During Equity Bank 3rd Trade Mission to the Democratic Republic Congo, delegates were amazed to learn that returns on investment in the country is way higher than any other part of the world.
Listening to testimonies from entrepreneurs already invested in the DRC and elsewhere in the world, the delegates were encouraged by invitations to partner for a hand holding exploration into the market.
Indeed, the Kenyan Embassy in DRC is encouraged by Kenyans investment in DRC since inaugural trade mission organized by Equity in 2021.
“Entry through the bank organized missions offers entrepreneurs an opportunity to establish themselves in DRC and the greater Central African countries. We work hand-in-hand with Kenyan companies established in DRC to help deepen market penetration and enhance the visibility of their products,” said Erick Nabwana, the Trade Attache at the Kenya Embassy in Kinshasa.
The attaché, who joined the delegates at the mission in Kinshasa said the mission is organized in a way that entry to DRC through Equity offers the entrepreneurs an opportunity in terms of financial products. “It isa also beneficial to the entrepreneurs in terms of completing transactions between the businesspersons either in Kenya or DRC and EquityBCDC offers that platform that guarantees predictability and certainty enhancing confidence in those who have already exploited the market as they are able to reach a wide scope of clientele,” he said.
On access to DRC Nabwana said Nairobi is only three and a half hours away from Kinshasa and even closer to other parts of the country noting that the Kenya Airways, Jambojet and other carriers in East Africa make the market accessible to the rest of the region.
“The mission is an opportunity for us to work with the private sector for others to also venture into business outside Kenya.”
Nabwana’s view was confirmed by most of the delegates who noted that partnering with Congolese firms reduces the on-ground learning curve. At a site visit to Strategos Plantations in Kinshasa Michael Muthee was offered an opportunity to cultivate maize on 100 hectares out of the firm’s 2,500 hectares farm as a prospectus. The milling company committed to buy all the maize the farm will yield ensuring investor enjoys a smooth entry into the country’s agriculture value chain.
Alot of loose ends have already been tied for us by Equity Bank that has done the heavy lifting for us to simply plug in and play along with partners like Strategos. Here in DRC, we are spoilt for choice,” he said adding that from what he has witnessed the mission Equity command serious respect from everywhere and what it has done for entrepreneurs can only get better.
Strategos Director General Milena Suarez told delegates on the tour of the that company offices that it depends a great deal on small scale maize farmers to supplement its own plantation produce to feed the 20 tonnes daily maize milling capacity.
“We are willing to work with partners for supplies and even farming inputs. We are open to collaboration with partners for distribution of other products on their behalf through our established network outlets,” she said and by evening she had signed a memorandum of understanding with the Muthee to grow maize on the offered hectarage.
“In Kenya we are very crowded competing over very few opportunities. But when you just fly only three hours away to DRC you find that there are more opportunities and very many low-lying fruits businesswise and especially in agriculture.” said Muthee the Managing Director of Bio-Medica that supports food supply chains.
“Food security is a niche business and that is why we have signed an MOU with a company from Latin America, Strategos, launch partner in a joint venture,” he said.
Although maize meal retails at between US$15 and US$17 per 10kg bag in Kinshasa, demand is insatiable. “The Congolese prefer yellow maize which we grow on our plantations in Lusanga and Bandundu but in addition we stock from small scale farmers in the same area,” said Suarez noting that prices are high but because of the weak supply chain that results in high post-harvest wastage due to poor storage, poor roads and distance resulting in inefficient production processes.
“We grow and source maize from Lusanga and Bandundu but want to extend to Bakongo. Our objective is to expand the company to have more farmers to grow more maize, more efficiently which is a real opportunity for you delegates, to partner with us to strengthen the food supply ecosystem,” she said.
Still on the same day Strategos started a discussion of interest with and Nduti management to use its distribution network to sell the factory’s tea in DRC. The move could see more than 6,500 farmers in Murang’a benefit from the new market in a short time.
“Murang’a is the county with the largest number of tea factory companies in Kenya all jostling for of in Kenya for their produce. There is too much tea in warehouses and because Equity has its origins in the tea growing areas of Murang’a and supported production this far. We were persuaded to join the mission to find new markets that offer better returns. We are making inroads in the DRC because our tea has always been sold mostly outside Africa, yet we have lucrative markets like DRC that can offer better returns for our farmers and also close the gap between tea is plucked and when the farmer is paid.” said Nancy Ndung’u the chairperson of Nduti Tea factory.
It is however in the real estate sector that the rate of return is most remarkable. According to Imran Manji, the Commercial Director at a real estate company Safricode, there is no better market in the world to invest in real estate than in DRC. Manji, a Kenyan who is travelled extensively and is well placed to contrast markets, said the DRC is arguably the most profitable of Safricode’s investment destinations that include Dubai and the US.
“Investment in an underdeveloped economy has higher benefits than in developed markets. We have properties in the US, Dubai and Europe but return on investment in Kinshasa is phenomenal,” said Manji narrating how the company’s properties under construction are usually fully booked nd sometimes before they are completed.
“Capital gain here is unbelievably high. While under construction property in Kinshasa is usually 100% sold out,” he told the delegates urging them to consider investing in Kinshasa and the company will find tenants for them.
Giving the example of one-bedroom units currently under construction that were priced at US$200,000 off-plan, Manji said three and a half months later the units were selling at U$350,000 that translates to a whooping US$150,000 capital gain.
“My advice is, if you want to buy a property here, buy when it is under construction. Buy off-plan by paying a downpayment of 20% and we will give you a tenant. I guarantee you that whatever we build, you will get 12% to 13% gain in the course of construction,” implying a loan facility to invest in properties is a sure bet for handsome income.
The EquityBCDC client is on course to build a 36-storey skyscraper that will be the tallest building in DRC once completed.
While language is seemingly a barrier to communication in DRC, for Monica Nduta commerce is not limited by the handicap. “Equity invited me for the first trade mission to DRC and even on this fourth trip I resort to sign language to get by, “I have invested in road construction in Eastern DRC and can state with no doubt in my mind that this is the place to be.”
Nduta has been to DRC three times having come first in 2021 and has followed through her dream of investing in DRC as she narrates.
“ I came the second time alone for a fact-finding mission after the exposure I was given by Equity in the first mission. I wanted to do some due diligence for the work I do in road construction. The third time I went to Eastern DRC where I was struck by the state of roads, and I saw the opportunity. We took a trip on a motorbike to Walikale. After the experience of covering198 kilometres on bad roads and in rain, I was convinced to take up subcontracts offered by the national government. On going back, I thought of working on a solution on the murram roads. The solution is a murram binder and I am here, the fourth time to meet the subcontractors that wanted us to work together,” said Nduta.
For Anne Kanyori, prospects for poultry business in DRC is too good to be true but it is. In a discussion with potential customer, the Director of Attila Poultry Farm in Kajiado agreed to sign a memorandum of understanding to supply containers of chicken for the Kinshasa market.
“I met buyers to partner with and we agreed I will supply the chicken. My production capacity is 100,000 birds at a time, so I have to aggregate stocks from other farmers to meet my supply order,” said Anne.
With unit production price of chicken in Kenya at Ksh450 compared to Uganda’s Ksh300 Anne said the mission has helped her to look at regional trade and investment differently.
“Production per chicken in Uganda is Ksh150 cheaper than in Kenya. I stand to benefit more from rearing the chicken in Uganda and exporting meat to DRC where the retail price is the equivalent of Ksh715 per chicken compared to Ksh550 in Kenya,” said Anne who rears her chicken in Kimana in Kajiado.
With deals done at mostly market levels the delegates jetted out of Kinshasa to Lubumbashi where they hope to explore opportunities of a different kind largely built on agricultural production and mining related sectors.