Over the last few months the Congolese franc has dropped significantly against the US dollar, and the biting effects are being felt everywhere in the country.
In the Eastern part of the country’s South Kivu province, prices of foodstuffs and other basic necessities have soared. A 25kg bag of maize flour has risen from 12 dollars to 15 dollars.
As a result, the situation has attracted money changers who sell the US dollar at rates ranging from 1400 Francs to 1600 Francs.
“The authorities should do everything to solve this problem, because next week the rate could go up to 1600 or 2000 Francs. At the border with Rwanda, the dollar is already changing to 1530 francs. We risk starving,” one resident says.
The dollar has been used as DRC’s second currency since the 1990s. Civil society activists have called on authorities to address the issue.
Ide Bakulu is a Public Finance expert in South Kivu province: “We have to reassure the market. And to reassure the market, we need political stability. Two, there’s need for negotiations. As you know when MATATA took office as prime minister, he cut our unilateral and structural cooperation with the institutions like the World Bank and the IMF. Presently, we have no other way to get out of this. We need fresh capital, we need budgetary support in dollars . That is one way of getting out of it.”
DRC’s oil and mining sectors account for around 98 percent of export earnings and they have been badly hit by the ailing commodity market.
The Congolese franc came under pressure after years of relative stability, after the country’s foreign currency reserves declined. In June it had been reported that the country’s central bank only had enough reserves to cover about five weeks worth of imports.