Harnessing opportunities in DRC’s mineral value chain

The Democratic Republic of Congo (DRC) is known to be rich in mineral resources, with cobalt being a prized commodity. Despite the foreign interest in the cobalt deposits in the country, Henry Wazne, the Managing Director of Sofibanque, highlights a concerning lack of investment in the real economy. Speaking to CNBC Africa at the Mining Indaba 2024 in Cape Town, Wazne emphasizes the urgent need to address the capacity of banks to unlock the potential of the DRC's mineral sector and improve overall risk perception. Wazne points out that there is a significant gap between the required investment, estimated at over one and a half billion, and the capacity of domestic banks to support such ventures. He stresses the necessity for international banks to step in and heavily invest in the DRC. However, he notes a troubling trend of de-risking, with international banks pulling out of the DRC and other African countries. This trend raises questions about the hesitancy of foreign governments, such as France and the US, to invest in critical mineral resources. Despite the mutual benefit of securing the supply chain of critical minerals for the just energy transition, Wazne expresses his confusion over the lack of substantial investment from international banks. The perceived risk of operating in Africa, particularly in the DRC, is a significant barrier that needs to be overcome. Wazne highlights the fact that cobalt, a key mineral for industries like energy, is not found in more stable regions like Switzerland, underscoring the importance of investment in Africa. He warns of the increasing dominance of Chinese investors in the mining sector and the potential for them to expand their influence in the financial sector as well. While acknowledging the growing interest from countries like the United Arab Emirates, Turkey, and Saudi Arabia in the DRC, Wazne points out that actual investment in the real economy remains limited. Despite the presence of European and US delegations, there is a lack of substantial investment to drive economic growth in the country. Wazne calls for a concerted effort from global players to support African governments in unlocking their economic potential. He urges international banks to provide essential financial services and stresses the importance of infrastructure investment to facilitate economic development. Wazne expresses frustration over the lack of a cohesive strategy to support the DRC's emergence, citing the critical need for focused and impactful assistance. He acknowledges the private sector's efforts in driving investment but cautions that much of the significant projects are closely tied to Chinese involvement. Looking ahead, Wazne remains optimistic about the potential of the DRC's mining sector but highlights the urgent need for meaningful international investment and support to realize this potential. He calls for more substantial efforts from developed nations and global institutions to help African countries harness their mineral wealth and drive sustainable economic growth.