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With a population of over 80 million covering an area of western Europe, the real estate market in the DRC rich in minerals is vast, especially for urban centers such as Kinshasa
There are numerous opportunities in the real estate sector of the Democratic Republic of the Congo (Democratic Republic of the Congo) rich in minerals, but potential investors must make sure that they have investigated thoroughly before committing huge resources.
Doing business in the DRC is difficult, with the country often considered one of the most difficult business environments in the world.
Despite the wealth of natural resources, years of corruption, mismanagement and conflict have left the country impoverished and there is still much work to be done to rebuild the DRC.
In the World Bank's Business Facility survey for 2018, the DRC was ranked in 184 out of 190 countries, demonstrating the bad business environment that investors might encounter.
That said, there are also many opportunities for real estate investors looking for a double-digit return over time, despite the challenges facing the country.
The DRC is the most populous country in Central Africa and real estate developers expect its legal and political structures to eventually synchronize to build the country's real estate sector.
The country has vast areas of arable land and is waiting for "large investments".
With a population of over 80 million people covering an area of western Europe, an expected GDP growth of 3.8% for 2019 and significant untapped mineral resources, the DRC certainly has very potential.
The real estate market in the country is vast, especially for urban centers such as Kinshasa, Lubumbashi, Kisangani, Goma, Kolwezi, Bukavu and Matad.
Sustained growth of the population over the last thirty years and the change in socio-economic development have led to rapid development of the Congolese cities and a strong demand for supply.
Currently, the sector is characterized by a very low number of real estate developers and by the lack of institutions specialized in the financing of real estate projects.
The property stands out in response to government efforts to tackle the severe real estate deficit, particularly among urban populations in the cities of Kinshasa and Lubumbashi. However, the price of units (over US $ 25,000) is well above the accessibility scale for a typical family of medium-low income workers in Kinshasa (around US $ 500).
The Democratic Republic of the Congo has a housing deficit of around 4 million units, while the annual housing requirement is close to 250,000 units. Accommodation needs in Kinshasa alone are estimated at around 140,000 units per year, according to the 2018 Report of the Center for Convenient Housing Finance in Africa (CAHF).
Although demand for affordable housing is evidently high, the few past and ongoing housing projects are geared towards the needs of middle-income and wealthy individuals. These individuals earn over $ 1,000 and make up less than 10% of the population).
The dominant sectors of the Congolese economy are mining, agriculture, fishing and forestry. There is also some production, in particular of textiles, cement and wood. The main business centers are the capital, Kinshasa and Lubumbashi, in the mining district of Katanga.
Quick information on Democratic Republic of the Congo (DRC)
Political leadership
On Monday, the Democratic Republic of the Congo was planning to install Felix Tshisekedi as a new president this week after a long and bitter election whose outcome was contested by the runner-up and avoided by many Western nations.
It would signal the first peaceful transfer of power from one president to another in the country from the independence of Belgium in 1960.
The country was seized by a two-year crisis for the succession of Joseph Kabila, who announced last year that he would finally resign after nearly two decades in power. Crowded with a history of bloodshed, the DRC has never had a peaceful shift in power since it gained independence.
Minerals and investments
It may not be the most developed country in the Great Lakes region, but its vast and diverse mineral resources have enormous potential for development. The country is a major supplier of cobalt, copper, diamonds, coltan and tin in global markets.
While minerals such as copper, diamonds and tin are well known to the general public, this may not be the case with cobalt and coltan. Yet the struggles for accessing these important resources have been one of the causes of the long and latent instability in the DRC.
Cobalt is used to build magnets and turbines – gas or gas turbines – because of its resistance to high temperatures. According to the statistics of the US Geological Survey of 2013, the DRC has provided 48% of global cobalt and has about 47% of the world's cobalt reserves.
Logistics and Warehousing
The transport infrastructure of the DRC is very underdeveloped. Previously built infrastructures are now decrepit after years of mismanagement and war. Given these conditions, reliable and capable transportation and storage are in demand.
Cement imports and mineral exports require a change in the sector. Depending on the current infrastructure, both heavy and mining construction struggle to reach full potential. Transportation and storage are necessary to access the most remote parts of the country. With Kinshasa and Lubumbashi at opposite ends, much has yet to happen across the country.
Work hours
The opening hours are usually from Monday to Friday, from 8:00 to 17:00, with a two-hour lunch break, taken between 12:00 and 15:00.
Commercial language
The Democratic Republic of the Congo is a multilingual country that speaks of 242 languages. French is the language of business in the DRC. Languages spoken as Swahili, Lingala, Kituba and Tshiluba are also widely spoken, especially in rural areas.
The country is an expanding circular space in which English as a foreign language, mainly a school subject, has been used for special needs. However, stimulated by the irrepressible wind of globalization and the influx of foreign multinationals and seekers of fortune, its prestige has increased significantly.
Greeting
A handshake is the usual greeting between business partners. It is not unusual for the Congolese to touch on the shoulder or arm while talking to those who are familiar. When they shake someone's hand with their right hand, they can also hold the right forearm with their left hand.
Dress
The light clothes are the best.
Corporate culture
Investors who do business in the DRC will find the Congolese friendly and welcoming. They are generally proud of their work and work hard. Also appearance is important and the Congolese dress elegantly, but with modesty.
Status is important in Congolese culture, even in business, and the elderly and those in authority are respected. Likewise, corporate structures in the DRC are hierarchical. Although the team's ideas are generally welcome, final decisions are normally taken from the top. However, investors doing business in the DRC have often cited a lack of transparency in decision-making as a frustrating issue that may hinder potential business relationships.
The style of communication can be direct, but direct eye contact is usually avoided. Investors should adapt an attitude of patience when they undertake business in the DRC. The decision-making process can be elaborated and it is not uncommon for the meetings to be rescheduled or even canceled at short notice.
Corruption
Corruption and corruption are daily realities and often cited as the major constraints for doing business in the DRC. Although the efforts made in recent years have helped to reduce the problem, corruption remains a real problem in all aspects of the DRC's activities. Investors who work and do business in the country should be careful when it comes to negotiating and the need for special gifts or favors.
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