Would Congo prosper if it dumped the dollar?

Seated on a little chair in the popular Lumumba market, located in the Bandalugwa district of the Congolese capital, Kinshasa, trader Rosette Kungi mixes beans in a large green bucket next to her cardboard price signs that change every day.

In recent months, the Democratic Republic of Congo's local currency, the Franc Congolais, or Congolese franc (CDF), has been heavily devalued.

A year ago, the CDF was trading at around 2,000 to the dollar — now it is trading at around 2,700.

"Prices in Congolese francs are rising all the time," Kungi lamented. "Today, $10 is worth 27,000, or even 28,000 CDF — and soon it will be 30,000."

"A box of fish used to cost $15, but now I buy it for $80," she told DW.

Another trader, Helene Timba, said that she needs to pay the price fluctuations every day. As she waved away the flies that landed on her fresh fish stall, she said that setting the price of goods has become a daily negotiation.

"We buy a bag of beans with dollars, but we sell it in Congolese francs," she said, "and if we want to buy more, we have to buy the dollar, which is making our lives difficult."

Would de-dollarizing Congo help its economy?

The country's economy was informally "dollarized" in 1994, when the DRC was known as Zaire and run by autocrat Mobutu Sese Seko. Inflation had reached an all-time high of 24,000% leading to the collapse of the economy. 

The US dollar is still considered the DRC's main commercial currency — while wages continue to be paid in the national currency.

Most of the country's goods are imported, and the war in Ukraine has caused the price of wheat, oil and other commodities to spike.

Some 62% of Congo's population — or 60 million people — live on less than $2.15 a day, according to World Bank data.

Congolese President Felix Tshisekedi is standing for reelection in elections due to be held later this month. 

"We won't vote if we're hungry," said Rosette Kungi.

"The president must make an effort to abolish this dollar so that our currency regains its value," said another trader. 

Congolese Finance Minister Nicolas Kazadi told reporters at the end of November that the DRC is "too extroverted."

"If we produced in Congolese francs, if we thought in Congolese francs, we would not have suffered the impact of the exchange rate," Kazadi added.

In order to import goods, the Congolese have to obtain dollars, and so the law of supply and demand justifies the Congolese franc losing its value," said economic analyst Al Kitenge.

"As products are imported, people need foreign currency to import them," said Al Kitenge, "but when they come to the market to get foreign currency, demand is so great that the Congolese franc loses value because people are prepared to pay more to get that foreign currency and to import them."

To stabilize its currency, the Central Bank of Congo has injected $150 million into the country's commercial banks — a measure that has brought relief to Congolese households for only a short time.

"A temporary solution," Kitenge pointed out.

Edited by: Keith Walker

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