NEWS & FEATURES
Investing in SMEs in DR Congo
DR Congo is admittedly a challenging business environment, but Jarl Heijstee, head of XSML, which operates the Central Africa SME fund , says “we see opportunities all around.” XSML has thus far invested in a call center and health center in Kinshasa.
Heijstee says that businesses in DR Congo work on relatively high margins, some exceeding 100%. XSML looks at businesses from start-ups to those having existed over 10 years. Heijstee indicates that there are many successful Congolese, as well as foreign, businesspeople in the DR Congo with which to partner or invest. XSML’s decisions are based on the ability of the leadership to execute and proving to be trustworthy, as well as the business opportunity itself.
Heijstee indicates that the opportunities in DR Congo are vast as it is at a low level of development. In a country that has some of the best agricultural land in the world, they import much of their food. There are also opportunities in transport, manufacturing, education, and health. As an investor, the key is to decide what you will focus on.
As any other country, there are also incentives for establishing businesses there. Heijstee points out that the government gives a five-year tax break on new investments/businesses.
One suggestion Heijstee makes is that, as a foreigner, if it is your first venture in the country, Kinshasa or Lubumbashi are likely the best places to start your operations. Kinshasa is the capital city and Lubumbashi, due to mining, is the economic capital.
African and foreign middle market, small and medium enterprises, entrepreneurs, and micro entrepreneurs find significant challenges in doing cross border business, trade, and investment in Africa. In many African countries, there are government programs to support firms entering foreign markets, but they are insufficient to help a broad base of firms tap African markets. This is the gap Afribiz Accelerators™ addresses. The accelerators are able to help local African firms and foreign firms grow simultaneously through a unique combination of networks, resources, and clusters while maintaining a socially inclusive business model which engenders positive relationships with government, business, and social sectors in the countries established.
The Afribiz Accelerator™ is a for-profit, social enterprise model, which focuses on integrating entrepreneurship/leadership training for youth, economic opportunity development for youth, social/business network leverage, an incubator/venture accelerator, SME/entrepreneur venture capital fund, and development of an SME/entrepreneur support industry in each country of operation.
Afribiz™ and Afribiz Accelerator™ are the intellectual property of The Afribiz Foundation established in the United States. The first two accelerators are to be established in Congo Brazzaville and DR Congo in 2013.