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Zaire: how to do business in Africa's "wild west" state.

Special correspondent Francois Misser has just returned from a journey through deepest, darkest Zaire. He has witnessed both the disasters created by the collapse of the state, and the vitality of those who have to suffer the consequences, Zaire's real businessmen - its people.

As soon you arrive at Kinshasa's Ndjili's International Airport, you receive a sobering lesson in the rules of survival in modern Zaire. Bear in mind that almost anyone in authority - military officers and civil guard; health, state security, immigration, and customs officials, get around $4 a week salary. Unless you are President Mobutu's own special guest, you will expected to "contribute" to the upkeep of the officials' families. A Japanese lady in floods of tears had obviously not come to terms with the unofficial rules.

More clued up visitors, like regular businessmen or those working for NGO's, have a special protocol ready and waiting at the airport. It is someone's job to meet them on the tarmac, lead them through the airport and out to safety with a minimum of fuss. It took us only half an hour to exit and it also cost us 'only' NZ 240,000 ($15), but then money is not precisely the object. A Belgian NGO involved in agricultural projects regularly gives bag-fulls of cassava flour to airport staff to ensure a trouble-free passage for its team.

Once one learns the ropes, things get easier. Sometimes a little too easy Sabena's security staff do all the security checks over again before letting passengers board their plane, just in case the Zairean security "forgot" to check that special parcel...

BUYING THE ROAD

Once you leave the airport, the unofficial taxation becomes more frequent and sometimes heavier. On Kinshasa's sun-drenched streets, thirsty traffic gendarmes regularly stop vehicles and demand a "little something to quench the thirst with". "Tariffs" range from NZ 15,000, about one dollar for a taxi, to NZ 50,000 for a truck. For those in a hurry, a delivery of food bags every month (or cash equivalent) suffices. However, in order to "buy the road" properly, one must make sure that all gendarmes working on three separate shifts are satisfied.

But thirsty gendarmes are not the only obstacles to one's progress on the roads. Zairean businessman often find that they have to pay a great deal more in order to almost literally "buy the road". The "Roads Office" company, theoretically the state road repair department, is so useless that people call it the "hole office". Facing it sit the offices of Societe Textile de Kisangani, or Sotexki. Sotexki was recently forced to finance the reconstruction of a bridge over the river Lindi, by providing caterpillar trucks while peasants helped rebuild the road so they could finally evacuate their cotton crop. Sotexki (and the peasants) simply could not survive any other way. Over the last decade, hundreds of Sotexki trucks have fallen to pieces along the hellish tracks that zig-zag Upper Zaire.

Even in 1995, part of the cotton crop had to be airlifted from Isiro to Kisangani, says Manager, Mr Jean Leonard Lidju Dzoza. The result was that Sotexki's 0.5m meters of textile production ranging from bed sheets to wax prints last year represented only one third of its capacity.

Sotexki also averts the looting of its warehouses and offices by providing free uniforms to the military. This is not an isolated case. Other private firms have financed works on the road between Kinshasa and the port of Matadi in Lower Zaire, and Zairean businessmen regularly pay soldiers in other regions of the country too.

TAXI-BIKES, PRIVATE AIRLINES

The recent increase in petrol prices has been a boon to alternative modes of transport. The most common in Risangani are the tolekas, (taxi-bikes) and the djubudjubus (dug-out canoe taxis) whose traffic has increased sizably on the Zaire river. Likewise, private shipping companies have benefited from both the deterioration of the road system and of the decrease in traffic on the state-owned ONATRA river boats. In the Kingabwa suburb of Kinshasa, small, unofficial shipping companies are competing successfully with well-established firms in the formal sector.

Private airlines are also expanding. After the collapse of the national carrier, Air Zaire, two airlines now dominate the market: Zaire Express and Shabair. Time schedules are more or less respected and the catering shows just how far South African firms like Castle (beer) and Huletts (sugar), have penetrated the Zairean market. To them, Zaire is far from a basket case.

There are similar stirrings in the telecoms sector. With the national telephone company, ONPTZ virtually only a name and the Kengo Government logjamed over the company's privatisation which is being prevented by both President Mobutu and the radical opposition, private telecom companies are having a field day.

Telecel and Comcell are competing for the cellular telephone market in the Kinshasa area and the main cities, while large companies use satellite phones on a regular basis. Another system becoming a Zairean standard is the radio network: The largest is run by the Roman Catholic Church.

Paradoxically, in Kisangani, most economic activity has declined in spite of the artisanal diamond mining boom that began in 1989. Diamond dealers' offices, run mostly by Lebanese businessmen associated with civil guard military officers, have mushroomed, but the money is rarely invested in the town. The only exception is the new Palm Beach hotel and restaurant, opened by General Likulia, the Managing Director of the parastatal RVA which regulates air traffic throughout Zaire.

A GOOD YEAR FOR COFFEE

Hundreds of miles away, the capital of Northern Kivu, Goma - which has achieved a fame of sorts as the main site for Rwandan refugees - lives under a virtual state of curfew. Shootings, mostly involving soldiers, occur very night. By day, business continues as usual.

A Director at the regional state owned Zairean Coffee Office (OZACAF), which centralises all the exports, says that 1995 has been quite a good year. A total of 4,000 tons of arabica was exported from the Goma sector alone, twice as much as the year previous.

This improvement is owed to the frequent closure of the Rwandan border because of refugee and security problems. An estimated 2,000 tons of local coffee used to be smuggled every year into Rwanda, where the Government bought it at higher-than-market prices, and used the foreign exchange to obtain imported goods sold later at vast profit in Kigali.

The low intensity tribal war, between the Hutus and the Nandes in the Masisi and Walikale districts which has caused hundreds of deaths since 1993, continues, but rarely affects Northern Kivu production. Neighbours collect the coffee left to grow by the displaced or the dead. Nevertheless, the region exports less than it should through OZACAP; around 1,000 tons were smuggled into Uganda last year alone. On a national level, the 1995 production should have been higher than 1994, and, surprisingly given the level of smuggling, by the end of July it had done just that, reaching 28,216 tons as against 25,419 tons the previous year.

Goma, like most cities of Zaire, shows amazing signs of vitality. The presence of one million refugees in the area pushed commodity prices through the roof, and the deterioration of the roads severely cut food supplies from peasants. As in other towns, like Kisangani or Kinshasa, the urban population has planted maize and beans everywhere - in the public gardens, in their own compound, and even around Goma airstrip.

ELECTRICITY ON THE CHEAP

Nowhere is civil society more organised than in Goma. A couple of years ago, the National Water and Electricity Consumers Union was born here. It has already forced both the electricity corporation SNEL and the water company REGISO to revise its billing system and apply tariffs corresponding to actual consumption.

In Southern Kivu, local peasants have found a cheaper, if more illicit way to get electricity. They call it the dahoula system. In the Walungu zone, they simply hook up pirate lines to SNEL cables. Their logic is simple: Electricity is fire, and according to the tradition of Bashi people, nobody is entitled to ask for money from those who need fire.

Here too, creative imagination flourishes. Carpenters, TV and radio repairers, dressmakers, shoemakers and other craftsmen have set up their own industrial zone in the Kadutu suburb of Bukavu. In the countryside, peasants have started to breed rabbits for food and fur, and donkeys imported from Kenya are becoming the favourite beasts of burden to carry their produce to market. National NGO's are popularising the culture of medicinal plants among peasants to help bring down the cost of medicines, while, pharmacists at the Roman Catholic dioceses are producing their own serums.

Sadly, initiatives like these can only alleviate the collapse of the entire national health system in small ways. In Southern Kivu alone, the state handed over control of three hospitals to the dioces. Most hospitals even lack basics like aspirin; no surprise then that the infant mortality rate is one of highest in Africa: 142 children per thousand die before the age of two.

THE HEART OF THE ECONOMY

The real heart of Zaire's economy beats in Eastern Kasai, at Mbuji-Mayi, the "diamond capital" and now Zaire's second city with 1.5m inhabitants. After some difficult years, the output of the Ministre de Bakwange (MIBA), is increasing again. A total of 5.5m carats was expected for 1995, as against 4.8m in 1994, and according to the Mine's management, that figure should rise to more than 6m by the end of 1996 (although still lower than the 1990 figure of 9.5m).

The improvement is owed to several factors. Unlike the copper giant Gecamines, MIBA is not a parastatal. The state owns 80% of the shares, but the Belgian corporation Sibeka has the remaining 20% and keeps investing. The Government recently took into consideration the appalling conditions under which the company has had to operate, and gave MIBA a tax reprieve.

Its problems have been immense. The river and train route from Kinshasa had all but closed because of the virtual collapse of the ONATRA state shipping company. MIBA and Eastern Kasai also suffered from the blockade imposed on their supplies of food and equipment from the South by the ex-Governor of Shaba, Mr Kyungu, from 1992 until April 1995. Mr Kyungu was only sacked a few months ago.

But this is over now and traffic is improving on the railway from Shaba, operated since July 1995 by the SIZARAIL consortium including South Africa's Transnet and Belgium's Transurb Consult corporations. Last September, new installations allowing an accelerated processing of gravels and kimberlite deposits were set up in the MIBA polygon. Taking into account artisanal production throughout the country as well, total diamond output for the first half of 1995 shows an increase in volume by 33% to 11.6m carats compared with the equivalent period of 1994. Diamonds, which are mainly mined in Eastern Kasai, provided 51% of all Zaire's export earnings.

OLD FOR NEW

Perhaps the greatest victory the Kasaians have won has been to rid themselves of inflation. In 1993, they decided to continue using the old Zaire currency notes and refused to circulate the new ones. A miracle occurred. With the Central Bank no longer printing old notes, the price of a bag of maize on the Mbuji-Mayi market has not moved for two years. This remarkable achievement cannot be duplicated elsewhere in the country however, because of the special diamond factor. There is a high demand for old Zaire notes from diamond diggers, who buy the currency with the dollars being pumped into the Kasai by diamond dealers.

However, Eastern Kasai has inspired the rest of Zaire in another way. Realising that the state could do little for them, they decided to take matters into their own hands. Led by MIBA's top Manager, Mr Jonas Mukamba, they have launched the Conference for the Development of Eastern Kasai.

Organized as a 'brain trust', the Conference managed to create a private university and has ambitions to finance several projects including a $14m hydro-power station at Lubilanji II, which could supply customers and future industries in Mbuji-Mayi. Other projects include poultry and farming.

It is perhaps too early to speak of a revival of Kinshasa's once dizzy night life but music can be heard more often than before at Yolo and Bumbu where local gangs are paid by the neighbourhood to stop the military going on the rampage. Citizens are increasingly trying to provide for everything they need themselves - including security.

Though admirable, the do-it-yourself method cannot yet cope with all needs. Small entrepreneurs resent the collapse of the banking system in particular. But even this problem is not proving unsurmountable, with people across the country fighting inflation by trading in US dollars, Belgian or CFA francs.

Indeed some church missions have become a new breed of bank and have introduced the 'Zairo-Belgian Franc'. Deposits are made in New Zaires and withdrawn at the prevailing daily value. Meantime, the amount on the account is multiplied according to the rate of inflation.

Zaire may have become a country without a state, but it's people are proving that with guile and strength, they do not always need one.

For anyone wishing to do business in "the Wild West State", there are three words of advice: "Adapt, adapt, adapt". The rewards can be staggering.
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Article Details
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Author:Misser, Francois
Publication:African Business
Article Type:Cover Story
Date:Feb 1, 1996
Words:2231
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