Congo-Kinshasa: Fall of Goma Hits International Business

The capture of Goma leaves the rebels in a far stronger position, and presents serious difficulties for international businesses.

The capture of Goma by the M23 rebel movement on 20 November 2012 is a game-changer in the long-running battle to control the eastern DR Congo. For the first time since the rebellion was launched in April 2012, the rebels now have control of a significant population base and will therefore benefit from the ability to expand their recruitment and strengthen their financial resources, including through the control of the illegal mineral trade. Moreover, the entire border between the province of Nord Kivu and Rwanda is under rebel control, meaning that it will be far easier for the M23 to receive assistance from their backers in Kigali. President Joseph Kabila now faces a fight to hold onto power, with his critics in Kinshasa likely to demand a change of leadership in order to rescue the situation and prevent even greater territorial losses.

Only the M23's internal weaknesses stand in the way of its continued advance. The realisation that the Congolese military (FARDC) is incapable of guaranteeing security means that the businesses in the country now face an even more uncertain operating environment. The fall of Goma has provided an ample demonstration of the total military incompetence of the FARDC and the almost equal ineffectiveness of MONUSCO, the UN peacekeeping force tasked with supporting the government. In contrast, though hugely outnumbered, M23 forces are well-trained, well-led, relatively well-equipped and have shown considerable tactical acumen. With the rout of the FARDC from their entrenched positions in and around Goma, there is little to stop the M23 from driving south to take Bukavu, capital of Sud Kivu, or from capturing the mineral-rich territory of Masisi, which lies just to the west of Goma. Indeed, with the active support of Rwanda, even the most extreme scenario – that the rebels will carry out their threat to march on Kinshasa – cannot be dismissed as an impossibility in the coming months.

The capture of Goma leaves the rebels in a far stronger position, and presents serious difficulties for international businesses. A significant expansion in the size of rebel forces can be expected, now that the M23 will be able to engage in forced and voluntary recruitment in Goma, a city of up to one million people. Moreover, by seizing the city the M23 will be able to take control of significant economic resources, which will help it to finance expanded operations. Deepening rebel control over the mineral trade is likely to result in increased smuggling to Rwanda and, to a lesser extent, Uganda. This will create additional difficulties for businesses listed with the US Securities and Exchange Commission (SEC), who from 1 January 2013 will be required by the Dodd-Frank Act to provide transparency over whether cassiterite, wolframite, coltan and gold used in their products are associated with conflict in DR Congo. There are credible accusations of Rwanda falsely certifying smuggled minerals as being produced domestically, and companies are therefore unlikely to be able to have confidence in the 'conflict-free' nature of minerals sourced from Rwanda.

However, the ability of the M23 to consolidate its dramatic victory depends on its success in broadening its political base. Capturing Goma will not solve the M23's underlying vulnerabilities. The deep mistrust between the group's two leading figures – Bosco Ntaganda and Sultani Makenga – will continue to threaten the unity of the movement, particularly as the spoils of war are apportioned. Most seriously, the group's greatest asset – the military and financial support supplied by Rwanda – is also the source of its greatest liability, namely its reputation locally as the puppet of a foreign aggressor. As a result, the group will face acute difficulties in attracting local support from outside the Rwandophone population, and will struggle to capture and hold hostile territory with limited manpower and resources. This is particularly the case since Rwanda is likely to come under intense international pressure to curtail its support for the rebellion.

Negotiation could be fatal for Kabila, as he faces nationalist outrage over the loss of Goma. The humiliation of losing control of one of the country's largest cities will prove a severe test of Kabila's authority. Kabila will seek to unify the population against what he portrays as Rwandan aggression, but the president's rivals within the political and military elite may seek to capitalise on widespread anger at the rout of the FARDC. Within hours of Goma's fall, there were reports of angry crowds attacking the offices of the ruling People's Party for Reconstruction and Democracy (PPRD). The risk of a coup is therefore elevated, and will continue to grow if the M23 inflicts further losses on the government, or if new rebel movements emerge to exploit the FARDC's weakness elsewhere in the country, particularly in the province of Katanga where there is significant support for secession.

However, any coup-makers would face enormous difficulties in exercising control over a highly fractious government and over a country characterised by major ethnic and regional cleavages. Indeed, as in Mali in April 2012, any coup could backfire and cause the security vacuum to expand rather than contract. The government has no realistic chance of recapturing Goma in the short term, but making concessions to the M23 would be politically unacceptable to influential sections of the population. There is a huge degree of popular hostility to Rwanda, and any agreement that rewards Kigali's allies would greatly exacerbate the risks of Kabila being removed from power. Indeed, the government has already insisted that Goma's fall will not lead it to enter into negotiations with the M23, although it does claim that it is willing to negotiate directly with Rwanda, which it considers to be the real aggressor. Kabila and Rwandan President Paul Kagame are scheduled to meet for talks in Kampala on 21 November 2012, but an immediate resolution to the crisis is highly unlikely.

The chances of a negotiated settlement are further undermined by the fact that M23 is unsure of its objectives and lacks a clear negotiating strategy. Moreover, both sides acknowledge that simply resurrecting the 2009 peace deal under which a previous Rwandan-backed rebel movement, the CNDP, was integrated into the FARDC would not be a credible solution. The conditions for meaningful negotiations to take place are therefore unlikely to exist without military developments that leave both sides exhausted of fighting.

Rwanda is unlikely to seek a further escalation for the time-being. Rwanda has now achieved its main objective of establishing a buffer zone between itself and the Kinshasa-based government, and is likely to be cautious in increasing its support for the M23. The long-standing enmity between Rwanda and DR Congo means that Kigali has long feared that its security could be seriously threatened if Kabila's government were to succeed in fully reasserting its control over the Kivu provinces. Indeed, Rwanda only made the final decision to support the ex-CNDP rebels that deserted the FARDC after it appeared that Kinshasa might be close to succeeding in its efforts to reduce the influence in Nord Kivu of the ex-CNDP, and, indirectly, of Rwanda itself.

The actual overthrow of Kabila is far less central to Rwanda's interests, since a return to full-scale war for the first time since 2003 would consume huge resources and undermine efforts to create a stable business environment in Rwanda. As a result, Rwanda can be expected to pressure the M23 to halt its advance – at least temporarily – once Goma is secure, thereby allowing international criticism of Rwanda's role in the conflict to subside. The UN Security Council failed to directly condemn Rwanda in a resolution passed hours after Goma's capture, but is likely to do so – and possibly impose sanctions – unless there is a pause in the fighting.

Ben Payton is Africa analyst at Maplecroft, the risk consultancy.

via ThisIsAfrica

Congo-Kinshasa: Fall of Goma Hits International Business

The capture of Goma by the M23 rebel group presents difficulties for businesses as the rebels strengthen their financial resources, including the control of mineral trade