Rebranding Africa Forum: the DRC the ace of hearts of the global energy transaction

The Democratic Republic of Congo (DRC) is engaged in a vast campaign to attract investors to help it implement its ambitious Industrialization Master Plan (PDI) at 58.3 billion US dollars, or about 40,000 billion CFA francs. . This planning tool presented on the sidelines of the 8e edition of the Rebranding Africa Forum (RAF) by the Congolese Minister of Industry, Julien Paluku Kahongya, includes two components: economic pools (industrial zones and special economic zones) and infrastructure (transport, energy and digital infrastructure). The country does not want to export some of its raw materials in their raw state, in particular lithium, which leads the race for strategic metals by multinationals and which is considered the new African gold because of its essential role for technology companies ( manufacture of batteries for electric vehicles, telephones and tablets, etc.). It should not delay any longer to adopt a law in this direction, after having set up an incentive framework for investors wishing to transform this resource and many others on the spot, in particular cobalt, manganese, nickel, Bauxite, etc., which play a leading role in the energy and ecological transition for which the mining giant declares itself a “solution country”.

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The DRC is, in fact, well known for its strong endowments in natural and especially mineral resources. The country provides nearly 70% of the world’s cobalt production with an annual production estimated at around 100,000 tons. It has more than 25 million tons of cobalt reserves identified in its subsoil, i.e. 2/3 of the world’s identified reserves, and is thus called upon to play a leading role in the transition to clean and renewable energies as well as the development of efficient and sustainable transport systems in Africa, in accordance with international agendas. For Julien Paluku Kahongya, these rich cobalt endowments offer an opportunity for the African continent to be at the heart of the dynamic battery value chain as well as the revolution driven by the development of the electric vehicle.

Bloomberg

Confined to the role of exporter of raw materials, the DRC, recognizes its government, is at the bottom of the global cobalt value chain, currently capturing only 3% of a value which should reach 300 billion US dollars per year. by 2030. However, a Bloomberg study published in November 2021 shows that the production costs of battery precursors (MNC) in the DRC (39 million USD) are approximately three times lower than in the United States (117 million USD ) and China (USD 112 million); and twice as low as Poland (65 million). On the implementation of the industrialization master plan, a collaboration agreement for the joint operation of the electric battery production project was signed in April 2022, under the facilitation of the Economic Commission for Africa (ECA), between the DRC and Zambia. The 2 States are committed to working together for the realization of the said project, the factories of which will be set up in the DRC. The country also already has a site on which the cross-border Special Economic Zone will be located, which will house this project – the South Industrial Zone, in Haut-Katanga. The space in question has 2000 hectares divided into 4 blocks of 500 hectares each.

Read also: Thierry Hot: “Africa needs less a Marshall Plan, which has been mentioned many times and never applied, than to build and methodically apply attractiveness strategies”

Property tax

Since April 2022, still under the support of ECA, the country has set up the African Center of Excellence for Drums (CAEB), which operates within the Faculty of Polytechnics of the University of Lubumbashi, in partnership with Zambian, Japanese, German universities, etc., in order to train Congolese youth in battery technologies, but also and above all to aim to qualify the local workforce to work in this Congolese and/or African battery industry electric and electric vehicles. Among other advantages granted to investors who develop in special economic zones: 10 years of total exemption from property tax, renewable once after evaluation; 50% reduction in the tax rate from the 21ste year; 10 years of total exemption from property tax, renewable once after assessment; and 50% reduction in the tax rate from the 21e year; 10 years of total exemption from professional tax, renewable once after assessment; application of the exceptional damping system. For companies, total exemption from property tax for 5 years, renewable once after assessment for companies; the 50% tax reduction from the 11the year; the 50% reduction for the purchase of utility vehicle vignettes; 10-year rental income tax exemption renewable once for investors in special economic zones; and 50% reduction in the tax rate from the 21e year.

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To this must be added the total exemption from property tax for 5 years, renewable once after assessment; and 50% tax reduction from the 11e year and total exemption from income tax for 5 years, renewable once after assessment; and the 50% tax reduction from the 11e year, application of the exceptional depreciation system. Moreover, processing on site and creating added value is a major challenge for Africa in general and particularly for the DRC, especially since the International Energy Agency (IEA) predicts that the world demand for strategic metals could quadruple by 2040.

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Rebranding Africa Forum: the DRC the ace of hearts of the global energy transaction


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