How Kinshasa's markets are captured by powerful private interests

(MENAFN- The Conversation) Kinshasa, the capital of the Democratic Republic of the Congo (DRC), is home to 10 million people. With an estimated 400 markets and over 1 million traders , markets are an important supplier of goods and source of livelihood. They are also an important source of revenue for the state.

Our ongoing research found that markets are also a major source of private revenue. A wide variety of actors are in constant competition for their share of revenue. These include market administrators, mayors, security officials, provincial ministers, high ranking bureaucrats, family members of the President, Presidential advisors, family members of high ranking civil servants. All are fighting to get their piece of the market income.

On the markets, private revenue is being collected through what are locally called 'informal taxes'. These aren't entered into formal revenue streams, but are directly received by the civil servants and their superiors. A whole variety of those taxes are been collected on markets. They are referred to by a range of names, from 'hygiene tax', to 'economy tax', or 'standard and conventional safety tax'.

On top of this our research also shows how the majority of the 'formal' and officially acknowledged taxes aren't fed into the formal hierarchy and revenue flow as they are supposed to be. Instead they are kept locally. In other words market administrators and civil servants do not pass on collected taxes, but pocket them.

This leads to a situation in which traders feel they are overburdened by various forms of revenue extraction .

This isn't surprising, as there is an unwritten understanding among Congolese that civil servants should fend for themselves by extracting revenue from citizens. People in the DRC jokingly refer to this practice as 'Article 15' – parlance for an imaginary article in the country's constitution which gives civil servants licence to 'fend for themselves.'

This way of doing things emerged in the 1970s . It was (in)famously launched in a speech delivered by President Mobutu Sese Seko in 1976 in which he famously encouraged his civil servants to 'steal cleverly':

If you want to steal, steal a little cleverly, in a nice way. Only if you steal so much as to become rich overnight, you will be caught.

The speech effectively led to a de-facto privatisation of public services: the state uniform became a way for civil servants to extract revenue.

More surprising, and less documented, is the degree to which higher-level actors intervene to appropriate these revenue streams.

First, higher level political networks play an important role in revenue extraction in the markets. In our research , we show how important revenue flows are directly controlled by higher level political actors. This can happen in one of two ways. Either through direct control of particular taxes. Or spatially, in which markets are divided in different zones of interest, in which various actors are able to extract revenue in 'their' zone.

The high level influence is most explicit in the Marché de la Liberté . This is the most profitable market in Kinshasa, with high symbolic value. It was constructed by former President Laurent Désiré Kabila as a present to the Kinshasa population.

The Marché de la Liberté has been repurposed as a vehicle for private rent generation through all these measures. Firstly, the market isn't governed as a state public entity, but by agents who are financially and politically accountable to political elites. Revenues are collected privately and beyond public scrutiny. Staff aren't employed by the public administration but come from presidential networks. Taxes are not collected by the mandated public servants but by individuals outside the public administration.

Secondly, various actors rely on their personal connections to gain access to the biggest share of (private) revenue – a system which is locally called 'branchement'. In this system, actors rely on links based on family, ethnicity or regional, political party affiliations, or simply through financial linkages: a common practice is to provide financial or in kind incentives to higher-level authorities.

This practice – which also occurs in other sectors such as the police –provides protection which enables and strengthens private extraction. For example, market administrators pay a weekly amount to higher-level civil servants and politicians, which allows the administrators to keep most of the collected market revenue.

The situation in markets such as the Marché de la Liberté aren't stable and prone to conflict. For example, in a number of markets conflicts were encountered between finance officers, market administrators and mayors – all of whom were relying on their respective links such as their political party, the governor or presidential advisors to try and reduce the others' access to income, or even push them out of the market.

In addition, changes in these power configurations at the higher level in turn create changes at the local level. When patrons lose their position – whether this is a minister, high level civil servant, presidential advisor or other – the clients (such as market administrators) lose their protection and access to revenue.

In sum, the outcome for the market traders themselves is rather grim: they are largely dependent on circumstances beyond their control, which they navigate by continuously looking for better connections ('branchement), which should help to protect them- now or in the future. At the same time, this makes the traders vulnerable, due to their dependence on these connections, and due to the strong monetisation of these connections.

Taxation Democratic Republic of Congo African economy Farmers markets informal sector political economy Informal traders small businesses informal sector work Tax fraud informal economy Governance in Africa

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