Commodities Buzz: DRC mining sector to sustain growth despite unrest

The ongoing political crisis affecting large parts of the DRC will continue to weigh on household consumption and foreign aid, slowing growth in the non-mining economy. While an acceleration in mining sector production will boost headline growth, even despite the challenging political climate, growth will remain well below potential.

While headline growth in Democratic Republic of Congo (DRC) will accelerate in the coming quarters, gains will not be equally share across the economy. Household consumption will remain under severe pressure due to elevated political risk. Increasing rural violence is driving the dis placement of large numbers of civilians, while President Joseph Kabilas unwillingness to step down and organise national elections will likely trigger foreign donors to withhold aid, limiting government capital projects.

The large mining sector will act as a bright spot for DRC, especially copper and cobalt production, with several large projects coming online in 2018 and 2019. Indeed, this underpins our forecast for real GDP growth to come in at 2.8% and 5% in 2018 and 2019 from an estimated 2.9% in 2017.