Since its peak in the 1980s when coffee was the second highest export in the DRC, the sector has been declining due to systematic constraints and viruses that have wiped out entire yearly productions.
ÉLAN RDC is facilitating changes in the systems that will give coffee producers’ access to improved seeds and agronomic techniques through an outgrower scheme.
ÉLAN RDC has also assisted the formation of an alliance of coffee exporters to advocate for a more enabling export tax system to reignite the sector.
Kambale Kisumba Kamungele, is a coffee exporter, based in Kinshasa who has been working in the coffee industry for many years. International competition, imposing of illegal taxes and a devastating virus have all contributed to the reduction of coffee prices in the DRC and have left him frustrated with the system. Last year he took part in a forum that was facilitated by ÉLAN RDC where exporters discussed the overwhelming financial impact taxation was having on the coffee sector. After this with support from ÉLAN RDC he brought together several coffee exporters in the Kivus to form an association.
With support from ÉLAN RDC, this association formed an advocacy strategy and plan to campaign for tax changes in the coffee sector. Three months later Kambale led the association’s first direct advocacy campaign, with representatives of the association visiting Kinshasa to meet with key government department heads, including the Ministers of Agriculture, Commerce and the Economy.
Kambale said: “Being in the same room as government officials actively involved in agriculture and exports allowed us to raise our concerns about the illegal and numerous taxes imposed on exporters.”
At the mission’s end, a series of recommendations were presented to the Prime Minister, in response to which two commissions were created to investigate the issues presented by the coffee exporters.
As a result of the increased awareness and pressure for change, the government parastatals involved in coffee exports, negotiated several accords that together result in a number of positive changes. These include a cap of 2% on tax levied by the National Office of Coffee (as compared to current levels of 4-4.5%), a streamlining of export procedures and an agreement on how to divide up tax revenue generated from the 0.25% exportation tax allowed under the ‘code agricole’.
Shortly after this, Kambale informed ÉLAN RDC that these changes have already generated a $548 reduction in taxes per container of exported coffee, an annual tax savings estimated at $250,000.
In February 2015 ÉLAN RDC received news from coffee exporters in North Kivu that coffee exports from the past season had risen by 30% in comparison to last year. This increase equated to the production of 1,000T of coffee by approximately 6,578 coffee producers. With an estimated 65,000 coffee growers working in the Kivus this change represented a significant step for the once diminishing sector.
The tax reduction and increase in exports has since inspired other coffee producers and exporters to join the association and participate in the advocacy work, scaling up their efforts to bring about changes to the system. ÉLAN RDC is continuing to work with the associations to improve industry coordination and plan activities for 2015 and as such holds monthly business breakfasts in Kinshasa and Goma with coffee exporters, private sector actors, the Ministries of agriculture, finance and planning and the regulatory bodies.