Congo, Democratic Republic of the
7. State-Owned Enterprises
Some report the DRC state-owned enterprises (SOEs) can generally act as a burden on the nation’s economy. Investors have noted that SOEs stifle competition and are unable to provide reliable electricity, transportation, and other important services over which they have monopolies. Some SOEs and other Congolese parastatal organizations are in a poor financial and operational state due primarily to indebtedness, mismanagement of resources and employees, and poor service delivery.
Reporting on the assets of SOEs and other parastatal enterprises is limited, making valuation difficult. According to State law N° 08/007 of July 7, 2008 (related to business transformation), any firm of which the state owns 50 percent plus one share is considered to be an SOE. DRC law does not grant SOEs advantage over private companies in bidding for government contracts, however, in practice, SOEs are accused of being favored over private companies, sometimes using questionable practices and arguably unsupportable legal actions. The list of SOEs can be found at: .
SOE accounts are not audited. While the Supreme Audit Institution (Cour des Comptes) is authorized to audit SOEs and to publish findings, a lack of resources devoted to the organization has resulted in no or partial SOE audits. In addition, the Conseil Superieur du Portefeuille – an oversight body under the Ministry of Portfolio – is mandated with assessing SOE financial performance in terms of growth, profitability, and solvency. Their reports are for internal use and are not publicly available.
There is no official provision requiring preferential access to land and raw materials for SOEs; in a situation where both an SOE and private enterprise show interest in the same land or material, preferential access shall be granted to the first applicant.
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.
According to some, in addition to being inadequately managed, some SOEs also serve as conduits for the illicit diversion of funds. U.S. NGO the Carter Center issued the November 2017 study, “A State Affair: Privatizing Congo’s Copper Sector,” stating that roughly USD 750 million earned by the DRC’s state-owned mining company Gecamines between 2011 and 2014 cannot be reliably accounted for. More recently, Gecamines has aggressively audited some of its joint venture partners, threatening to dissolve partnerships, and ultimately expropriate private mine holdings, unless partners transferred more revenue to GDRC and Gecamines accounts.
The DRC has no official privatization program, though, with support of the World Bank, the GDRC established a Steering Committee in 2010 for the Reform of Public Enterprises (COPIREP), which attempts to address the performance of SOEs. To date, only a handful of SOEs have undergone reform, with mixed results.