Browsing by Author "Diambwa, Mania Donatien"

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    An analysis of the competitive performance of the Congolese palm oil industry
    (Stellenbosch : Stellenbosch University, 2024-03) Diambwa, Mania Donatien; Van Rooyen, Johan; Stellenbosch University. Faculty of AgriSciences. Dept. of Agricultural Economics.
    ENGLISH SUMMARY: The palm oil industry of the Democratic Republic of the Congo (DRC) provides an interesting case study. Richly endowed with the required natural resource base, the DRC was a leading palm oil producer and the main African exporter of palm oil and second in the world with 150 000+ metric tons from 1961 to 1975. Thereafter and due to neglect and decline, the Congolese palm oil industry reached the point, in the 1990s to 2010, where palm oil had to be imported to meet local demand. Since 2015, indications of recovery have been observed. This study measures and analyses the competitive performance of the Congolese palm oil industry to understand the factors constraining and enhancing competitiveness and to propose strategies for improvement. The New Trade Theory and Porter Diamond model provided a grounded theoretical construct for the analysis as it relates to converting comparative advantages, based on natural resource endowments (for palm oil production in the DRC), into business related competitive advantage positions. The relative trade advantage (RTA), the revealed comparative advantage (RCA), and the normalised revealed comparative advantage (NRCA) were used as quantitative measures, with trade data from FAOSTATS and Trade Map ITC. The RTA measurement shows fluctuating trends for the Congolese palm oil industry from highly competitive to negative ratings, with four phases of competitiveness: Phase 1 - “Post-impendence highly competitive but fluctuating” (1961-1975), with 1 849 as highest RTA and 703 as lowest; Phase 2 - “Decreasing positive competitiveness” (1975-1985), with 489 as highest RTA, and 0 as lowest; Phase 3 - “Neglect and nationalization with marginal to negative competitive performance”(1986-2015), with 50 as highest RTA and -83 as lowest; and Phase 4 - ”Recovery towards competitiveness” (2016 onwards), with 95 as highest RTA and 15 as lowest. From an export competitive performance perspective, RCA and NRCA indices show a marginal positive performance since 2015, indicating some recovery from the net import years. To explore the current reality of the competitive performance of the Congolese palm oil industry, analysis structured through the Porter Diamond model indicated that demand and market conditions (rating 3.4/5) and firm strategy, structure, and rivalry (rating 3.2/5) enhance competitiveness, with production factor conditions (rating 2.4/5) near neutral. Competitive performance is however constrained by weak related and supporting industries (rating 1.7/5), chance factors (rating of 1.8/5), and government policies and support (rating of 1.9/5) Note: 5/5 is viewed as most enhancing; 1/5 most constraining. The conversion of comparative into competitive advantages for the industry thus indicates constraining conditions within the Congolese palm oil industry. Strategies towards improving competitive performance require collaboration between the industry and government and include improving the business climate, power and electricity provision and rebuilding the general infrastructure. Linked to these are actions to be dealt with through private-public cooperation and improved industry value chain collaboration. These include research and development through the upgrading of the Nationale de Recherche Agronomies (INERA), technological innovation, replacement of obsolete equipment and improved processing facilities to increase the extraction rate of palm oil.