Democratic Republic of the Congo
The Democratic Republic of the Congo (DRC) is the second largest country in Africa and one of the richest in the world in terms of natural resources. With 80 million hectares (197 million acres) of arable land and 1,100 minerals and precious metals, the DRC has the resources to achieve prosperity for its people. Despite its potential, the DRC often cannot provide adequate security, infrastructure and health care to its estimated 84 million inhabitants, of which 75 percent live on less than two dollars a day.
The accession of Felix Tshisekedi to the presidency in 2019 and his government’s commitment to attracting international and particularly U.S. investment have raised the hopes of the business community for greater openness and transparency. The DRC government is currently working with USTR to regain preferential trade preferences under the Africa Growth and Opportunity Act (AGOA). Tshisekedi created a presidential unit to lead business reform and improve DRC’s standing of 183rd out of 190 countries in the World Bank’s Doing Business 2019 report.
The natural resource and telecommunications sectors have attracted the most foreign investment in the past. The primary minerals sector is the country’s main source of revenue, as exports of copper, cobalt, gold, coltan, diamond, tin and tungsten provide over 95 percent of the DRC’s export revenue. Several breweries and bottlers, a number of large construction firms, and limited textiles production are active. The highly competitive telecommunications industry is expanding into electronic banking. Given the vast needs, there are significant commercial opportunities in aviation, road, rail, water transport, and ports. The agricultural and forestry sectors present opportunities for economic diversification in the DRC.
In 2019 economic growth remained sluggish, with only the extractives sector exhibiting significant growth. After reaching 5.8 percent in 2018, economic growth slowed to 4.4 percent in 2019 owing to the drop in commodity prices. The outbreak of the COVID-19 pandemic sent growth negative as global demand for DRC’s exports dropped.
Overall, businesses in the DRC face numerous challenges, including poor infrastructure and a weak and corrupt bureaucracy. Armed groups remain active in the eastern part of the country, making for a fragile security situation that negatively affects the business environment. Reform of a non-transparent and often corrupt legal system is underway. While laws protecting investors are in effect, the court system is often very slow to make decisions or follow the law, allowing numerous investment disputes to last for years.
|TI Corruption Perceptions Index||2019||168 of 180||http://www.transparency.org/
|World Bank Doing Business Report “Ease of Doing Business”||2019||183 of 190||https://www.doingbusiness.org/
|Global Innovation Index||2019||N/A||http://www.globalinnovationindex.org/
|U.S. FDI in partner country ($M USD, stock positions)||2018||$80||https://apps.bea.gov/
|World Bank GNI per capita||2018||$490||http://data.worldbank.org/
1. Openness To, and Restrictions Upon, Foreign Investment
The DRC remains a challenging environment in which to conduct business. The accession of Felix Tshisekdi to the Presidency in January 2019 and his announcement of his interest in attracting more international investment, particularly from the United States, have raised hopes the DRC government (GDRC) can impose and follow through on policies more favorable to foreign direct investment. To encourage U.S. visitors, in January 2020 the GDRC lowered the price of a single-entry visa to USD 100 and a three month multiple-entry visa to USD 160. The DRC’s rich endowment of natural resources, large population and generally open trading system provide significant potential opportunities for U.S. investors.
Current investment regulations prohibit foreign investors from engaging in informal small retail commerce and ban foreign majority-ownership of agricultural concerns. Investors have expressed concern that the ban on foreign agricultural ownership will stifle any attempts to kick-start the agrarian sector.
The official investment agency, the National Agency for Investment Promotion (ANAPI), provides investment facilitation services for initial investments over USD 200,000, and is mandated to simplify the investment process, make procedures more transparent, assist new foreign investors, and improve the image of the DRC as an investment destination.
There are several public and private sector forums which speak to the government on the investment climate in specific sectors. In December 2019 President Tshisekedi created the business climate cell (CCA) to listen and develop ways to improve the business climate. The CCA in June 2020 presented a roadmap for reform. The public-private Financial and Technical Partners (PTF) mining group represents the different countries with significant mining investments in the DRC. The Federation of Congolese Enterprises (FEC) has a dialogue on business interests with the government.
Limits on Foreign Control and Right to Private Ownership and Establishment
In general, there are no limits on foreigners owning a business or engaging in all forms of remunerative activity, with the exceptions of small commerce and owning more than 49 percent of an agribusiness. Many investors note that in practice the GDRC requires foreign investors to hire local agents and participate in a joint venture with the government or local partners.
In response to private sector complaints, in June 2020 the GDRC repealed a law on subcontracting in the private sector that restricted using foreign entities.
The government promulgated a new mining code in 2018 which increased royalty rates from two to ten percent, raised tax rates on “strategic” metals, and imposed a surcharge on “super profits” of mining companies. The government unilaterally removed a stability clause contained in the previous mining code protecting investors from any new fees or taxes for ten years. Removal of the stability clause may deter future investment in the mining sector. The Tshisekedi government has indicated that it is willing to reopen discussions on the new mining code.
The government does not maintain an organization to screen inbound investment. The Presidency and the ministries serve this purpose de facto.
Other Investment Policy Reviews
The DRC has not undergone a World Trade Organization (WTO), Organization for Economic Cooperation and Development (OECD), or a United Nations Conference on Trade and Development (UNCTAD) Investment Policy Review in the last three years. Cities with high custom clearance traffic use Sydonia, which is an advanced software system for custom administrations in compliance with ASYCUDA. (ASYCUDA is a large technical assistance software program recommended by UNCTAD for custom clearance management.)
Since 2013, the GDRC has operated a “one-stop shop” (https://www.guichetunique.cd/ ) that brings together all the government entities involved in the registration of a company in the DRC. The registration process now officially takes three days, but in practice it can take much longer. Some businesses have reported that the Guichet Unique has considerably shortened and simplified the overall process of business registration.
The GDRC does not prohibit outward investment, nor does it particularly promote it. There are no current government restrictions preventing domestic investors from investing abroad, and there are no current blacklisted countries with which domestic investors are precluded from doing business.
2. Bilateral Investment Agreements and Taxation Treaties
The U.S.-DRC Bilateral Investment Treaty (BIT) was signed in 1984 and entered into force in 1989. The BIT guarantees reciprocal rights and privileges to each country’s investors and provides that, should a claim arise under the treaty, it can be submitted to a dispute resolution mechanism through international arbitration. U.S. companies have at times reported difficulties with the tax authorities from arbitrary enforcement of the taxation code.
Germany, France, Belgium, Italy, South Korea, and China have also signed bilateral investment treaties with the DRC, while South Africa and Kenya are currently negotiating BITs. Lebanon, Côte d’Ivoire, and Burkina Faso have negotiated, but not signed, BITs with the DRC. In October 2016, the DRC and Rwanda signed an agreement on a simplified trade regime covering only small-scale commerce between the countries.
There is no bilateral taxation treaty between the United States and the DRC. In August 2015, Zambia and the DRC signed a bilateral taxation treaty that abolished customs taxes across their common border.
3. Legal Regime
The DRC does not have a legal system to address the issue of competition. By joining the regional legal body OHADA and the regional Central and Southern African trade group COMESA, the DRC plans to implement the standards and regulations of these structures in order to create a more transparent and effective policy to promote competition.
There are no informal regulations run by private or nongovernmental organizations that discriminate against foreign investors. However, some investors perceive the regulations in the mining code as discriminatory against foreign investment.
The GDRC authority on business standards, the Congolese Office of Control (OCC), oversees foreign businesses engaged in the DRC.
There are no formal or informal provisions systematically employed by the GDRC to impede foreign investment. Companies most often complain of facing administrative hurdles as laws and regulations are often poorly or unevenly applied.
Proposed laws and regulations are rarely published in draft format for public discussion and comment; discussion is typically limited to the governmental entity that proposes the draft law and Parliament prior to enactment. Sometimes the government will hold a public hearing after public appeals.
By implementing the OHADA system, the GDRC strengthened its legal framework in the areas of contract, company, and bankruptcy law and set up an accounting system better aligned to international standards. For this purpose, a Coordination Committee was established internally in the GDRC to monitor OHADA implementation.
The government announced the creation of a business unit (CCA) in December 2019 to enact needed regulatory reforms.
The DRC is a member of the Extractive Industries Transparency Initiative (EITI), a multi-stakeholder initiative to increase transparency in transactions between governments and companies in the extractive industries. The DRC’s validation process for compliance with the EITI Standard commenced in November 2018, with an assessment due in 2020. The initial report published by the International EITI Secretariat in April 2019 stated that the DRC EITI failed to adequately address 13 of the requirements of the EITI Standard, with two of these assessed as unmet with inadequate progress. The report also stressed the need to clarify the financial flows of state-owned enterprises (SOEs) in the DRC’s extractive sector.
In 2019 the DRC failed to meet the minimum requirements of fiscal transparency according to the State Department’s Fiscal Transparency report. While the DRC publishes budgets that are publicly available and timely, the published budgets were not reliable indicators of actual government spending.
International Regulatory Considerations
The DRC is a member of several regional economic blocs, including the Southern African Development Community (SADC), the Common Market for Eastern and Southern Africa (COMESA), the Economic Community of Central African States (ECCAS), and the Economic Community of the Great Lakes Countries (ECGLC).
According to the Congolese National Standardization Committee, the DRC has adopted 470 harmonized COMESA standards.
The DRC is a member of the World Trade Organization (WTO) and seeks to comply with Trade Related Investment Measures (TRIM) requirements, including notifying regulations to the WTO Committee on Technical Barriers to Trade (TBT).
Legal System and Judicial Independence
The DRC is a civil law country, and the main provisions of its private law can be traced to the Napoleonic Civil Code. The general characteristics of the Congolese legal system are similar to those of the Belgian system. Various local customary laws regulate both personal status laws and property rights, especially the inheritance and land tenure systems in traditional communities throughout the country. The Congolese legal system is divided into three branches: public law, private law and economic law. Public law regulates legal relationships involving the state or state authority; private law regulates relationships between private persons; and economic law regulates interactions in areas such as labor, trade, mining and investment.
In 2018 the DRC established thirteen commercial courts located in DRC’s main business cities, including Kinshasa, Lubumbashi, Matadi, Boma, Kisangani, and Mbuji-Mayi. These courts are designed to be led by professional judges specializing in commercial matters and exist in parallel to an otherwise inadequate judicial system. A lack of qualified personnel and a reluctance by some DRC jurisdictions to fully recognize OHADA law and institutions have hindered the development of commercial courts.
The current judicial process is not procedurally reliable and its rulings are not always respected. The current executive branch has generally not interfered with the proceedings. The national court system provides an appeals mechanism under the OHADA framework. Legal documents in the DRC can be found at: http://www.leganet.cd/index.htm .
Laws and Regulations on Foreign Direct Investment
The 2002 Investment Code governs most foreign direct investment (FDI), providing for the protection of investments. In practice, an inadequate legal system has insufficiently protected foreign investors in the event of a dispute. Mining, hydrocarbons, finance, and other sectors have sector-specific investment laws.
ANAPI is the DRC agency with the mandate to simplify the investment process, make procedures more transparent, assist new foreign investors, and improve the image of the country as an investment destination (www.investindrc.cd).
The GDRC has a “Guichet Unique,” which is a one-stop shop to simplify business creation, cutting processing time from five months to three days, and reducing incorporation fees from USD 3,000 to USD 120. (www.guichetunique.cd ). A “one-stop-shop” also exists for import-export business, covering aspects such as the collection of taxes and transshipment operations. (https://segucerdc.cd/ ).
Competition and Anti-Trust Laws
There is no national agency that reviews transactions for competition or antitrust-related concerns. As a member of COMESA the DRC follows the COMESA Competition Regulations and rules, and the COMESA competition body regulates competition.
Expropriation and Compensation
The GDRC may proceed with an expropriation when it benefits the public interest, and the person or entity subject to an expropriation should receive fair compensation. The U.S. Embassy is unaware of any new expropriation activities by the GDRC against U.S. citizens in the past three years, but there are a number of existing and long-standing claims made against the GDRC. Some claims have been taken to arbitration, though many arbitral judgments against the GDRC are not paid in a timely manner, if at all.
ICSID Convention and New York Convention
The DRC is a member of the International Center for Settlement of Investment Disputes (ICSID) Convention and a Contracting State to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention). It is important to note that the New York Convention does not apply toward disputes relating to immovable property, which includes mining rights.
Investor-State Dispute Settlement
The DRC is subject to international arbitration. A U.S. mining company sued under the BIT to recover losses suffered when FARDC troops sacked its mine in Kasai Central Province in 1995. The arbitration courts ruled the GDRC liable for damages totaling USD 13 million, and the GDRC started paying back the awarded amount plus interest to the U.S. company.
International Commercial Arbitration and Foreign Courts
The DRC adopted the OHADA Uniform Act on Arbitration (the UAA). The UAA sets out the basic rules applicable to any arbitration where the seat of arbitration is located in an OHADA member state. The requirements set out under Article 5 of the New York Convention for the recognition and enforcement of foreign awards applies where the seat of any arbitration is outside an OHADA member state, or where the parties choose arbitration rules outside the UAA.
OHADA‘s UAA offers an alternative dispute resolution mechanism for settling disputes between two parties where the place of arbitration is situated in a Member State. Disputes must be submitted to the Common Court of Justice and Arbitration (CCJA) in Abidjan in accordance with the provisions of the OHADA Treaty and the OHADA Arbitration Rules.
The UAA, while not directly based on the United Nations Commission on International Trade Law (UNCITRAL) Model Law, is similar in that it provides for the recognition and enforcement of arbitration agreements and arbitral awards and supersedes the national laws on arbitration to the extent that any conflict arises. Arbitral awards with a connection to an OHADA member state are given final and binding status in all OHADA member states, on par with a national court judgment. Support is provided by the CCJA which can rule on the application and interpretation of the UAA.
Arbitral awards rendered in any OHADA Member State are enforceable in any other OHADA member state, subject to obtaining an exequatur (a legal document issued by a sovereign authority allowing a right to be enforced in the authority’s domain of competence) of the competent court of the State in which the award is to be made. Exequaturs are granted unless the award clearly affects public order in that State. Decisions granting or refusing to grant an exequatur may be appealed to the CCJA.
The OHADA Uniform Act on Insolvency Proceedings provides a comprehensive framework not only for companies encountering financial difficulties and seeking relief from the pressing demands of creditors, but also for creditors to file their claims. The GDRC judiciary system has agreed to enforce the OHADA Insolvency Act. Bankruptcy is not criminalized.
According to the World Bank’s Doing Business Report, there were no foreclosure, liquidation or reorganization proceedings filed in the country in 2019, making it impossible to assess the time, cost or outcome for an insolvency proceeding.
4. Industrial Policies
Investment incentives can range from tax breaks to duty exemptions, and are dependent upon the location and type of enterprise, the number of jobs created, the degree of training and promotion of local staff, and the export-producing potential of the operation. Investors who wish to take advantage of customs and tax incentives in the 2002 Investment Code must apply to the National Agency for Investment Promotion (ANAPI), which submits applications to the Ministries of Finance and Planning for final approval. The government does not have a history of providing guarantees or jointly financing FDI projects.
Foreign Trade Zones/Free Ports/Trade Facilitation
The DRC does not have any designated free trade areas or free port zones. President Tshisekedi has signaled that he will revive stalled efforts to join the East African Community (EAC). In November 2019, the Presidency submitted a law authorizing the ratification of the agreement of the African continental free-zone (ZLEC). The law is still pending approval by the Parliament.
Performance and Data Localization Requirements
Foreign investors must negotiate many of the conditions of their investments with ANAPI. Performance requirements agreed upon with ANAPI typically include a timeframe for the investment, use of OHADA accounting procedures and periodic authorized GDRC audits, protection of the environment, periodic progress reports to ANAPI, and the maintenance of international and local norms for the provision of goods and services. The investor must also agree that all imported equipment and capital will remain in-country for at least five years.
The Ministry of Labor controls expatriate residence and work permits. For U.S. companies, the BIT assures the right to hire staff of their choice to fill some management positions, but companies agree to pay a special tax on expatriate salaries. Visa, residence or work permit requirements are not discriminatory or excessively onerous, and are not designed to prevent or discourage foreigners from investing in the DRC.
The DRC does not have specific legislation on data storage or limits on the transmission of data.
5. Protection of Property Rights
The DRC’s Constitution protects private property ownership without discriminating between foreign and domestic investors. Despite this provision, the GDRC has acknowledged the absence of enforcement protecting property rights. Congolese law related to real property rights enumerates provisions for mortgages and liens. Real property (buildings and land) is protected and registered through the Ministry of Land’s Office of the Mortgage Registrar. Land registration may not fully protect property owners, as records can be incomplete and legal disputes over land deals are common. Many owners lack a clear registered title to the land. In addition, there is no specific regulation of real property lease or acquisition.
Ownership interest in personal property (e.g. equipment, vehicles, etc.) is protected and registered through the Ministry of the Interior’s Office of the Notary.
Intellectual Property Rights
Intellectual property rights (IPR) are legally protected in the DRC, but enforcement of IPR regulations is limited. The DRC’s intellectual property laws date from the 1980s and remain in force. However, enforcement is weak, and IPR theft is common. The country is a signatory to a number of relevant agreements with international organizations such as the World Intellectual Property Organization (WIPO) and the World Trade Organization (WTO) and is subject to the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). The government does not keep a record of IPR violations.
The DRC is not included in the U.S. Trade Representative (USTR) Special 301 Report or Notorious Markets List.
For additional information about national laws and points of contact at local IPR offices, please see WIPO’s country profiles at http://www.wipo.int/directory/en/.
6. Financial Sector
Capital Market and Portfolio Investment
Portfolio investment is nonexistent in the DRC and there is no domestic stock market. A small number of private equity firms are actively investing in the mining industry. The institutional investor base is not well developed, with only an insurance company and a state pension fund as participants. There is no market for derivatives in the country. Cross-shareholding and stable shareholding arrangements are also not common. Credit is allocated on market terms, but there are occasional complaints about unfair privileges extended to certain investors in profitable sectors such as mining and telecommunications.
Although reforms have been initiated, the Congolese financial system remains small, heavily dollarized, characterized by fragile balance sheets, and cumbersome to use. Further reforms are needed to strengthen the financial system, support its expansion, and spur economic growth. Inadequate risk-based controls, weak enforcement of regulations, low profitability, and excessive reliance on demand deposit undermine the shock resilience of the financial system.
The Central Bank of Congo (BCC) refrains from payments and transfers on current international transactions. The DRC’s capital market remains underdeveloped and consists mainly of the issuance of treasury bonds. In 2019, the BCC issued its first domestic bond in 24 years, which was oversubscribed. Most of the buyers were local Congolese banks.
It is possible for foreign firms to borrow from local banks, but their options are limited. Maturities for loans are usually limited to 3-6 months, and interest rates are typically around 16-21 percent. The inconsistency of the legal system, the often-cumbersome business climate, and the difficulty in obtaining inter-bank financing discourages banks from providing long-term loans. There are limited possibilities to finance major projects in the domestic currency, the Congolese franc (CDF).
Money and Banking system
The Congolese financial system is improving but it remains fragile. The BCC controls monetary policy and regulates the banking system. Banks are concentrated primarily in Kinshasa, Kongo Central, North and South Kivu, and Haut Katanga provinces. Banking rate penetration is roughly 7 percent or about 4.1 million accounts, which places the country among the most under-banked nations in the world. Mobile banking has the potential to greatly increase banking customers as an estimated 35 million Congolese use mobile phones.
There is no debt market. The financial health of DRC banks is fragile, reflecting high operating costs and exchange rates. The situation improved in 2019 as deposits have increased. Fees charged by banks are a major source of revenue.
The financial system is mostly banking-based with aggregate asset holdings estimated at USD 5.1 billion. Among the five largest banks, four are local and one is controlled by foreign holdings. The five largest banks hold almost 65 percent of bank deposits and more than 60 percent of total banks assets, about USD 3.1 billion. There are no statistics on non-performing loans, as many banks only record the balance due instead of the total amount of their non-performing loans.
There is one correspondent bank, Citigroup. All foreign banks accredited by the BCC are considered Congolese banks with foreign capital and fall under the provisions and regulations covering the credit institutions’ activities in the DRC There are no restrictions on foreigners establishing an account in a DRC bank.
Foreign Exchange and Remittance
The international transfer of funds is permitted when channeled through local commercial banks. On average, bank declaration requirements and payments for international transfers take less than one week to complete. The Central Bank is responsible for regulating foreign exchange and trade. The only currency restriction imposed on travelers is a USD 10,000 limit on the amount an individual can carry when entering or leaving the DRC.
The GDRC requires the BCC to license exporters and importers. The DRC’s informal foreign exchange market is large and unregulated and offers exchange rates slightly more favorable than the official rate. BCC regulations set the Congolese franc (CDF) as the main currency in all transactions within the DRC, required for the payment of fees in education, medical care, water and electricity consumption, residential rents, and national taxes. Exceptions to this rule occur where both parties involved and the appropriate monetary officials agree to use another currency.
There are no legal restrictions on converting or transferring funds. Exchange regulations require a 60 day waiting period for in-country foreigners to remit income. Foreign investors may remit through parallel markets when they are legally established and recognized by the Central Bank.
Sovereign Wealth Funds
The DRC does not have any reported Sovereign Wealth Funds, though the 2018 Mining Code discusses a Future Fund that is to be capitalized by a percentage of mining revenues.
7. State-Owned Enterprises
There are 20 DRC state-owned enterprises (SOEs) operating in the mining, transportation, energy, telecommunications, finance, and hospitality sectors. In the past, Congolese SOEs have stifled competition and have been unable to provide reliable electricity, transportation, and other important services over which they have monopolies. Some SOEs and other Congolese parastatal organizations are in poor financial and operational state due to indebtedness and the mismanagement of resources and employees. The list of SOEs can be found at: http://www.leganet.cd/Legislation/Droit percent20Public/EPub/d.09.12.24.04.09.htm .
There is limited reporting on the assets of SOEs and other parastatal enterprises, making valuation difficult. DRC law does not grant SOEs an advantage over private companies in bidding for government contracts or obtaining preferential access to land and raw materials. The government is often accused of favoring SOEs over private companies in contracting and bidding.
The DRC is not a party to the WTO’s procurement agreement (GPA), but nominally adheres to the OECD guidelines on Corporate Governance for SOEs. The DRC is a Participating Country in the Southern Africa SOE network, with the Ministry of Portfolio and the Steering Committee for SOE reforms designated as Regularly Participating Institutions.
The DRC has no official privatization program.
8. Responsible Business Conduct
The GDRC has taken actions of limited impact to support responsible business conduct (RBC), by encouraging companies to develop and adhere to a code of ethics and respect for the environment. The DRC Labor Code includes provisions to protect employees, and there are legal provisions that require businesses to protect the environment. However, the DRC does not possess a legal framework to protect the rights of consumers, and there are no existing domestic laws to protect individuals from adverse business impact.
The Global Compact Network DRC, a public-private consortium affiliated with the United Nations, encourages locally operating businesses to adopt sustainable and socially responsible policies. In 2016, the DRC issued the Guide on Corporate Social Responsibility (CSR Guide) for the mining sector in Haut Katanga.
The DRC has adopted the OECD due diligence guidelines on responsible mineral supply chains as defined by the United Nations Group of Experts, as well as various resolutions of the UN Security Council related to business and human rights in the Congolese mining sector. The DRC participates in the Extractive Industries Transparency Initiative (EITI) and publishes reports on its revenue from natural resources, although in recent years the reports have been late or incomplete.
The 2018 Mining Code provides domestic transparency measures requiring the disclosure of payments made to government entities. Promines, a technical parastatal body financed by the GDRC and the World Bank, works to improve transparency in the artisanal mining sector. Amnesty International, Pact Inc., Global Witness, and the Carter Center have published reports on RBC in the DRC mining sector. The Dodd-Frank Act mandated companies publicly listed in the United States to declare their supply chains for DRC-sourced “3Ts” (tin, tungsten, and tantalum) and gold. Although the Securities and Exchange Commission is no longer actively enforcing the act, many U.S. multinationals appear to be complying voluntarily to avoid possible reputational damage.
The Tshisekedi government has used public prosecutions of high-level officials and the creation of an anti-corruption unit to improve the DRC’s reputation on corruption. DRC’s 2018 Corruption Perception Index score—161 out of 180—underlines the endemic and deep roots of corruption in the country. The DRC constitution includes laws intended to fight corruption and bribery by all citizens, including public officials. Anti-corruption laws extend to family members and political parties. Private companies have applied their own controls to limit corruption, and have in the past been more effective at controlling it.
In March 2020, President Tshisekedi created the National Agency to Fight Corruption. In June 2020, the National Assembly began discussing the law on the creation, organization, and function of the Agency. The National Assembly forwarded the proposal to the Political, Administrative, and Judiciary Commission for analysis prior to a vote. Currently corruption investigations are ongoing for three Managing Directors of SOEs. In June, the court convicted Tshisekedi’s former Chief of Staff of embezzlement and public corruption, and sentenced him to 20 years in prison.
The DRC is a signatory to the UN Anticorruption Convention, but not to the OECD Convention on Combating Bribery. The DRC ratified a protocol agreement with the Southern African Development Community (SADC) on Fighting Corruption. NGOs such as the group “The Congo is Not for Sale,” have an important role in revealing corrupt practices, and the law protects NGOs in a whistleblower role.
U.S. firms see corruption as one of the main hurdles to investment in the DRC, particularly in the awarding of concessions, government procurement, and taxation treatment.
The Agency in charge of fighting corruption in the DRC is:
Agence de Prévention et de Lutte contre la Corruption (APLC)
Ghislain Kikangala, Coordinator
Tel: +243 893 302 819
10. Political and Security Environment
In January 2019, Felix Tshisekedi became President in the DRC’s first peaceful transition of power, ushering a period of relative political stability. The December 2018 elections were the result of international, including U.S pressure, as well as a long period of mediation involving the Catholic Church, the government, and the opposition. Maintaining public support for the Tshisekedi government will ultimately require the administration to deliver on the campaign slogan of “the people first.”
The security situation continues to be a concern. Thousands of members of armed groups have been disarming and turning themselves in to the United Nations’ DRC peacekeeping operation (MONUSCO) and the GDRC since President Tshisekedi’s election, according to international observers. Most of the defections have taken place in eastern and central DRC. International statistics indicate that over 140 armed groups continue to operate in 17 of the DRC’s 26 provinces, primarily in the east of the country. The ISIS-affiliated Allied Democratic Forces (ADF) rebel group in eastern DRC is one of the country’s most notorious and intractable armed groups, and its members have shown no interest in demobilizing. Armed groups previously interfered with the effort to eradicate the Ebola outbreak in eastern DRC, but interference decreased and the eastern outbreak was declared over on June 25. President Tshisekedi appears cognizant of the important role security plays in attracting foreign investment, and has encouraged the Congolese army to work with MONUSCO to eliminate armed groups.
US citizens and interests are not being specifically targeted by armed groups, but can easily fall victim to violence or kidnapping by being in the wrong place at the wrong time. The Armed Conflict Location and Event Dataset tracks political violence in developing countries, including the DRC, http://www.acleddata.com/. Kivu Security Tracker (www.kivusecurity.org) is another database for information on attacks in eastern DRC. In addition, the Department of State continues to advise travelers to review the Embassy’s travel advisory: https://travel.state.gov/content/travel/en/international-travel/International-Travel-Country-Information-Pages/DemocraticRepublicoftheCongoDRC.html
11. Labor Policies and Practices
The DRC labor market has a large and low-skilled labor force with high youth unemployment. Expatriates frequently fill jobs requiring technical training in the key mining sector. About 85 percent of the non-agricultural workforce is in the informal sector.
DRC labor law stipulates that for businesses with over 100 employees, 10 percent of all employees should be local. If the managing director is a foreigner, his or her deputy or secretary general is expected to be a Congolese citizen. The government can waive these provisions depending on the sector of activity and expertise available. There are no onerous conditionality, visa, residence, or work permit requirements inhibiting the mobility of foreign investors and their employees.
While the agricultural sector is expanding, it continues to face poor infrastructure and a lack of access to technology. About 60 percent of the workforce is in agriculture.
The DRC faces a deficit in skilled labor across all sectors. There are few formal vocational training programs, though Article 8 of the labor law stipulates that all employers should provide training to their employees. To address the high unemployment rate, the GDRC enacted a policy giving Congolese a preference in hiring over expatriates. Laws prevent firms from firing workers under most conditions without compensation. These restrictions have deterred hiring and encouraged the use of temporary contracts in lieu of permanent hiring. There is no government safety net to compensate laid off workers.
Congolese law bans collective bargaining in certain sectors, including by civil servants and public employees, and the law does not provide adequate protection against anti-union discrimination. While the right to strike is recognized, there are provisions which require unions to obtain permission and adhere to lengthy compulsory arbitration and appeal procedures before starting a strike. Unions often strike for higher wages or the payment of back wages.
The DRC government ratified the International Labor Organization’s (ILO) eight core conventions, but some Congolese laws continue to be inconsistent with the ILO Convention on Forced Labor.
DRC law prohibits discrimination in employment and occupation based on race, gender, language, or social status. The law does not specifically protect against discrimination based on religion, age, political opinion, national origin, disability, pregnancy, sexual orientation, gender identity, or HIV-positive status. Additionally, no law specifically prohibits discrimination in the employment of career public service members. According to some businesses, the government does not effectively enforce relevant employment laws.
Labor law defines different standard workweeks, ranging from 45 to 72 hours, for various jobs, and prescribes rest periods and premium pay for overtime. Employers in both the formal and informal sectors often do not respect these provisions. The law does not prohibit compulsory overtime.
The labor code specifies health and safety standards, but the government does not effectively enforce labor standards in the informal sector, and enforcement is uneven to non-existent in the formal sector. The Ministry of Labor employs 200 labor inspectors but has not provided funds to conduct labor inspections.
13. Foreign Direct Investment and Foreign Portfolio Investment Statistics
|Host Country Statistical source||USG or international statistical source||USG or International Source of Data:
BEA; IMF; Eurostat; UNCTAD, Other
|Host Country Gross Domestic Product (GDP) ($B USD)||N/A||N/A||2018||$47||www.worldbank.org/en/country|
|Foreign Direct Investment||Host Country Statistical source*||USG or international statistical source||USG or international Source of data:
BEA; IMF; Eurostat; UNCTAD, Other
|U.S. FDI in partner country ($M USD, stock positions)||N/A||N/A||2018||$80||BEA data available at
|Host country’s FDI in the United States ($M USD, stock positions)||N/A||N/A||N/A||N/A||BEA data available at
|Total inbound stock of FDI as % of host GDP||2018||51.3%||2019||51.4%||UNCTAD data available at
|No detailed information is available on the IMF’s Coordinated Portfolio Investment Survey (CPIS) website and no information is available on outward direct investment from Democratic Republic of Congo.|
|No detailed information is available on the IMF’s Coordinated Portfolio Investment Survey (CPIS) website and no information is available on outward direct investment from Democratic Republic of Congo.|
14. Contact for More Information
Points of contact for inquiries from the public:
Deputy Economic Chief
Econ Section’s email address: KinshasaEcon@State.gov