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- This Market Fundamentals report for the Democratic Republic of the Congo (DRC) presents findings to inform regular market monitoring and analysis in the eastern provinces of the country. The information gathered serves as essential input to food security monitoring and analysis and can be used to support the design of food assistance programs, including but not limited to a Bellmon determination in advance of an FY 2016 USAID Title II funded non-emergency program in the DRC.
- This study is based on a desk review, fieldwork using rapid rural appraisal (RRA) techniques, and stakeholder workshops carried out during the months of April and May 2015 in priority areas first identified by USAID through the Country Development Cooperation Strategy (CDCS) paper, and further refined by Food for Peace (FFP) staff (in Kinshasa and Washington). Those priority provinces include North and South Kivu, Orientale, Katanga, and Kasaï Oriental and Kasaï Occidental. Given USAID’s strong interest in understanding market dynamics in a very specific area of Orientale Province (one main district was identified), the level of detail of reporting is much greater there, but is only valid for a localized area (Ituri District). The analyses for the other provinces represent larger geographic areas but offer less detail.
- Given FEWS NET’s pre-existing knowledge of the important market linkages between eastern DRC and neighboring Zambia, Tanzania, Rwanda, and Uganda, complementary market analyses (desk review and RRA) were carried out by FEWS NET staff in key border crossing areas of those countries as well.
- At the national level, the DRC is structurally deficit in staple food production. National requirements are met through a combination of local production as well as regional and international imports, although important commodity-specific and geographic differences exist. The two main locally produced staple foods in the DRC are cassava and maize. In the easternmost provinces of the DRC, locally produced dry beans, bananas, and potatoes are also important food and incomes sources. Imports of milled rice and edible oil from international markets supplement local production of those commodities.
- Poor and very poor households in eastern DRC are heavily dependent on markets to meet their staple food needs. The number of months during which households are dependent on market purchases varies by livelihood zone.
- The DRC is endowed with enormous potential for agricultural production. Years of neglect to the agriculture sector and supporting services, however, not only limited incentives for the private sector to invest heavily in agriculture, but also resulted in the rampant spread of crop diseases. Nonexistent or heavily deteriorated infrastructure (roads in particular) limits the extent to which commodities are able to circulate from surplus to deficit areas of the DRC.
- This general context has resulted in disjointed marketing systems, with marketing basins in the easternmost areas of the DRC far more integrated with marketing in neighboring countries than with neighboring provinces within the country. Markets in Katanga Province are most dependent on regional markets, particularly Zambia and Tanzania. Markets in eastern Orientale Province are closely integrated with those in Uganda. Markets in North Kivu Province are integrated with those in Uganda and Rwanda. Markets in South Kivu Province are integrated with those in Rwanda, Burundi, and Tanzania. Due to their relatively isolated nature, Kasaï Oriental and Kasaï Occidental Provinces have market linkages but are not part of any particularly strong or vibrant marketing basins.
- Food availability in eastern DRC is determined by local production as well as the availability of imports from regional and international markets. Other factors that influence food availability and access (prices) include persistent civil unrest and conflict. Years of conflict and insecurity have left some of eastern DRC’s most agriculturally productive areas unable to meet local food needs, including parts of Ituri District (Orientale Province), Tanganyika District (Katanga Province), Shabunda and Mwenga territories (South Kivu Province), and Walikale (North Kivu Province). The macroeconomic context since 2009 has been relatively stable, thanks to a relatively stable exchange rate, but the Congolese economy’s relative dependence on mining revenues makes large variations in GDP possible, depending on global market trends.
- Cassava is the most important staple food produced in the DRC, but the distances over which dried cassava are traded are fairly limited. Maize, rice, and dry beans store more easily and are traded over the longest distances. Other locally produced commodities (groundnuts, palm oil, potatoes) are traded over short distances. Orientale Province has three main marketing basins for staple foods: one centered around Kisangani and involving river transport along the Congo River; one centered around Isiro; and one centered around Bunia, involving trade with the northernmost part of North Kivu Province and neighboring Uganda. Orientale Province is self-sufficient in most commodities, except rice and vegetable oil, which are mostly sourced from international markets (via Uganda).
- North and South Kivu Provinces have two to three marketing basins. The one in the northernmost part of North Kivu Province is linked with markets in southeastern Orientale Province, Uganda, Rwanda, and the southern part of North Kivu Province. One marketing basin encompasses the broad areas surrounding Lake Kivu, including the southern part of North Kivu Province (including Goma) and the northern part of South Kivu Province (including Bukavu). The eastern part of South Kivu Province that runs along Lake Tanganyika is easy to access from Bukavu given the relatively good road infrastructure. North Kivu Province is selfsufficient or produces in small surplus most locally produced staple foods, but depends on international markets (via neighboring countries) for rice supplies. South Kivu Province depends on North Kivu Province and neighboring Rwanda and Tanzania to meet local food needs.
- Katanga Province likewise has three marketing basins, with the largest quantities traded in the southernmost basin that includes the greater Lubumbashi area and markets in Zambia. This particular marketing basin is unlike any others studied in eastern DRC given the relatively good local infrastructure (roads and electricity) and relatively industrial nature of food production and processing in that part of the province. The second most dynamic marketing basin is centered on Kalemie and involves trade with Tanganyika District and Tanzania. A third marketing basin in Katanga Province is somewhat linked to markets in Kasaï Oriental Province. Katanga Province is structurally deficit in its most important staple food, maize, and imports large and increasing quantities of maize grain and maize flour from neighboring Zambia.
- Market linkages in the Kasaï Provinces are fairly weak due to the nonexistent or greatly deteriorated state of local infrastructure. Markets are relatively integrated within the territories of the Kasaïs as the distances between markets there are relatively short and the players driving these markets are essentially the same. Integration outside the provinces is extremely limited because of long distances between markets, poor roads, and the scarcity of means of transport, contributing to high transportation and transaction costs. This discourages traders from operating outside of their immediate district or territory.
Source: FEWS NET