Kinshasa, Democratic Republic of Congo
With an estimated population of between 15 million and 20 million, Kinshasa has about as many French speakers as Paris. By 2050, Kinshasa is forecast to have 29 million people.
For investment firm XSML Capital, the city has been the primary source of its deals in the Democratic Republic of Congo (DRC). “It’s an enormous amount of people on a relatively small surface,” says managing partner Barthout van Slingelandt. XSML makes debt investments in African frontier markets, including DRC, Uganda, Angola and Zambia.
Van Slingelandt observes significant urban development in Kinshasa over the last decade, with new supermarkets and healthcare facilities emerging throughout the city. Despite many residents having limited financial resources, he says there is a substantial part of the population that does have disposable income and “there is money that is going around”.
The DRC has a long history of conflict, political upheaval, and instability. It ranks among the world’s poorest nations, with an estimated 74.6% of its population living on less than $2.15 a day in 2023. The country’s commercial environment is also generally regarded as challenging. Despite these conditions, the DRC has experienced relatively rapid economic growth in recent years. GDP expanded by an average of just over 6% annually from 2010 to 2019. After peaking at 8.8% in 2022, growth remained robust at 6.1% in 2023, supported by a strong mining sector.
A positive about the DRC from an investment perspective, according to Van Slingelandt, is that it is a dollarised economy. Despite having its own currency, transactions are predominantly conducted in US dollars; one can get dollars out of an ATM. This is beneficial for foreign investors who measure their returns in US dollars. Van Slingelandt contrasts this with Nigeria and Egypt, where significant currency depreciation can erode apparent gains. In these countries, investors might be doing well in local currency terms, but once converted to US dollars, the actual returns are substantially diminished.
Van Slingelandt notes that misconceptions about the DRC persist, influenced by media coverage. According to him, approximately nine out of ten stories in English-language media focuses on the country’s troubles, whereas coverage in the French press tends to be more balanced, with a roughly equal mix of positive and negative reports.
XSML primarily invests in consumer-facing industries, ranging from hospitals to fast-moving consumer goods manufacturing and retail.
One of the firm’s first investments in the DRC was Congo Call Center, started in 2006 by a husband and wife team to provide a customer service function for local companies. Initially, the call centre began with 12 employees. The company landed its first major client in 2009, the mobile telephone operator Tigo, which catalysed its growth. Congo Call Center later received an investment from XSML, which helped it expand to about 350 employees today.
Van Slingelandt also highlights a supermarket retailer which XSML has been involved with. Over the past four years, this business has experienced dramatic revenue growth. Additionally, a prominent European retail chain, currently expanding into the DRC, has selected this company as its main local counterpart.
He also mentions a start-up which, in collaboration with local authorities, has introduced an app-based parking service in Kinshasa. Previously, the absence of a formal street parking system contributed significantly to the city’s congestion.
How we made it in Africa will publish our full interview with Barthout van Slingelandt in the coming week.
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