to the two-year stalemate between Tshisekedi and Kabila, which followed the latter’s election defeat in January 2019. As such, it will be met with relief by the donor community, who have become increasingly exasperated by the general political turmoil.
At a time when the ongoing effects of COVID-19 are driving increasing food insecurity across the country, and while the northeast of the country is experiencing a new Ebola outbreak, donors are hoping that Tshisekedi’s consolidation of control will enable government agencies to function more effectively (even if this is at the expense of a narrowing of the political space). However, the USN itself remains fractious and could present the President with challenges of its own over the medium term.
Expropriation Risk
72 (Medium-High)
TREND ►
As part of his wider consolidation of power, President Tshisekedi has also continued to strengthen his control over Gecamines, the state-owned mining company that has stakes in many of the largest copper and cobalt mines across the country. Having taken control of the Gecamines board last year from Kabila loyalists, he has continued to promote his people to the company’s most senior positions. In late February 2021, Tshisekedi then appointed Gecamines chief executive officer Sama Lukonde Kyenge as prime minister (to replace Sylvestre Ilunga), thereby rendering the state’s and the company’s interests indivisible.
As part of his wider consolidation of power, President Tshisekedi has also continued to strengthen his control over Gecamines, the state-owned mining company that has stakes in many of the largest copper and cobalt mines across the country. Having taken control of the Gecamines board last year from Kabila loyalists, he has continued to promote his people to the company’s most senior positions. In late February 2021, Tshisekedi then appointed Gecamines chief executive officer Sama Lukonde Kyenge as prime minister (to replace Sylvestre Ilunga), thereby rendering the state’s and the company’s interests indivisible.
In this context, there will be nothing to disrupt Tshisekedi’s push towards generating a more business-friendly environment for the sector, which has been central to his platform since coming to power. Before he left office, Kabila had pushed through changes to the country’s 2002 mining code which, if fully implemented, would have raised tax rates on mining profits and doubled to 10% the mandatory stake that all mining projects must give to the state. Tshisekedi will now find it easier to abandon or modify many of these changes.
In this context, there will be nothing to disrupt Tshisekedi’s push towards generating a more business-friendly environment for the sector, which has been central to his platform since coming to power. Before he left office, Kabila had pushed through changes to the country’s 2002 mining code which, if fully implemented, would have raised tax rates on mining profits and doubled to 10% the mandatory stake that all mining projects must give to the state. Tshisekedi will now find it easier to abandon or modify many of these changes.
Political Violence Risk
74 (Medium-High)
TREND ▲
Since the start of the pandemic, there has been a steady increase in fighting among armed groups in the country’s troubled eastern regions, which has included greater violence against civilian targets. In Ituri Province, a rebel group called the Cooperative for Development of Congo (CODECO) has continued to clash with the Congolese Army (FARDC) but is escalating its attacks against villages, which have left dozens dead. The latest wave of tit-for-tat violence involving CODECO, in mid-March 2021, left at least 30 people dead, most of them civilians.
Since the start of the pandemic, there has been a steady increase in fighting among armed groups in the country’s troubled eastern regions, which has included greater violence against civilian targets. In Ituri Province, a rebel group called the Cooperative for Development of Congo (CODECO) has continued to clash with the Congolese Army (FARDC) but is escalating its attacks against villages, which have left dozens dead. The latest wave of tit-for-tat violence involving CODECO, in mid-March 2021, left at least 30 people dead, most of them civilians.
In another part of Ituri Province, and into North Kivu, the long-standing Allied Democratic Forces (ADF) has continued its own offensive against both military and civilian targets. The group is now the most active in the region and operating over a wide area, increasing the security enforcement challenge. Since the start of 2020, the group has carried out dozens of raids, which have left at least 1,000 civilians dead and displaced thousands more. However, in late March 2021, an ADF attack on a village in North Kivu was thwarted by the FARDC, and seven rebels killed. In early May 2021, North Kivu and Ituri were placed under military control due to the violence, although gaps in the military’s capacity will limit the effectiveness of this move.
Meanwhile, in South Kivu Province, tensions continue to run high among ethnically aligned armed groups. With the new Ebola outbreak emerging since early February 2021, centred upon North Kivu, and with the general effects of COVID-19 continuing, the potential for eastern insecurity to increase over the coming months is extremely high.
Terrorism Risk
36 (Medium-Low)
TREND ►
On March 10 2021, the US State Department reclassified the ADF as a designated Foreign Terrorist Organisation, and its head, Seka Musa Baluku, as a Specifically Designated Global Terrorist. When doing so, the State Department referred to the ADF as ‘The Islamic State of Iraq and Syria-Democratic Republic of Congo’ (ISIS-DRC). The move, which was welcomed by the Democratic Republic of the Congo (DRC) government, is largely symbolic given that previous attempts to sanction the group’s international funding streams and recruitment mechanisms (which is the main purpose of the designated terrorist list) have proved largely ineffectual.
On March 10 2021, the US State Department reclassified the ADF as a designated Foreign Terrorist Organisation, and its head, Seka Musa Baluku, as a Specifically Designated Global Terrorist. When doing so, the State Department referred to the ADF as ‘The Islamic State of Iraq and Syria-Democratic Republic of Congo’ (ISIS-DRC). The move, which was welcomed by the Democratic Republic of the Congo (DRC) government, is largely symbolic given that previous attempts to sanction the group’s international funding streams and recruitment mechanisms (which is the main purpose of the designated terrorist list) have proved largely ineffectual.
Moreover, although Islamic State (IS) has claimed that the ADF is part of its organisation, convincing operational evidence is lacking that this is the case. Although the ADF’s leaders are Muslim, the group has developed very different views from IS, and its operations have not historically conformed to those of a terrorist organisation. Nevertheless, its redesignation as such by the US State Department could result in the group switching tactics; this increases the risk that it might start to undertake such attacks.
Moreover, although Islamic State (IS) has claimed that the ADF is part of its organisation, convincing operational evidence is lacking that this is the case. Although the ADF’s leaders are Muslim, the group has developed very different views from IS, and its operations have not historically conformed to those of a terrorist organisation. Nevertheless, its redesignation as such by the US State Department could result in the group switching tactics; this increases the risk that it might start to undertake such attacks.
Exchange Transfer and Trade Sanctions Risk
73 (Medium-High)
TREND ►
In 2020, the DRC experienced its first recession in 18 years, due to COVID-19’s effects. Although the overall contraction was not as sharp as projected (in part, because of higher prices for major commodities, especially copper, the DRC’s largest export-earner) it was still significant at -1.7%. This compares to growth of 4.4% in 2019, and 5.8% in 2018.
Moreover, social spending will likely have to increase significantly soon, as the country responds to a wave of COVID-19-related malnutrition. However, all of this, combined with the response to Tshisekedi’s consolidation of power, makes it less likely that the international community will seek to broaden trade sanctions against the country over the short or even medium term.
Moreover, social spending will likely have to increase significantly soon, as the country responds to a wave of COVID-19-related malnutrition. However, all of this, combined with the response to Tshisekedi’s consolidation of power, makes it less likely that the international community will seek to broaden trade sanctions against the country over the short or even medium term.
Sovereign Default Risk
75 (High)
TREND ►
The country’s commercial loan liabilities, most of which relate to a major Eurobond issue in 2007, are not up for refinancing in 2021. In addition, the country currently has a debt-to-GDP (gross domestic product) ratio of just 21.2%, making it one of the least-indebted African countries.
However, external debt accounts for over 65% of public debt. Most of this is owed to multilateral donors- especially the International Monetary Fund (IMF)- who since COVID-19’s advent have extended emergency finance to the country (including the IMF’s Catastrophe Containment and Relief Trust). With relations between the IMF and DRC slowly improving after several years of difficulties under Kabila, the multilateral community is unlikely to withdraw these kinds of mechanisms.
However, external debt accounts for over 65% of public debt. Most of this is owed to multilateral donors- especially the International Monetary Fund (IMF)- who since COVID-19’s advent have extended emergency finance to the country (including the IMF’s Catastrophe Containment and Relief Trust). With relations between the IMF and DRC slowly improving after several years of difficulties under Kabila, the multilateral community is unlikely to withdraw these kinds of mechanisms.
The multilateral community continues to take a cautious approach towards the public finances (and especially towards the government’s financing gap, currently USD631mn). These finances could deteriorate further in 2021, in the face of softening demand for commodities from China and the continuing global COVID-19-related economic downturn.
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Democratic Republic of Congo
Risk Temperature
73 (Medium-High) -2
TREND ▲
President Felix Tshisekedi continues to consolidate his grip on power, at the expense of his predecessor, Joseph Kabila, and Kabila’s coalition (the Front Common pour le Congo or ‘FCC’). Over recent months, Tshisekedi has orchestrated a sequence of moves aimed at neutralising some of Kabila’s closest parliamentary allies.
This began in December 2020, when Tshisekedi managed to build a parliamentary majority in the lower house (the National Assembly) to vote out Assembly President and Speaker Jeannine Mabunda (one of Kabila’s closest political allies). Zoe Kabila, younger brother of Joseph Kabila and the governor of Tanganyika Province, has also been ousted.
This began in December 2020, when Tshisekedi managed to build a parliamentary majority in the lower house (the National Assembly) to vote out Assembly President and Speaker Jeannine Mabunda (one of Kabila’s closest political allies). Zoe Kabila, younger brother of Joseph Kabila and the governor of Tanganyika Province, has also been ousted.
Mabunda’s removal enabled Tshisekedi to activate the Assembly’s ‘age office’ (a committee of its oldest and youngest members) which, under the constitution, takes control of parliamentary business in the absence of a speaker. That then allowed a vote to remove the prime minister, Sylvestre Ilunga Ilunkamba, another Kabila loyalist. The following day, the leader of one of the largest parties in Kabila’s FCC, Modeste Bahati, crossed the floor to join Tshisekedi’s own coalition, the Sacred Union for the Nation (USN). To complete his rout, Tshisekedi also managed shortly afterwards to bring the two long-time opposition heavyweights Jean-Pierre Bemba and Moise Katumbi into the USN.
Mabunda’s removal enabled Tshisekedi to activate the Assembly’s ‘age office’ (a committee of its oldest and youngest members) which, under the constitution, takes control of parliamentary business in the absence of a speaker. That then allowed a vote to remove the prime minister, Sylvestre Ilunga Ilunkamba, another Kabila loyalist. The following day, the leader of one of the largest parties in Kabila’s FCC, Modeste Bahati, crossed the floor to join Tshisekedi’s own coalition, the Sacred Union for the Nation (USN). To complete his rout, Tshisekedi also managed shortly afterwards to bring the two long-time opposition heavyweights Jean-Pierre Bemba and Moise Katumbi into the USN.
Taken together, these developments will almost certainly bring an end to the two-year stalemate between Tshisekedi and Kabila, which followed the latter’s election defeat in January 2019. As such, it will be met with relief by the donor community, who have become increasingly exasperated by the general political turmoil.
Taken together, these developments will almost certainly bring an end to the two-year stalemate between Tshisekedi and Kabila, which followed the latter’s election defeat in January 2019. As such, it will be met with relief by the donor community, who have become increasingly exasperated by the general political turmoil.
At a time when the ongoing effects of COVID-19 are driving increasing food insecurity across the country, and while the northeast of the country is experiencing a new Ebola outbreak, donors are hoping that Tshisekedi’s consolidation of control will enable government agencies to function more effectively (even if this is at the expense of a narrowing of the political space). However, the USN itself remains fractious and could present the President with challenges of its own over the medium term.
Expropriation Risk
72 (Medium-High)
TREND ►
As part of his wider consolidation of power, President Tshisekedi has also continued to strengthen his control over Gecamines, the state-owned mining company that has stakes in many of the largest copper and cobalt mines across the country. Having taken control of the Gecamines board last year from Kabila loyalists, he has continued to promote his people to the company’s most senior positions. In late February 2021, Tshisekedi then appointed Gecamines chief executive officer Sama Lukonde Kyenge as prime minister (to replace Sylvestre Ilunga), thereby rendering the state’s and the company’s interests indivisible.
As part of his wider consolidation of power, President Tshisekedi has also continued to strengthen his control over Gecamines, the state-owned mining company that has stakes in many of the largest copper and cobalt mines across the country. Having taken control of the Gecamines board last year from Kabila loyalists, he has continued to promote his people to the company’s most senior positions. In late February 2021, Tshisekedi then appointed Gecamines chief executive officer Sama Lukonde Kyenge as prime minister (to replace Sylvestre Ilunga), thereby rendering the state’s and the company’s interests indivisible.
In this context, there will be nothing to disrupt Tshisekedi’s push towards generating a more business-friendly environment for the sector, which has been central to his platform since coming to power. Before he left office, Kabila had pushed through changes to the country’s 2002 mining code which, if fully implemented, would have raised tax rates on mining profits and doubled to 10% the mandatory stake that all mining projects must give to the state. Tshisekedi will now find it easier to abandon or modify many of these changes.
In this context, there will be nothing to disrupt Tshisekedi’s push towards generating a more business-friendly environment for the sector, which has been central to his platform since coming to power. Before he left office, Kabila had pushed through changes to the country’s 2002 mining code which, if fully implemented, would have raised tax rates on mining profits and doubled to 10% the mandatory stake that all mining projects must give to the state. Tshisekedi will now find it easier to abandon or modify many of these changes.
Political Violence Risk
74 (Medium-High)
TREND ▲
Since the start of the pandemic, there has been a steady increase in fighting among armed groups in the country’s troubled eastern regions, which has included greater violence against civilian targets. In Ituri Province, a rebel group called the Cooperative for Development of Congo (CODECO) has continued to clash with the Congolese Army (FARDC) but is escalating its attacks against villages, which have left dozens dead. The latest wave of tit-for-tat violence involving CODECO, in mid-March 2021, left at least 30 people dead, most of them civilians.
Since the start of the pandemic, there has been a steady increase in fighting among armed groups in the country’s troubled eastern regions, which has included greater violence against civilian targets. In Ituri Province, a rebel group called the Cooperative for Development of Congo (CODECO) has continued to clash with the Congolese Army (FARDC) but is escalating its attacks against villages, which have left dozens dead. The latest wave of tit-for-tat violence involving CODECO, in mid-March 2021, left at least 30 people dead, most of them civilians.
In another part of Ituri Province, and into North Kivu, the long-standing Allied Democratic Forces (ADF) has continued its own offensive against both military and civilian targets. The group is now the most active in the region and operating over a wide area, increasing the security enforcement challenge. Since the start of 2020, the group has carried out dozens of raids, which have left at least 1,000 civilians dead and displaced thousands more. However, in late March 2021, an ADF attack on a village in North Kivu was thwarted by the FARDC, and seven rebels killed. In early May 2021, North Kivu and Ituri were placed under military control due to the violence, although gaps in the military’s capacity will limit the effectiveness of this move.
Meanwhile, in South Kivu Province, tensions continue to run high among ethnically aligned armed groups. With the new Ebola outbreak emerging since early February 2021, centred upon North Kivu, and with the general effects of COVID-19 continuing, the potential for eastern insecurity to increase over the coming months is extremely high.
Terrorism Risk
36 (Medium-Low)
TREND ►
On March 10 2021, the US State Department reclassified the ADF as a designated Foreign Terrorist Organisation, and its head, Seka Musa Baluku, as a Specifically Designated Global Terrorist. When doing so, the State Department referred to the ADF as ‘The Islamic State of Iraq and Syria-Democratic Republic of Congo’ (ISIS-DRC). The move, which was welcomed by the Democratic Republic of the Congo (DRC) government, is largely symbolic given that previous attempts to sanction the group’s international funding streams and recruitment mechanisms (which is the main purpose of the designated terrorist list) have proved largely ineffectual.
On March 10 2021, the US State Department reclassified the ADF as a designated Foreign Terrorist Organisation, and its head, Seka Musa Baluku, as a Specifically Designated Global Terrorist. When doing so, the State Department referred to the ADF as ‘The Islamic State of Iraq and Syria-Democratic Republic of Congo’ (ISIS-DRC). The move, which was welcomed by the Democratic Republic of the Congo (DRC) government, is largely symbolic given that previous attempts to sanction the group’s international funding streams and recruitment mechanisms (which is the main purpose of the designated terrorist list) have proved largely ineffectual.
Moreover, although Islamic State (IS) has claimed that the ADF is part of its organisation, convincing operational evidence is lacking that this is the case. Although the ADF’s leaders are Muslim, the group has developed very different views from IS, and its operations have not historically conformed to those of a terrorist organisation. Nevertheless, its redesignation as such by the US State Department could result in the group switching tactics; this increases the risk that it might start to undertake such attacks.
Moreover, although Islamic State (IS) has claimed that the ADF is part of its organisation, convincing operational evidence is lacking that this is the case. Although the ADF’s leaders are Muslim, the group has developed very different views from IS, and its operations have not historically conformed to those of a terrorist organisation. Nevertheless, its redesignation as such by the US State Department could result in the group switching tactics; this increases the risk that it might start to undertake such attacks.
Exchange Transfer and Trade Sanctions Risk
73 (Medium-High)
TREND ►
In 2020, the DRC experienced its first recession in 18 years, due to COVID-19’s effects. Although the overall contraction was not as sharp as projected (in part, because of higher prices for major commodities, especially copper, the DRC’s largest export-earner) it was still significant at -1.7%. This compares to growth of 4.4% in 2019, and 5.8% in 2018.
Moreover, social spending will likely have to increase significantly soon, as the country responds to a wave of COVID-19-related malnutrition. However, all of this, combined with the response to Tshisekedi’s consolidation of power, makes it less likely that the international community will seek to broaden trade sanctions against the country over the short or even medium term.
Moreover, social spending will likely have to increase significantly soon, as the country responds to a wave of COVID-19-related malnutrition. However, all of this, combined with the response to Tshisekedi’s consolidation of power, makes it less likely that the international community will seek to broaden trade sanctions against the country over the short or even medium term.
Sovereign Default Risk
75 (High)
TREND ►
The country’s commercial loan liabilities, most of which relate to a major Eurobond issue in 2007, are not up for refinancing in 2021. In addition, the country currently has a debt-to-GDP (gross domestic product) ratio of just 21.2%, making it one of the least-indebted African countries.
However, external debt accounts for over 65% of public debt. Most of this is owed to multilateral donors- especially the International Monetary Fund (IMF)- who since COVID-19’s advent have extended emergency finance to the country (including the IMF’s Catastrophe Containment and Relief Trust). With relations between the IMF and DRC slowly improving after several years of difficulties under Kabila, the multilateral community is unlikely to withdraw these kinds of mechanisms.
However, external debt accounts for over 65% of public debt. Most of this is owed to multilateral donors- especially the International Monetary Fund (IMF)- who since COVID-19’s advent have extended emergency finance to the country (including the IMF’s Catastrophe Containment and Relief Trust). With relations between the IMF and DRC slowly improving after several years of difficulties under Kabila, the multilateral community is unlikely to withdraw these kinds of mechanisms.
The multilateral community continues to take a cautious approach towards the public finances (and especially towards the government’s financing gap, currently USD631mn). These finances could deteriorate further in 2021, in the face of softening demand for commodities from China and the continuing global COVID-19-related economic downturn.
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