About the Report

This report assesses the strength of the business community 

in the Democratic Republic of Congo (DRC), a constituency 

important to building sustainable peace. The report draws on 

data collected by USIP’s Center for Sustainable Economies, the 

Bureau d’Etudes, de Recherche et de Consulting International 

(BERCI) in the DRC, and UK-based Transparency Research in 

Bukavu in the northeast and Lubumbashi in the south. In the 

survey, respondents were asked to identify the main obstacles 

to business and offer their assessment of what the future 

might hold for the economy. Their responses highlight the 

perceptions and challenges of businesses in conflict-affected 

environments and outline how success can make an important 

difference regarding whether these regions stabilize or remain 

vulnerable to conflict. 

Raymond Gilpin is associate vice president for Sustainable 

Economies at USIP. He leads the Institute’s work on analyzing 

economic relationships during all stages of conflict. Richard 

Downie was a consultant with USIP’s Sustainable Economies 

Center of Innovation in July and August 2009 and is currently 

a fellow in the Africa Program at the Center for Strategic and 

International Studies in Washington, D.C.

The authors are grateful to Dr. Francesca Bomboko of BERCI 

and her team in the DRC for excellent support and complex 

facilitation. Their tireless efforts made the fieldwork possible. 

Alex Hall of Transparency Research coordinated data collection 

and database management. Research assistance by Go Funai is 

gratefully acknowledged. 

1200 17th Street NW • Washington, DC 20036 • 202.457.1700 • fax 202.429.6063

Special Report 234 October 2009

© 2009 by the United States Institute of Peace. 

All rights reserved.

Raymond Gilpin and Richard Downie

Conflict-Business 

Dynamics in the 

Democratic Republic 

of Congo

Summary

•	 The Democratic Republic of Congo (DRC) has enormous economic potential thanks to its 

rich mineral deposits and vast tracts of arable land. Historically, these resources have been 

exploited by predatory leaders and a host of subregional actors. The time is now ripe for 

the DRC to put years of war and economic underdevelopment behind it.

•	 The business community has an important part to play in promoting sustainable peace 

in the DRC. Business communities in Bukavu and Lubumbashi have managed to remain 

profitable in the very trying years following the signing of the 1999 Lusaka peace accord 

by showing great resilience and versatility, primarily outside formal channels.

•	 Congolese businesses face serious obstacles, including poor infrastructure, high taxes, 

extortion, and market distortions. However, respondents expressed relatively little concern 

about insecurity and violence, suggesting that these costs have been internalized or that 

other obstacles impose much greater costs.

•	 DRC businesses neither want nor expect handouts. Respondents would prefer assistance in 

removing barriers to trade, improving infrastructure, and reducing corruption.

•	 Respondents are broadly optimistic about the future and their economic prospects, and 

have a strong sense of being stakeholders in shaping society. This bodes well for the future 

of the DRC, provided public policy can harness this energy and not impede it.

United States Institute of Peace www.usip.org

SPECIAL REPORT

Contents

Battling the Resource Curse 2

National Context 3

Businesspeople 4

Business Environment 5

Perceptions 6

Moving Ahead 8

Recommendations 9
2

Research suggests that a robust business sector can help rebuild postwar economies and 

give citizens a stake in promoting and consolidating peace.1 The DRC, which is in the early 

stages of economic recovery following two devastating wars, offers a testing ground for 

this proposition. The business community showed impressive resilience by continuing to 

operate throughout the conflict and an associated humanitarian crisis, in which as many as 

5.4 million people died.2 As the DRC emerges from war, its business leaders are well placed 

to facilitate the transition toward lasting peace. This survey of businesspeople attempts 

to aid that process by finding out what can be done to improve the business climate in 

two cities located in two of the DRC’s strategically important regions—Bukavu in the east 

and Lubumbashi in the south—where business activity is thriving despite the challenges.

Importantly, though businesspeople cite security and violent conflict as factors hampering economic activity, these are not the most crucial issues. Rather, the more mundane 

problems of unreliable electricity supply, high taxes, and other bureaucratic and logistical 

hurdles are perceived as the largest challenges. Interventions that focus on these obstacles 

stand the best chance of improving economic conditions and promoting peace.

Battling the Resource Curse

The DRC’s enormous resource wealth is a driving force in the regional economy and significantly affects some sectors of the global economy. About one-third of the world’s known 

deposits of cobalt and nearly two-thirds of its coltan lie within the DRC’s borders. The 

country is also extravagantly endowed with copper, cassiterite (tin ore), diamonds, and 

gold. Yet this abundance of riches has led to war and poverty instead of peace and prosperity. Since the 1980s, academics have explored the dynamics behind this resource curse, the 

paradox whereby nations rich in natural resources tend to be poorer and less stable than 

those that are comparatively less endowed. Research has identified a set of economic distortions linked to natural-resource wealth, including the so-called Dutch disease, whereby 

a resource boom causes a nation’s currency to appreciate, harming tradable sectors of the 

economy.3 The resource curse also has political dimensions. Resource wealth is closely 

associated with poor governance, clientelism, and the absence of a social contract between 

ruler and ruled. In such conditions, grievances fester and can easily become violent. Paul 

Collier and Anne Hoeffler have observed that resource-rich countries tend to be poorer and 

that poorer nations are more prone to conflict; civil war in such places is thus a serious 

concern, particularly when the resources can be easily looted, as the DRC’s diamonds can 

be.4 In turn, civil wars fought on territory rich in natural resources tend to drag on, as the 

wealth from the resources often enables the warring parties to sustain their operations and 

offers greedy individuals the opportunity to line their pockets, lowering their incentives to 

lay down arms.5

The DRC’s recent history is a case study of the resource curse. Prior to his overthrow in 

1997, Mobutu Sese Seko organized his regime around the wholesale plunder of the nation’s 

resources for private gain. The government of Laurent Kabila followed his example. Kabila’s 

foreign backers, notably Rwanda and Uganda, took control of large zones in the north and 

east of the DRC and ran them like extensions of their own territories, extracting their minerals and exporting them as their own. The DRC’s exploitation at the hands of its smaller 

neighbors became even more brazen during the Second Congo War, between 1998 and 2003. 

By the end of that conflict period, the extraction of the DRC’s resources involved seven 

foreign governments, sometimes in collusion with mining companies. The peace deal of 

2003 and the elections of 2006 that cemented it may have ended the war formally, but did 

little to extend the writ of the Congolese state, end the fighting, or decelerate the flow of 

stolen resources across its borders. The eastern region of North and South Kivu, in which 

The views expressed in this report do not necessarily 

reflect the views of the United States Institute of Peace, 

which does not advocate specific policy positions.

To request permission to photocopy or reprint materials, 

e-mail: permissions@usip.org

About the Institute

The United States Institute of Peace is an independent, 

nonpartisan institution established and funded by Congress. 

Its goals are to help prevent and resolve violent conflicts, 

promote post-conflict peacebuilding, and increase conflict 

management tools, capacity, and intellectual capital worldwide. The Institute does this by empowering others with 

knowledge, skills, and resources, as well as by its direct 

involvement in conflict zones around the globe.

Board of Directors

J. Robinson West (Chair), Chairman, PFC Energy, Washington, 

D.C. • George E. Moose (Vice Chairman), Adjunct Professor 

of Practice, The George Washington University, Washington, 

D.C. • Anne H. Cahn, Former Scholar in Residence, American 

University, Washington, D.C. • Chester A. Crocker, James R. 

Schlesinger Professor of Strategic Studies, School of Foreign 

Service, Georgetown University, Washington, D.C. • Ikram U. 

Khan, President, Quality Care Consultants, LLC., Las Vegas, 

Nev. • Kerry Kennedy, Human Rights Activist • Stephen D. 

Krasner, Graham H. Stuart Professor of International Relations at Stanford University • Jeremy A. Rabkin, Professor 

of Law, George Mason University, Arlington, Va. • Judy Van 

Rest, Executive Vice President, International Republican 

Institute, Washington, D.C. • Nancy Zirkin, Executive Vice 

President, Leadership Conference on Civil Rights 

Members Ex Officio

Hillary Rodham Clinton, Secretary of State • James N. Miller, 

Principal Deputy Under Secretary of Defense for Policy • Ann E. 

Rondeau, Vice Admiral, U.S. Navy; President, National Defense 

University • Richard H. Solomon, President, United States 

Institute of Peace (nonvoting)
3

Bukavu is situated, continues to suffer from the aftermath of the 1994 Rwandan genocide 

and the ethnic violence it unleashed. The region remains overrun with armed groups and 

the rule of law is virtually nonexistent. However, behind it all, a wartime economy, anchored 

by the organized exploitation of natural resources by militia groups, continues to operate 

unhindered.

National Context

The two cities chosen as the focus of this study offer interesting contrasts, suggesting, first, 

that one-size-fits-all approaches to economic development in the DRC will not work. The 

effects of the Congo wars were not felt uniformly across the country. While Bukavu lay at 

the epicenter of the conflict, Lubumbashi—in the far southeast of the country—remained 

relatively stable. Consequently, the informal economy dominates in Bukavu, while the formal 

economy is more prominent in Lubumbashi. However, war is not the only dynamic to shape 

the economic landscapes of the two cities. The types of natural resources that predominate 

locally are also relevant. In the Katanga region, of which Lubumbashi is the capital, plentiful supplies of copper and cobalt lend themselves to large-scale industrial mining, which 

naturally tends to be a more stable and long-term enterprise. In the Kivus, where cassiterite, 

gold, and diamonds are the main minerals, there are no industrial mines at all. The minerals 

are extracted mainly by small-scale artisanal mining, a more transient enterprise in which 

economic and security uncertainty dominate. Cassiterite production is overseen by troops 

from the government Forces Armées de la République Démocratique du Congo (FARDC) or 

the Hutu Forces Démocratiques de Libération du Rwanda (FDLR), which control the majority 

of the mines.6

Geographical location has also been important in determining the economic directions 

of Bukavu and Lubumbashi. Both cities are close to international borders and exemplify 

the DRC’s relatively open trading environment. Bukavu in particular is an important trading post for Rwanda-bound goods despite the woeful state of the regional transport network. Lax border controls allow unprocessed minerals to slip out of the Kivus with ease, 

depriving the DRC of a significant portion of its wealth. From Lubumbashi, close to the 

Zambian border, copper and cobalt are the main commodities traded, with 90 percent of 

the DRC’s copper exported to Zambia7 via a relatively well-developed transport network. 

The desire to trade the DRC’s commodities from outside the country is understandable 

when one considers the DRC’s high tax rates and the need to pay off an average of ten to 

fifteen officials to complete any business transaction.8 But its effect on the nation’s gross 

domestic product (GDP) is calamitous. The best estimates suggest that the DRC’s official 

export wealth from diamonds, measured at $870 million in 2005, is at least 30 percent 

short of the actual level of exports. The figure for copper, which stood at $58 million, is 

undervalued by 40 percent.9

These figures suggest that the benefits of economic activity in Lubumbashi and 

Bukavu have failed to trickle down to many citizens. The reality is even starker. For many 

people, the unregulated, informal nature of most economic activity in the DRC and its 

symbiotic relationship with armed conflict, at least in Bukavu, has constrained growth 

prospects for most businesses, even though the business sector has taken heroic steps 

to keep from collapsing against overwhelming odds. Entrepreneurs in the survey areas 

have found innovative ways to thrive despite continued insecurity, extortion, corruption, 

and inefficiencies. Barter and informal finance have largely replaced banks, which 

are more costly and slow. Commerce appears to have adapted to an environment of 

continued unrest. In both cities, the battle for resources has prolonged violence and 

insecurity, facilitated economic exploitation, triggered migration flows that have caused 

Entrepreneurs in the survey 

areas have found innovative 

ways to thrive despite continued 

insecurity, extortion, corruption, 

and inefficiencies.
4

social upheaval, caused an overconcentration on mining activities to the detriment of 

agriculture, and wreaked environmental destruction on a vast scale. 

Over a two-week period in August and September 2008, two teams of twenty enumerators were recruited by the Kinshasa-based Bureau d’Etudes, de Recherche et de Consulting 

International (BERCI) and trained and supervised by Transparency Research and USIP. Local 

business directories were supplemented by presurvey research for sampling. The teams 

conducted 1,000 interviews of businesspeople, one half in Bukavu, the other half in Lubumbashi.10

Businesspeople 

The demographic structures of Lubumbashi and Bukavu shed some light on the types of 

business conducted there, underscoring the cities’ reputations as regional mining centers 

and attractive destinations for migrant laborers. Most survey respondents were male: 

70 percent in Lubumbashi and 62 percent in Bukavu. They also tended to be young: on 

average, 32.2 years old in Lubumbashi and 34.9 years old in Bukavu. Moreover, the sample 

of interviewees was ethnically diverse. Twenty-three distinct ethnic groups in Lubumbashi 

and seventeen groups in Bukavu were represented by five or more respondents. Also, respondents in Lubumbashi had more education than those in Bukavu. More than one-quarter of 

the former had been educated up to the tertiary level, compared with fewer than one-fifth 

in the latter. Almost one-fifth of those questioned in Lubumbashi had received some vocational training, while in Bukavu, fewer than one-tenth had.

When respondents were asked what they did for a living, there were substantial differences between the answers given in Bukavu and Lubumbashi. In Bukavu, an overwhelming 

majority—more than 90 percent—described themselves as either retailers or wholesalers, 

which appears to underlie the importance of the informal trade economy in the city. Two 

factors help to explain this result. The first is the city’s location on the Rwandan border, 

which encourages trade and commerce. The second is that operating in a conflict environment limits business options. Buying and selling goods on a small scale is perhaps the only 

viable occupation for most people. 

The stated professions of respondents in Lubumbashi suggest an economy that is much 

more diversified and well established. A total of thirty-two professions were recorded, compared with fourteen in Bukavu. The mining industry in Katanga has led to a concentration 

of ancillary services in Lubumbashi. Hence there are significant numbers of invoice clerks, 

welders, drivers, guards, construction workers, phone operators, and secretaries. More than 

12 percent of respondents described themselves as managers. However, as in Bukavu, the 

single largest profession was sales or retail, with 25 percent of respondents placing themselves in this group.

There were also interesting variations in the size and structure of businesses in both cities. The entrepreneurial, informal nature of the economy in Bukavu is further underlined by 

the higher number of self-owned businesses there: 69 percent, as opposed to 32 percent in 

Lubumbashi. Nearly 30 percent of Bukavu businesses had just one employee; none had more 

than twenty employees. While the trend in Lubumbashi was also toward small businesses, 

a significant proportion—nearly one-fifth—had more than twenty employees. However, 

the self-starting, risk-taking nature of business in Bukavu seemed to offer the potential 

for greater prosperity. Wages tended to be higher despite the lower level of educational 

attainment. The average respondent in Bukavu earned $240 a month compared with $215 a 

month in Lubumbashi. One might have expected that by working for others rather than for 

themselves, respondents in Lubumbashi would have benefited from greater job security. In 

reality, this does not seem to be the case. 
5

Despite the contrasting business environments in Bukavu and Lubumbashi, all the 

survey’s respondents shared one thing in common: self-reliance. The research showed that 

businesses could not count on outside assistance, financial or otherwise. Overall, 96 percent 

of respondents reported receiving no help from the government. Yet, despite the government’s failure to deliver, its reputation for incompetence and corruption, and its general 

absence from daily life—particularly in Bukavu—there was a general expectation that the 

state was the correct agency to administer assistance and improve the economic environment. More than 60 percent of respondents across the two cities believed that the onus for 

tackling the main impediments they faced in their businesses environments should lie with 

the government.

Business Environment

Survey respondents’ views on the business environment in which they operated again 

highlighted the differences between the economic landscapes in Bukavu and Lubumbashi. 

Respondents were asked to identify, in order of importance, the three main problems that 

affected businesses (see figure, p. 6). A wide range of answers were given, many of them 

specific to a respondent’s particular line of work. Perhaps most striking, however, is the relative unimportance of security issues or the threat of violence. While these were mentioned 

as problems—particularly in Bukavu, where the security situation remains volatile—they 

were not regarded as significant. Less than 3 percent of those surveyed in Bukavu mentioned 

insecurity as being a major problem, while the figure in Lubumbashi was just over 2 percent. 

Concerns about crime in general were mentioned more frequently, but only marginally. 

Instead, in Lubumbashi, the most common problem businesses faced was irregular electricity supply, noted by 16 percent of respondents. Unreliable electricity was the secondbiggest problem in Bukavu, where nearly 10 percent of businesses mentioned it. The most 

frequent complaints in Bukavu were extortion and high taxation, which one-fifth of those 

surveyed identified as one of the three largest obstacles to business (see box, p. 7). Taxes 

were less of an issue in Lubumbashi, where they were the fourth-most frequent complaint 

overall. It is unclear from the results which kinds of taxation were the main source of frustration for the people of Bukavu. However, that taxes were less of an issue in Lubumbashi suggests that the blame does not belong with the government; the people of Bukavu operate 

within a war economy where armed groups run the resource extraction process in the Kivus, 

forcing independent operators to pay large commissions to armies and militias. 

A number of other issues emerged as important constraints on economic activity. 

Respondents in Bukavu tended to focus on impediments to trade, including supply of 

goods problems (8 percent of answers), price instability (5 percent), a lack of customers (5 

percent), and exchange rate fluctuations (4 percent). Lubumbashi respondents agreed with 

their compatriots in Bukavu that the supply of goods was a problem (7 percent), but also 

emphasized transport difficulties (5 percent), low wages (5 percent), poor working conditions (5 percent), and water shortages (5 percent).

Several conclusions can be drawn from the above results. That respondents in both 

Bukavu and Lubumbashi regard general market distortions and the lack of infrastructure as 

far greater impediments to doing business than security threats and other forms of instability points toward a high level of resilience among businesses. The security situation remains 

bleak in eastern DRC, where Bukavu is located. Yet businesses appear to regard insecurity as 

a fact of life, so they do not view it as a significant issue in going about their daily activities. 

The capacity to make a living has endured even in the toughest of environments and the 

informal economy is thriving. This suggests huge potential for the business community to 

lead the way in delivering economic growth to the DRC if serious efforts are made to remove 

Respondents...regard general 

market distortions and the lack 

of infrastructure as far greater 

impediments to doing business 

than security threats and other 

forms of instability points 

toward a high level of resilience 

among businesses.
6

market distortions, such as high taxes, and improve the country’s decrepit infrastructure, 

even if pervasive insecurity (especially in the north) and weak governance frustrate work 

on the latter. The survey results also suggest that attempts to formalize what is already a 

thriving informal economy need to be approached with caution. Businesses were forced 

out of formal institutions because of significantly higher costs, bureaucratic inefficiencies, 

onerous delays, and corruption. Strategies to reintegrate businesses operating in the informal sector must be preceded by reforms that address the myriad regulatory, institutional, 

and capacity challenges that have made operating in the formal sector prohibitive. The 

emphasis must be on improving the overall business climate through systemwide reform 

and greater transparency.

That said, the business environments differ markedly in Bukavu and Lubumbashi; the 

types of businesses vary, and respondents in the two cities face different challenges and 

have different sets of priorities. Gender and age also seem to be important in the respondents’ answers. When asked to list the major impediments to business, those under thirty 

years of age were more likely to cite high rents and a lack of customers than were older 

people. Women tended to be more concerned about high rents and, in Lubumbashi at least, 

electricity shortages than their male counterparts. In addition, there were big differences 

in priorities according to business size. The smallest businesses tended to be the most 

severly affected by extortion and high taxes, with 50 percent of traders who worked alone 

saying they were a problem, compared with 39 percent of small businesses (e.g., those with 

between two and ten employees) and 17 percent of larger enterprises. Sole traders also suffered disproportionately from a lack of customers. High rents were a big problem for small 

businesses. Irregular electricity supplies tended to hit sole traders and small businesses 

harder than larger firms, which were more likely to have their own generators. Policy interventions that do not recognize these diverse problems within the DRC’s business community 

would be in danger of failing.

Perceptions

A second set of survey questions attempted to assess the mood of the business community in Bukavu and Lubumbashi by asking respondents to compare the current business 

Main Problems Faced by Businesses in Lubumbashi and Bukavu

Exchange rate instability

Harassment by state officials

Insecurity

Theft/crime

Poor working conditions

Low wages

Water supply

Rent

Lack of customers

Transport problems

Inflation/price instability

Supply of goods problems

Excessive taxation

Irregular electricity supply

Number of responses

Lubumbashi

Bukavu

0 50 100 150 200 250 300 350

Strategies to reintegrate 

businesses operating in the 

informal sector must be 

preceded by reforms that 

address the myriad regulatory, 

institutional, and capacity 

challenges that have made 

operating in the formal sector 

prohibitive. 
7

environment with the recent past and to offer a forecast for the future. When respondents 

were asked to look back one year and compare the economic situation then and now, their 

answers were inconclusive. In Bukavu, 36 percent of those questioned believed the general 

business climate had improved in the previous year, compared with 23 percent who thought 

it had deteriorated. People in Lubumbashi were marginally happier; 42 percent said the 

situation was better and 22 percent said it was worse. However, when people were asked to 

explain their answer by pinpointing, in order of importance, specific improvements to the 

business environment, many backtracked on their original responses. A total of 40 percent 

of people across the two cities either said there had been no improvements at all or failed 

to offer an answer. To put this result in perspective, the next most popular answer was that 

the flow of goods had improved, a response given by less than 8 percent of people. 

The results were similarly inconclusive when people were asked to compare the current 

business climate with the situation earlier in the year. Again, people in Lubumbashi were 

marginally happier with the way things had gone. In Bukavu, opinion was more evenly 

divided between those who thought things had improved and those who thought things 

had worsened. Smaller numbers of people in Bukavu than in Lubumbashi thought the situation had stayed the same, suggesting a greater degree of volatility in South Kivu’s business 

environment compared with that of Katanga. 

When asked for their expectations for the coming year, the most striking feature of the 

responses, in both cities, was businesses’ high level of confidence (see table, page 8). Fully 

73 percent of those surveyed in Lubumbashi believed the general business climate would 

improve, compared with 61 percent in Bukavu. In both cities, just 2 percent of respondents 

thought things would get worse. When questioned about specifics, strong majorities in 

Lubumbashi believed that consumer prices would rise, business costs would fall, and both 

the business infrastructure and the security situation would improve. In Bukavu, there was 

a little less optimism, but not much less: More than half the respondents were sanguine 

about changes in prices, costs, infrastructure, and security. On the issue of security, the 

mood was particularly bullish, as 57 percent of Bukavu businesses thought there would be 

an improvement in the coming year. On the downside, a fear of crime was clearly evident; 

in both cities, optimists on this particular issue were in the minority. 

Overall, however, while there was clearly some doubt about whether or not the business environment had improved in the months before the survey, people’s confidence in 

the future was unshaken. The mood of the business community was buoyant, particularly 

in Lubumbashi, where more people believed that the business climate had improved from 

The Challenges of Doing Business in the DRC

According to the 2009 issue of the World Bank’s Doing Business Project, the DRC ranks at the bottom 

among all countries surveyed, partly because of its onerous tax regime. The study found that the 

average business in the DRC pays thirty-two separate taxes each year and bears a tax burden that 

jeopardizes profitability. Strategies to avoid and evade these taxes are vital components of business 

survival. Thus, most businesses operate outside formal structures. Numerous, opaque, and excessive 

taxation also creates an environment in which corruption thrives.

The problems created by barriers to entry for DRC businesses are reflected in the 155 days 

it takes to register a business and the astounding average of 645 days to enforce contracts. 

Recruiting employees in the formal sector requires filling out numerous forms and weeks of 

delay. Firing workers requires a detailed verification of reasons for the dismissal and separation 

benefits equivalent to thirty-one weeks’ wages. Circumventing these delays and associated 

costs is also an integral part of the DRC business model. The nonformal sector provides a 

refuge, but it is also fraught with difficulties.

Source: Doing Business 2009, World Bank.

The mood of the business 

community was buoyant, 

particularly in Lubumbashi, 

where more people believed 

that the business climate had 

improved from the previous year 

and were more optimistic about 

the future.
8

the previous year and were more optimistic about the future. This difference in optimism 

between the cities is not too surprising and should not be overstated. The overall business 

environment is more settled and predictable in Lubumbashi than in Bukavu, where a sense 

of instability seems to color perspectives. People in Bukavu were slightly more circumspect 

than they were in Lubumbashi—but given the persistent security threat in South Kivu, 

confidence was still remarkably high. 

Also, the headline figures again obscure subtle but important differences between 

old and young, men and women, and different types of enterprise. Overall, those under 

thirty tended to be more optimistic about the future than those over thirty. Women gave 

more measured responses than men, who were more likely to report that things had either 

improved or worsened rather than stayed the same. Small businesses were more likely to 

have reported improvements in the business climate during the past year. Policymakers 

should consider these subtle variations as they attempt to improve conditions for businesses 

in the DRC—conditions that, hopefully, will also contribute to alleviating conflict and making the country a more stable place to work and live.

Moving Ahead

Ensuring that the DRC continues along the path to lasting peace is in the interests not only 

of its own citizens, but of the wider international community. With its great size and mineral 

wealth, the DRC could become a major economic power in Africa. Unfortunately, its history 

since independence has shown that without sound economic policies, possessing great 

natural wealth can lead to disaster. Now that the DRC seems to be emerging from years of 

war, building a strong economy that benefits its citizens must be a top priority if lasting 

peace is to be achieved. As the business community is a vital part of the peace process, it is 

important to assess the strength of the business sector and identify ways in which it might 

be further strengthened. 

This study has shown that in Bukavu and Lubumbashi, the business community is 

resilient, buoyant, and optimistic about the future. Workers in both cities enjoy relatively 

long job tenures. In Bukavu, businesses have survived and even flourished in the midst of 

war by conducting mainly small-scale trading operations outside the formal economy. In 

Lubumbashi, which has been less affected by conflict, a more stable business environment 

has continued to function successfully. The high levels of confidence displayed by the business communities in Bukavu and Lubumbashi augur well for the future of the DRC. People 

who have jobs, run businesses, and make money have a higher stake in their societies and 

Better Same Worse Uncertain

Bukavu

General business climate 61 15 2 22

Consumer prices 53 17 6 24

Business costs 55 15 6 24

Business infrastructure 57 12 6 25

Security 57 9 5 29

Crime 47 6 6 41

All 55 12 5 28

Lubumbashi

General business climate 73 11 2 14

Consumer prices 70 12 1 17

Business costs 68 14 1 17

Business infrastructure 66 14 3 17

Security 68 13 3 16

Crime 45 15 5 35

All 65 13 3 19

The DRC...history since 

independence has shown 

that without sound economic 

policies, possessing great 

natural wealth can lead to 

disaster. 

Respondents’ Expectations for Business Climate in the Coming Year (percent)
9

exhibit a keener interest in maintaining a peaceful environment. Given that the business 

community is already in good health, it is important that intervention strategies transition 

quickly from a humanitarian phase into a secondary peacebuilding phase that focuses on 

helping people to not only survive, but flourish. Policy interventions should recognize the 

sense of optimism in the DRC and attempt to harness it, working in partnership with local 

businesses to make specific improvements to their operating environments.

As the survey makes clear, businesses in Bukavu and Lubumbashi share some common 

problems, but they also operate in very different environments and have different priorities. 

Policy interventions should account for these similarities and differences. In both Bukavu 

and Lubumbashi, tackling the inadequate local infrastructure should be a priority. Ensuring 

that businesses have a reliable power supply is particularly important. So too is addressing 

the problem of high taxes. In Lubumbashi, this problem is more likely to be one of corruption. In Bukavu, however, this issue is intertwined with the security situation and probably 

relates to the unofficial taxes levied by armed groups as well as by corrupt officials. In the 

latter case, it might make sense to focus efforts on freeing up the trading environment 

and helping sole traders and small businesses. In the former, emphasis might be placed 

on assisting small- and medium-sized businesses, developing the transport network, and 

improving working conditions for low-paid employees. 

Overall, however, the survey demonstrates that the business communities of Bukavu and 

Lubumbashi are not helpless; they have done well without outside assistance and do not 

need government interference. In the past, the government has tended to impede rather 

than facilitate trade in any case. Despite this, businesses in Bukavu and Lubumbashi believe 

that the state has a role to play in creating a more stable business environment. Improved 

governance could ensure predictable and transparent regulations, uphold the rule of law, 

and provide the public utilities that businesses need.

Recommendations

Attempts to support the business community in the DRC should focus on:

•	 Addressing the day-to-day concerns of businesspeople. The survey suggests that these are 

less likely to center on fears of insecurity or conflict, and more likely to focus on unreliable 

power supplies and excessive taxes.

•	 Designing post-conflict stabilization programs that can be fully operational in as short a 

time frame as possible.

•	 Finding conflict-sensitive approaches to increasing employment and reducing economic 

distortions.

•	 Capacity building: supporting the creation of strong business institutions, such as chambers of commerce and other business associations, and providing other services that enable 

businesses to access information on international prices, potential clients, and investment 

opportunities.

•	 Improving financial and trade services. Possible interventions might include making credit 

more available and offering savings facilities and trade-friendly banking instruments.

•	 Making the DRC a more attractive destination for foreign investment. The nation is ranked 

at the bottom of the World Bank’s annual Doing Business survey for 2009.11

•	 Avoiding approaches that attempt to push workers from the informal into the formal 

economy too quickly.

•	 Conducting more research into the relationship between armed conflict and excessive 

taxation.

Policy interventions should 

recognize the sense of 

optimism in the DRC and 

attempt to harness it, working 

in partnership with local 

businesses to make specific 

improvements to their operating 

environments.
10

•	 Ensuring that the different priorities of men and women, younger and older people, and 

those working in small or larger businesses are taken into account.
11

Notes

1. See International Alert, Local Business, Local Peace: The Peacebuilding Potential of the Domestic Private Sector 

(London: International Alert, 2006). http://www.international-alert.org/peace_and_economy/peace_and_

economy_projects.php?t=2 (accessed September 15, 2009). This publication highlights the domestic private 

sector’s often overlooked peacebuilding potential. Developed and researched with partner organizations and 

businesspeople from conflict-affected countries around the world, it presents more than twenty case studies 

in which private sector actors have taken proactive steps to address violent conflict. See also United Nations 

Development Programme (UNDP), Creating Value for All: Strategies for Doing Business with the Poor (New 

York: UNDP, 2008). www.undp.org/gimlaunch/docs/GIM%20Report%20Final%20August%202008.pdf (accessed 

September 15, 2009).

2. International Rescue Committee, Mortality in the Democratic Republic of Congo: An Ongoing Crisis (New York and 

Washington, D.C.: International Rescue Committee, 2008), www.theirc.org/special-report/congo-forgotten-crisis.

html (acccessed September 15, 2009).

3. Christine Ebrahim-zadeh, “Dutch Disease: Too Much Wealth Managed Unwisely,” Finance and Development,

vol. 40, no. 1 (March 2003). http://www.imf.org/external/pubs/ft/fandd/2003/03/ebra.htm (accessed 

September 15, 2009).

4. Paul Collier and Anne Hoeffler, “On the Incidence of Civil War in Africa,” Journal of Conflict Resolution, vol. 46, 

no. 1 (February 2002), 13–28.

5. For a good analysis of how resources can sustain conflict, see Philippe Le Billon, “Angola’s Political Economy of 

War: The Role of Oil and Diamonds, 1975–2000,” African Affairs, vol. 100 (2001), 55–80.

6. Global Witness, Under-Mining Peace: Tin—The Explosive Trade in Cassiterite in Eastern DRC (Washington, D.C.: 

Global Witness Publishing, 2005), 22.

7. Hilary Sunman and Nick Bates, Trading For Peace: Achieving Security and Poverty Reduction through Trade in Natural 

Resources in the Great Lakes Area (London: Department for International Development, 2007), 17.

8. Initiative for Central Africa, Natural Resources and Trade Flows in the Great Lakes Region (Kigali: Initiative for 

Central Africa, 2007), 14.

9. Initiative for Central Africa, Natural Resources, 10.

10. The research was carried out by three parties. A senior member of USIP oversaw the project; the UK-based 

organization Transparency Research provided leadership, quality control, and on-the-ground advice; and the 

survey was conducted on the ground in French by a DRC polling firm, the Bureau de Recherchés et de Consulting 

International (BERCI).

11. The World Bank Group Doing Business Project, “Doing Business: Measuring Business Regulations: Economy 

Rankings.” www.doingbusiness.org/economyrankings/ (accessed September 15, 2009). 
Of Related Interest

•	 Disaster in the DRC: Responding to the Humanitarian Crisis in North Kivu by Go Funai and 

Catherine Morris (USIPeace Briefing, December 2008)

•	 Elections in the DRC: The Bemba Surprise by Tatiana Carayannis (Special Report, February 

2008)

•	 Healing and Reintegrating the Victims of Congo’s War by Dorina Bekoe and Christina Parajon 

(USIPeace Briefing, July 2007)

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An online edition of this and related 

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(www.usip.org), together with additional 

information on the subject.