After Years of Civil War, Congo’s Economy at a Standstill – Severe Currency Shortage, Almost All Banks Closed

After Years of Civil War, Congo’s Economy at a Standstill – Severe Currency Shortage, Almost All Banks Closed
According to a Reuters report  Congo, the M23 rebels’ latest struggle is to revive the economy. Nearly all banks are closed. There is an acute shortage of currency. Prices of essential goods have increased. Residents are now finding themselves subject to new taxes imposed by the rebels to finance their revolution.

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The M23 rebels, who have defeated the Congolese army and taken control of the eastern region of one of Africa’s most populous countries, are now facing a difficult and practical task.

The long-term success of their rebellion — aimed at overthrowing the current leadership in the capital, Kinshasa — heavily depends on whether they can restore order and prosperity in the territories they control, home to more than five million people.

Nearly all banks are shut. The currency shortage is severe. Supply chain disruptions have driven up the prices of some essential goods. Residents are now being subjected to new taxes imposed by the rebels to fund their movement.

Changes are most visible near the town of Rubaya, where M23 has swiftly consolidated control over a portion of Congo’s vast mineral wealth. The artisanal mines in this area produce about one-sixth of the world’s coltan — a metallic ore crucial for making smartphones and other electronic devices. M23 has now imposed a 15% tax on coltan production.

Rebel administrators are introducing other taxes as well. Private businesses and aid organizations have been handed tax bills. Even small traders selling essentials like bananas, clothing, and cooking charcoal face taxes of up to 20%, despite worsening financial hardship among consumers.

"Customers don’t come anymore," said Rachel Monimpo, a clothing vendor at a market in Goma. "It’s become really hard for us to gather the money to pay these taxes."

Reuters journalists recently visited M23-controlled cities of Goma and Bukavu, as well as the town of Rubaya to the west, speaking with over thirty local officials, residents, traders, and business owners operating there.

This conflict has already displaced more than 4 million people. Numerous armed groups are involved, along with the military forces of three neighboring countries. In the past four months, M23 has rapidly advanced across eastern Congo, forcing hundreds of thousands more to flee.

During the daytime, streets in Goma and Bukavu are bustling with motorcycle taxis and pedestrians. Many businesses remain open. Cross-border activity with neighboring Rwanda is lively — Congolese residents are crossing the border to obtain cash and goods. However, by night, both Goma and Bukavu become mostly deserted, except for rebel patrols and some government-aligned militia presence.

According to the United Nations, the M23 rebels receive support from the Rwandan government. In response, the United States, United Kingdom, Canada, Germany, and the European Union have imposed punitive measures, such as suspending aid and issuing sanctions against Rwandan officials accused of backing the M23 rebellion.