Bloomberg | 12 July 2013
Congo seeks to lure investors for $5.7 billion farming plan
By Michael J. Kavanagh
Democratic Republic of Congo will modify a law that restricts foreign ownership of agriculture projects as it seeks to raise financing for a proposed $5.7 billion expansion plan, the Agriculture Ministry said.
The government has already obtained 15 percent of the funds required for the program that targets 6 percent annual growth in the industry, Agriculture Minister Jean-Chrysostome Vahamwiti told reporters today in the capital, Kinshasa. The government will hold a conference in September to help attract more investment, he said.
“We don’t want loans, we want private investment, people who bring their own capital to invest in this country,” Vahamwiti said. Legislation requiring that Congolese citizens or companies own more than 50 percent of agricultural projects is being revised as part of a process of “reassuring eventual investors,” he said.
Economic growth in Congo, the world’s eighth-largest copper producer, is forecast to accelerate to 8.2 percent this year from 7.2 percent last year, according to the government. Agriculture makes up about 22 percent of the country’s $15.6 billion economy, African Development Bank and World Bank data show.
While most of the country’s recent economic growth has come from higher mineral prices, agriculture will be “the permanent successor to mining, which is, unfortunately, unsustainable,” Vahamwiti said.
Reducing Hunger
Congo was tied for last in this year’s United Nations Development Programme Human Development Index, which measures economic and social indicators such as education, health and income. The government expects investment in agriculture to cut hunger in half by 2018, Vahamwiti said.
Currently the country, the biggest in sub-Saharan Africa, uses only about 10 percent of its more than 80 million hectares (198 million acres) of arable land, according to the Food and Agriculture Organization.
“We have much more land than Congolese can develop alone,” said Elvis Mutiri wa Bashara, a member of parliament from the fertile North Kivu province who has proposed eliminating the shareholding provision from the 2011 agriculture law.
The 50 percent rule has halted most new investment in the industry, Mutiri said in an interview in Kinshasa today. “Investors are all saying they’re waiting for the law to change.”
20% Share
Parliament will consider Mutiri’s amendments along with a new proposal by the government reducing the required domestic shareholding to at least 20 percent as early as September, Vahamwiti said.
“Even 20 percent is not a solution,” Mutiri said. “We shouldn’t limit the shareholding in the law. Let the game play out.”
Vahamwiti reassured current investors like Toronto-based palm-oil producer Feronia Inc. (FRN), which expressed uncertainty about whether or not the shareholding rules would apply to them in a July 3 statement on the company’s website. Any new ownership regulations “will not be retro-active,” he said. “Investors need guarantees.”
To contact the reporter on this story: Michael J. Kavanagh in Kinshasa at [email protected]
To contact the editor responsible for this story: Paul Richardson at [email protected]
Legislation requiring that Congolese citizens or companies own more than 50 percent of agricultural projects is being revised as part of a process of “reassuring eventual investors,” says the DRC's Agriculture Minister Jean-Chrysostome Vahamwiti.
Congo seeks to lure investors for $5.7 billion farming plan
By Michael J. Kavanagh
Democratic Republic of Congo will modify a law that restricts foreign ownership of agriculture projects as it seeks to raise financing for a proposed $5.7 billion expansion plan, the Agriculture Ministry said.
The government has already obtained 15 percent of the funds required for the program that targets 6 percent annual growth in the industry, Agriculture Minister Jean-Chrysostome Vahamwiti told reporters today in the capital, Kinshasa. The government will hold a conference in September to help attract more investment, he said.
“We don’t want loans, we want private investment, people who bring their own capital to invest in this country,” Vahamwiti said. Legislation requiring that Congolese citizens or companies own more than 50 percent of agricultural projects is being revised as part of a process of “reassuring eventual investors,” he said.
Economic growth in Congo, the world’s eighth-largest copper producer, is forecast to accelerate to 8.2 percent this year from 7.2 percent last year, according to the government. Agriculture makes up about 22 percent of the country’s $15.6 billion economy, African Development Bank and World Bank data show.
While most of the country’s recent economic growth has come from higher mineral prices, agriculture will be “the permanent successor to mining, which is, unfortunately, unsustainable,” Vahamwiti said.
Reducing Hunger
Congo was tied for last in this year’s United Nations Development Programme Human Development Index, which measures economic and social indicators such as education, health and income. The government expects investment in agriculture to cut hunger in half by 2018, Vahamwiti said.
Currently the country, the biggest in sub-Saharan Africa, uses only about 10 percent of its more than 80 million hectares (198 million acres) of arable land, according to the Food and Agriculture Organization.
“We have much more land than Congolese can develop alone,” said Elvis Mutiri wa Bashara, a member of parliament from the fertile North Kivu province who has proposed eliminating the shareholding provision from the 2011 agriculture law.
The 50 percent rule has halted most new investment in the industry, Mutiri said in an interview in Kinshasa today. “Investors are all saying they’re waiting for the law to change.”
20% Share
Parliament will consider Mutiri’s amendments along with a new proposal by the government reducing the required domestic shareholding to at least 20 percent as early as September, Vahamwiti said.
“Even 20 percent is not a solution,” Mutiri said. “We shouldn’t limit the shareholding in the law. Let the game play out.”
Vahamwiti reassured current investors like Toronto-based palm-oil producer Feronia Inc. (FRN), which expressed uncertainty about whether or not the shareholding rules would apply to them in a July 3 statement on the company’s website. Any new ownership regulations “will not be retro-active,” he said. “Investors need guarantees.”
To contact the reporter on this story: Michael J. Kavanagh in Kinshasa at [email protected]
To contact the editor responsible for this story: Paul Richardson at [email protected]
