The Republic of the Congo’s economy is currently dominated by the oil sector – accounting for more than 50% of gross domestic product (GDP) and 80% of the country’s exports. The Republic of the Congo is also Africa’s third-largest crude oil producer, with the central African state boasting proven crude oil reserve estimates of 2.9 billion barrels.
While oil has been pivotal to the country’s economy and has generated revenues to support key capital expenditure projects, declining oil production rates, further exacerbated by the 2014-16 oil crisis, and compounded by the adverse impacts of the Covid-19 pandemic, has resulted in the government re-adjusting economic policy to ensure optimal solutions for sustainable economic development with diversifying the economy as a critical contributor.
Fortunately, owing to its abundance in several different types of resources, the central African country’s economic potential is able to transcend revenues from just oil alone. Indeed, the country benefits from enviable mineral and forest resources, vast surface areas of arable land as well as an important hydrographic network most notably, in the Congo River Basin. To-date, whilst these resources have been identified as important for Congo’s economic growth, the central African country has only experienced marginal revenues from them. However, as the government doubles down in collaborative efforts to pursue economic diversification, the aforementioned resources are being earmarked as a central part of policies elaborated for the country’s growth.
Untapped, yet commercially viable, the mining sector is forecast as an additional catalyst for the country’s development by way of attracting foreign direct investment (FDI) for the entire mining value chain.
As sector-specific challenges remain, particularly in the power supply for mining zones located off the country’s electric grid, the government has identified the most pressing issues and outlined key plans to address them. For instance, with regard to small-scale and artisanal mining sites, which may often be located outside major centers without access to any electricity, the government aims to supply gas to these sites to enhance production. In addition, gas and other sources of power may serve to further develop processing, smelting, and refining activities within the sector.
Meanwhile, agriculture is expected to contribute considerably to FDI and play a key role in development, as well. According to the most recent figures, only 2% of the Congo’s arable land is being cultivated. Moreover, with an extremely favorable climate and a strategic location on the Gulf of Guinea, appropriate investment and local capacity building initiatives are key elements expected to drive the industry forward. Crops like cocoa, coffee, cassava or rice, found in the Congo, can optimally serve as quality goods for exportation to neighboring countries. Moreover, as 40% of the population lives off agriculture, focusing on developing larger-scale agricultural projects may serve to increase the living standards of people working in one the country’s main sector of employment.
The country’s former leading economic driver, the Congolese forestry sector represents a particularly interesting area of investment for key stakeholders. Indeed, with its 22.4 million hectares of forest, 14.67 of which are designed as forest concessions, the potential for harvest, transformation and exportation of timber exists. Ailing timber processing units are is a challenge for industrial-scale activity, however an attractive legal framework and smart investment solutions should propel the sector to new heights.
Congo International Energy CONFERENCE 2022
The first-ever Congo International Energy Conference taking place in Brazzaville on the 15th – 17th of June 2022 will reunite regional and international government representatives and industry leaders to discuss the future role of natural gas as a regional and continental solution to address energy poverty, among many other issues.