Running a business, including a school, has to be very
frustrating in the Congo. The Congo is ranked as the 3rd most
corrupt business environment of the 168 countries in the world, at least by one
internet search I did before I came over.
(I had mistakenly thought #3 was a good thing, because a higher number
was good on another web site of rankings. It didn’t sound right that the Congo’s
business structure was that pristine, and now I know I gravely misunderstood!)
As if near impassable roads, lack of good drinking water, no postal service to
speak of, and a sketchy electrical supply (electricity went off early Wednesday
morning and we are being told maybe power by the weekend – I am in a university
office and hardwired connected to the internet to post this blog), is not
discouragement enough here in Bunia, it is difficult to navigate the government
rules about business matters.
Like all governments, the Congo assesses customs on imported
goods. But Congo does not have a ‘Walmart’ mentality about imports – import a
lot of stuff and tax it a little to raise a lot of money. Instead, it has a
high customs tax on imported goods which makes the Congo not competitive for
international companies to come in, and hard for local business to be able to
invest in new equipment to expand, or even import parts at a reasonable cost to
keep existing things working. And
because the official customs rate is very high, customs are often ‘negotiated’
at the local level and the monies collected don’t always (often?) reach the
coffers of the government, reinforcing the cycle of high official tariffs and
more ‘negotiated’ rates at the local level. And at the local level, the assessments
may bear little relation to published rates. The University brought in some
computer parts to repair existing equipment at a cost of about $300; customs
assessed over $200, in large part because the local authorities decided it was worth
more. I heard one story (although it was about Uganda customs) in which a
German NGO (US equivalent of a humanitarian not-for-profit org) sent
toothbrushes to distribute, and the ‘customs’ assessed was more than the goods
were worth. These types of imports are supposed to be exempt from any duty, but
local authorities use ‘discretion’ sometimes, to the harm of its own people.
Right now, the university is trying to get 132 refurbished laptops through
customs, and there is a fine pending because a disputed import document. (They
have not started the customs discussion yet.) They are sitting at the airport,
and Ted asked if the university could at least transport them to the school and
keep them locked up, with customs having the key, until the customs can sort
out the fine and duty. But they said doing
that would require the permission of a committee consisting of 5 people, and
only 4 of the people were available to make the decision, so the laptops sit at
the airport, and there is the danger that some will go missing. Whatever the frustrations with, and poor
rules of, the US government may be, they are not so onerous as to make it impossible
for most of us to live and prosper. Here, almost all the people suffer.
Banks are not generally trusted, so the economy is primarily
a cash and carry enterprise. A local bank failed several years back, and many
people lost their money (no such thing as deposit insurance!) which added to
the mistrust. Not many have bank accounts. So you have to carry money with you
everywhere. (But I’m told it used to be much worse in the old days, when
inflation resulted in an exchange rate of 4 million Congolese francs to the
dollar, and buying anything in francs required real muscles.) Most everything
here is purchased and sold in USD; even the university books are kept in USD,
which is easier for me, and probably for the finance people too, as the
exchange rate is 900 CF to the dollar, and that would be a lot of zeros if the
books were stated in CF. But the cash economy makes robbery a more potent
concern. Much of local commerce is conducted at (very!) small local stalls,
called (phonetically) douka in Swahili, and the merchants carry their sales
receipts home at night, and are a target of robbers.
The government requires businesses to pay not only salary to
their employees, but also pay a transport allowance, furnish a home or provide
a rental allowance, and cover the health costs for their employees. Plus, a dependence allowance if you have a
wife, and an allowance for each one of your children. BUT, there is no minimum
wage, so all the allowances are, for all practical purposes, taken into account
first, leaving whatever is left as your salary. Only the salary is subject to
income tax and the equivalent tax of our social security system. Of course,
most people do not have salary jobs. There are few jobs as we think of jobs, many
live on subsistence farming or subsistence selling at their douka.
But ‘the way it is’ can be good for some businesses. A bar
opened just over the wall of the university campus about two years ago, and
they blare loud music every night starting about 8 PM and going until around 2
AM, later on weekends. The music is extremely loud, louder than I can describe.
(We all sleep with ear plugs, and I was very grateful Ted gave some to me when
I arrived, but the music is so loud that I can hear it quite well even with the
ear plugs and this house is not even next to the bar.) The university
complained; it took 22 months for the matter to come to court. The court found
against the bar, agreeing that it was disturbing the peace of the entire
neighborhood, and assessed a fine of $50.
So a win for the bar, which probably earns that much each night in its
first hour of operations. They paid the $50, and the music blares on. That is
the way it is…
But in other ways, business life just goes on. No electricity, but schools open and
businesses open and you work around it. The Witmers have a generator, and run
it a bit, just enough to keep food from spoiling. (That, and they wrap their
refrigerator in a blanket.) A bigger
concern is water, always water. Without
electricity, the well on campus cannot pump, and everyone is in conserve mode.
Fortunately, we have the tank of rain water; most Congolese do not, and Dana
said some come begging for water to drink when the electricity is off for a
long time.