Business as usual in the Congo

Running a business, including a school, has to be very frustrating in the Congo. The Congo is ranked as the 3^rd 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.