2022 Investment Climate Statements: Republic of the Congo
The International Monetary Fund (IMF), the Bank of Central African States (BEAC), and the Government of Republic of the Congo (ROC) project an increase of 2.3 percent of the gross domestic product (GDP) in 2022, a recovery from a 0.8 percent GDP decline in 2021.
Before the COVID-19 outbreak, the ROC struggled with the effects of the 2014 drop in oil prices. Poor governance and a lack of economic diversification pushed the ROC to near insolvency, reduced its creditworthiness, and forced the central bank to expend significant foreign currency reserves.
Oil represents the largest sector of the economy and contributes upwards of 60 percent of the government’s annual declared revenue. The primary non-oil sectors are timber, telecommunications, banking, construction, and agriculture. ROC has resources for economic diversification, with vast swaths of arable land, some of the largest iron ore and potash deposits in the world, a heavily forested land mass, and a deep-water International Ship and Port Facility Security Code-certified port. ROC is eligible for the U.S. African Growth and Opportunity Act (AGOA) trade preferences since October 2000, providing incentive for export-related investment. ROC also participates in the Central African Economic and Monetary Community (CEMAC).
The largest current infrastructure project is major road repairs on the section of highway between Brazzaville and Owando; the initial project was completed in 2016. ROC’s nascent internet and inconsistent supplies of electricity and water present major hurdles to and opportunities for foreign direct investment. Significant sections of the country’s road system need maintenance or paving. The limited railroad network competes with truck and bus traffic for commercial cargo. However, large infrastructure projects are in progress in several major cities, and the government reports spending significant amounts on infrastructure improvements.
Investors report that the commercial environment in ROC has not improved substantially in recent years. ROC ranked 162 out of 180 countries in Transparency International’s 2021 Corruption Perceptions Index. American businesses operating in ROC and those considering establishing a presence regularly report obstacles linked to corruption, lack of transparency, subjective application of legal codes and host government inefficiency in matters such as registering businesses, obtaining land titles, paying taxes, and negotiating natural resource contracts.
1. Openness To, and Restrictions Upon, Foreign Investment
Policies Towards Foreign Direct Investment (FDI)
The ROC government welcomes FDI in most sectors, particularly in the oil sector, which accounts for 90 percent of FDI inflows. The government stated an urgent need to attract investment outside of the petroleum sector in March 2021. Since March 2021, the country has attracted additional investment interest from the United Arab Emirates, Italy, Turkey, Russia, the People’s Republic of China, France, Egypt, Rwanda, and the United States. As a stipulation of the International Monetary Fund’s Extended Credit Facility awarded in January 2022, ROC pledged to undertake legislative, regulatory, and institutional reforms to improve the investment climate.
No known laws or practices discriminate against foreign investors, including U.S. investors, by prohibiting, limiting, or conditioning foreign investment in any sector of the economy. The United States and ROC signed an investment agreement in 1994.
ROC’s Agency for the Promotion of Investments (API), established in 2013, promotes economic diversification by seeking to expand the pool of external investors into government-directed sectors. API provides French-language advisory services to potential investors and maintains a database of government projects seeking private investor partners. To benefit from API services, the interested company must match with pre-determined preferred sectors.
The government has made no significant efforts at a systemic level to retain foreign investments or to maintain dialogue with investors, however, officials maintain strong personal ties with investors to support investment, but rarely share these connections throughout the government, resulting in competition amidst ministers for investment contacts and dollars. The High Committee for Public-Private Dialogue, established in 2012, convened one meeting in 2021.
Limits on Foreign Control and Right to Private Ownership and Establishment
Foreign and domestic private entities have the right to establish and own business enterprises and engage in all forms of remunerative activity.
ROC has no known limits on foreign ownership or control.
Foreign business entities investing in the petroleum sector must pursue a joint venture with the Congolese National Petroleum Company (SNPC). An ROC executive order from November 15, 2019, requires foreign companies in the hydrocarbons sector to employ Congolese in 80 percent of management positions and 90 percent of all employee positions.
ROC has no formal investment screening mechanism for inbound foreign investment.
Other Investment Policy Reviews
The government has not undergone any third-party investment policy reviews in the past five years.
No civil society organization provided useful reviews of investment policy-related concerns in the past five years.
The ROC Agency for Business Creation, (French acronym ACPCE), serves as a “one-stop shop” for establishing a business. ACPCE has offices in Brazzaville, Pointe-Noire, N’kayi, Ouesso, and Dolisie. To establish a business in ROC, investors must provide ACPCE with two copies of the company by-laws, two copies of capitalization documents (e.g. a bank letter or an affidavit), a copy of the company’s investment strategy, ownership documents or lease agreements for the company’s offices in ROC, and CPA-approved financial statements within three years after operations start.
The ACPCE website https://dgpme.cg/acpce.php serves as an information-only website. Business registration cannot be completed through the website. The business registration process takes from 4 to 12 weeks normally for all companies and must be initiated in person with ACPCE.
The ROC government does not publicly promote or incentivize outward investment.
The ROC government does not restrict domestic investors from investing abroad.
2. Bilateral Investment and Taxation Treaties
On February 12, 1990, ROC signed a Bilateral Investment Treaty (BIT) with the United States. The treaty entered into force on August 13, 1994. ROC also maintains BITs in force with France, China, Germany, Italy, Republic of Korea, Mauritius, Switzerland, and the United Kingdom. ROC has fiscal agreements with the other member states of the Central African Economic and Monetary Community. Several African nations have signed commercial and bilateral agreements with ROC to safeguard investments, including South Africa in 2005 and Namibia in 2007.
As a lower middle-income country, ROC may not join trade agreements open to Least Developed Countries.
ROC is a member of the OECD Inclusive Framework on Base Erosion and Profit Shifting. ROC does not have stand-alone bilateral taxation treaties with any country. Some of ROC’s bilateral investment agreements, such as with the United States and France, include taxation provisions to avoid double taxation. Tax authorities generally do not enforce these provisions. Companies have reported issues recovering value added taxes from the ROC government.
3. Legal Regime
Transparency of the Regulatory System
Lack of transparency poses one of the greatest hurdles to FDI, as investors must navigate an opaque regulatory bureaucracy. Companies routinely find themselves embroiled in tax, customs, and labor disputes arbitrated by court officials who make decisions that do not conform with Congolese law and ROC Ministry of Justice regulations.
ROC has no known informal regulatory processes managed by nongovernmental organizations or private sector associations.
The government develops new regulations internally and rarely requests formal input from industry representatives. Various ministries have regulatory authority over the individual industries in their area of responsibility, with overall authority coordinated by the Ministry of Economy. The government does not usually offer a formal, public-comment period.
ROC’s accounting, legal, and regulatory frameworks are transparent in their structure, though the application often lacks transparency and fairness. ROC uses Francophone Africa’s Organization for Business and Customs Harmonization (French acronym OHADA) system of accounting, legal, and regulatory procedures.
The government does legally require extractive industries to conduct environmental impact surveys ahead of activities. Mining and timber sector companies are required to do ongoing environmental and social offset activities. Oversight on these required activities is self-reported from businesses. The GROC lacks the capacity to enforce and assure disclosures.
The government does not make draft bills or regulations available for public comment. The government publishes new laws and regulations in ROC’s Official Journal.
The Official Journal is available for download at the website of the Secretary General of the Government who maintains the Official Journal online at http://www.sgg.cg.
Most government ministries have an inspector general that conduct oversight to ensure that government agencies follow administrative processes. The Office of the President has an inspector general who oversees the entire government.
In 2021, the government passed the new Anti-Corruption Law, aiming to target corruption among public officials across all sectors of government. The new legislation is a complement to the 2017 Public Transparency and Financial Management law that focused on transparency of public funds and the officials managing them. The new law increases fines and potential jail time for corruption and is meant to mitigate loss of funds to corruption. No new reforms were made in the reporting period.
The inspector general process is not legally reviewable, digitalized, nor accountable to the public.
The government publishes some public finances and debt obligations, including explicit and contingent liabilities. The Ministry of Finance publishes the arrangements on its website, https://www.finances.gouv.cg/.
International Regulatory Considerations
ROC participates as a member in the Economic Community of Central African States (French acronym CEEAC), a regional economic cooperation community, and in the Economic and Monetary Community of Central Africa (French acronym CEMAC), a monetary union of six Central African states. CEMAC forms the base of local regulatory systems, including the stock exchange, the central bank, and the language for rules and regulations on investment and the economy. CEMAC sets the regional debt threshold for member countries and limits external cash transfers for companies based in member countries, and institutes banking regulations shared by member countries.
ROC’s regulatory system for business disputes and regulations governing company registration structure and incorporation incorporates Francophone African regulatory norms promulgated by Organization for the Harmonization of African Business Rights (OHADA).
ROC participates as a member country of the World Trade Organization (WTO). The government did not provide information as to whether it notifies the WTO Committee of all draft regulations relating to Technical Barriers to Trade. ROC signed the WTO Trade Facilitation Agreement but has not begun implementing the agreement.
Legal System and Judicial Independence
The French civil law legal system serves as the basis of the Congolese legal system. Contracts are enforced by referring to the commercial court system.
OHADA provides the basis for ROC’s national commercial law, supplemented by ROC-specific provisions, such as requiring companies to register with the commercial courts. A commercial court exists in ROC but has not convened since 2016.
The judicial system remains independent in principle. In practice, however, the executive branch intervenes in the judicial system on an ad hoc basis. The judicial process is procedurally competent, but its fairness and the reliability of judgments and applications of the legal code are questionable.
Appellate courts exist and receive appeals of enforcement actions. Public Law 6-2003, which established the country’s Investment Charter, states that Congolese law will resolve investment disputes. Judgments of foreign courts are difficult to enforce in ROC. Though the government does not usually deny foreign court judgments outright, it may propose process or procedural delays that prolong matters indefinitely without resolution.
Laws and Regulations on Foreign Direct Investment
ROC’s commercial court has authority over any legal disputes involving foreign investors.
Investors may also file legal complaints in the OHADA court – based in Abidjan, Cote d’Ivoire – which has jurisdiction throughout Francophone Africa. ROC’s Hydrocarbons Law and Mining Code of 2016 contain industry-specific regulations for foreign investments.
The government published no substantive changes to laws, regulations, or judicial decisions related to foreign investment during the reporting period.
The ROC Agency for Business Creation ACPCE is the first stop for establishing a business. Its website has limited information about laws, rules, and reporting requirements: https://dgpme.cg/acpce.php. The newly formed American Chamber of Commerce also serves as a resource for American investors.
Competition and Antitrust Laws
No agencies review transactions for competition-related concerns, either domestic or international in nature. Ministries in general monitor individual industries and review industry-related transactions.
Expropriation and Compensation
The ROC government may legally expropriate property if it finds a public need for a given public facility or infrastructure (e.g. roads, hospitals, etc.).
No recent history of expropriation regarding private companies exists. Historically, however, the ROC government has expropriated private property from Congolese citizens to build roads and stadiums. Law entitles the claimants to a fair market value compensation, but the government distributed such compensation inconsistently.
Beginning in 2012, the ROC government expropriated land of Congolese private property owners in the Kintele suburb of Brazzaville to build a sports complex for the 2015 African Games. The government offered minimal compensation to property owners. At the time, citizens publicly complained of a lack of legal recourse against the government.
The government has not taken any measures alleged to be indirect expropriations such as confiscatory tax regimes or regulatory actions that deprive investors of substantial economic benefits from their investments during the reporting period. However, there is an abundance of corrupt employees within the tax authority who charge companies more than they are due, irrespective of the legal tax regime.
ICSID Convention and New York Convention
ROC is a party to the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID). The ROC government has yet to ratify the New York Convention of 1958 on the Recognition and Enforcement of Foreign Arbitral Awards.
There is no specific domestic legislation providing for enforcement of awards under the ICSID Convention.
Investor-State Dispute Settlement
ROC is a member of OHADA, which includes binding international arbitration of investment disputes.
ROC has a bilateral investment treaty with the United States that includes an investment chapter. There are no recent claims under the agreement by U.S. investors.
There have been two investment disputes involving entities with full or partial U.S. ownership in the past ten years. In one, a company successfully negotiated a settlement with ROC authorities after filing suit in a New York district court. In the second, a company successfully sued ROC in U.S. and French courts over non-payment for goods and services, however, the ROC government refused to recognize the judgements. Congolese courts subsequently issued their own judgements in favor of the ROC government. The ROC government no longer responds to attempts by the company or intermediaries to engage on this dispute.
Local courts have rarely recognized and enforced foreign arbitral awards issued against the government.
There is no known history of extrajudicial action against foreign investors.
International Commercial Arbitration and Foreign Courts
There is no known alternative dispute resolution (ADR) mechanism available in ROC. ROC inconsistently abides by international arbitration for any treaty, international convention, or organization of which it is a member. In practice, arbitrary judgments are difficult to enforce.
Commercial courts constitute the domestic arbitration body within the country. The commercial court legislation and structure is based on French commercial legislation and structure.
Local courts inconsistently recognize and enforce foreign arbitral awards. ROC law recognizes foreign judgments when the relevant laws appear sufficiently similar to Congolese law.
Congolese courts have yet to accept any foreign arbitral awards in recent memory. There are no known investment disputes involving state owned enterprises in recent years.
ROC has no specific law that governs bankruptcy. As a member of OHADA, ROC applies OHADA bankruptcy provisions in the event of corporate or individual insolvency. No laws criminalize bankruptcy. ROC does not have a credit bureau or other credit monitoring authority serving the country’s market.
4. Industrial Policies
When a potential investor believes its investment will bring substantial investment and job creation to the Congolese economy, it may apply for preferential tax and customs treatment through the Ministry of Finance’s National Committee on Investments. The Minister of Finance chairs this committee, which includes the Minister of Economy and Industrial Development, the Minister of Planning, and the Minister of Budget. The committee reviews applications annually.
Presidential decree No. 2004-30 of February 18, 2004, defines the requirements for foreign and national companies to benefit from incentives offered by the Congolese Investment Charter. The decree promulgates four types of incentives:
(1)Incentives to export;
(2)Incentives to reinvest the company’s profit in ROC; (3) Incentives for businesses in remote areas or areas that are difficult to access; and (4)Incentives for social and cultural investment.
Examples of incentives include reduced or exempted taxes below the corporate tax rate of 30 percent; reduced customs duties over a period of five to 10 years; a 50 percent reduction in business registration fees; and an accelerated depreciation mechanism. For companies owned at least 25 percent by domestic entities, other incentives include a reduced dividend tax rate of 10 percent, capital gains tax reductions, deductions for business expenditures, reduced rents, and deductible remunerations. Businesses may negotiate other incentives during the incorporation process.
The government does not have a practice of issuing guarantees or jointly financing foreign direct investment projects.
The government has yet to offer any incentives, such as feed-in tariffs, discounts on electricity rates, or tax incentives for clean energy investments.
Foreign Trade Zones/Free Ports/Trade Facilitation
The ROC government has named four special economic zones (SEZs): in the main economic hub of Pointe-Noire, the capital Brazzaville, and the cities of Ouesso and Oyo. ROC signed memoranda of understanding with the Governments of Mauritius, Singapore, and the People’s Republic of China to advise on the development of the SEZs. The government expressed a desire to attract U.S. investment to the SEZs. Little activity has yet to develop in the SEZs, and no known timeline exists to render the SEZs operational.
Performance and Data Localization Requirements
Major foreign direct investment must demonstrate an economic windfall for the local community (e.g. increased local employment) for approval of an investment agreement from the National Committee on Investment to receive tax and investment benefits. ROC’s labor code requires the top manager of all companies to be a Congolese national. The government frequently waives this requirement for multinational companies.
No known performance requirements exist for foreign or local companies. No known restrictions apply to U.S. or other foreign firms’ participation in ROC government-financed or subsidized research and development programs.
No known procedures for performance requirements exist in the Republic of the Congo. When a potential investor believes its investment will bring substantial investment and job creation to the Congolese economy, it may apply for preferential tax and customs treatment by applying to the Ministry of Finance’s National Committee on Investments.
No requirements for foreign information technology providers exist to provide source code and/or access to encryption.
No known measures prevent companies from transmitting customer or other business data outside of the country.
No known rules require local data storage.
5. Protection of Property Rights
The government enforces property rights and interests, though companies and individuals cite inconsistent enforcement. Mortgages and liens exist. The recording system is generally reliable.
No known specific regulations regarding land lease or acquisition by foreign investors exist.
The government has no definitive registry of untitled land. There are ongoing efforts by the government to push property owners to register land titles.
Property ownership can transfer to other owners if the property remains unoccupied for 10 consecutive years while having been simultaneously occupied by another user (squatter).
Intellectual Property Rights
As a member of CEMAC, the ROC participates in the African Intellectual Property Organization (OAPI). OAPI manages a single copyright system for all member states. Additionally, as a member of the WTO, ROC is obligated to ensure that intellectual property (IP) legislation conforms to WTO norms and standards. The Ministry of Commerce leads issues related to counterfeit products. Local authorities have historically seized and destroyed contraband items, such as counterfeit medical supplies and black-market food products. Determining the extent of IP infringement is challenging because the ROC maintains no formal system of tracking and reporting seizures of counterfeit goods. Additionally, the ROC government reportedly uses unlicensed software on its computers.
The government has not enacted any new IP-related laws or regulations in the past year.
Local authorities have historically seized and destroyed contraband items but determining the extent of IP infringement is challenging because the ROC maintains no formal system of tracking and reporting seizures of counterfeit goods.
The ROC government maintains a neutral attitude toward foreign portfolio investment and does not widely practice foreign portfolio investment.
ROC does not have a national stock exchange. ROC-based companies may seek regional listing on the Douala Stock Exchange, which merged with the CEMAC Zone Stock Exchange. BEAC puts in place a regulatory system to encourage and facilitate portfolio investment.
The government and Central Bank respect IMF Article VIII in principle, however, within the last year the BEAC imposed restrictions on international payments and transfers. Mining and oil companies expressed concerns about the new restrictions.
The BEAC monitors credits and market terms. Foreign investors can obtain credit on the local market so long as they have a locally registered company. ROC, however, offers only a limited range of credit instruments.
Money and Banking System
Banking penetration is estimated at 10- to 12-percent. High intermediation costs and high collateral requirements limit the pool of customers. Microfinance banks and mobile banking remain the fastest growth areas in the banking sector.
The current economic crisis and the government’s consecutive years of fiscal deficits strained the banking sector over the past five years. Overall loan default is around 20 percent in the reporting period.
Non-performing loans amount to approximately 20 percent in 2022.
The Republic of the Congo’s largest banks is BGFI Congo with estimated total assets of about $200 million in 2021. Fiscal transparency issues limit any estimate of the total assets controlled by ROC’s largest banks. The assets of the largest banks decreased in recent years as a result of the economic crisis.
ROC participates in the CEMAC zone and the BEAC system. BEAC’s regulatory body, the Banking Commission of Central Africa (French acronym COBAC), supervises the Congolese banking sector.
Foreign banks and branches may operate in ROC and constitute the majority of banking operations in ROC. BEAC banking regulations govern foreign and domestic banks in ROC. No banks have left ROC in the past fifteen years.
No known restrictions exist on a foreigner’s ability to establish a bank account.
Foreign Exchange and Remittances
In January 2022, the BEAC implemented new restrictions on international payments after a two-years grace period and fund transfers, negatively affecting foreign exchange. CEMAC regulations require banks to record and report the identity of customers engaging in transactions valued over $10,000. The BEAC recently began monitoring fund transfers larger than $100,000 more closely.
New BEAC restrictions create difficulties obtaining foreign currencies from commercial banks.
No U.S.-based banks operate in ROC but transfers directly to and from the United States are possible.
ROC and other CEMAC member states use the Central African CFA Franc (FCFA, sometimes abbreviated XAF) as a common currency. The CFA is pegged to the Euro as an intervention monetary unit at a fixed exchange rate of 1 Euro: 655.957 CFA Franc.
In 2019, the BEAC imposed new restrictions on international payments and transfers that negatively affected remittances. A two-years grace period was issued but was not consistently follow by all CEMAC member states.
In June 2019, the BEAC issued several procedures to implement currency exchange controls. Since the implementation of these regulations, the average waiting period for any fund transfer was 10 days in 2021.
Sovereign Wealth Funds
GROC maintains no formal Sovereign Wealth Fund (SWF). An ROC law legalized the framework to establish an SWF in 2016 at the BEAC, intending to open ROC to mostly risk-free foreign assets. The SWF has yet to be established.
7. State-Owned Enterprises
State-owned enterprises (SOEs) dominated the Congolese economy in the 1970s and 1980s. The number of SOEs remains comparatively small following a wave of privatization in the 1990s. The national oil company (SNPC), electricity company (E2C), and water supply company (LCDE) constitute the largest remaining SOEs. SOEs report to their respective ministries.
The government publishes no official list of SOEs.
Constraints on SOEs operating in the non-oil sector appear to be monitored sufficiently and are subject to civil society and media scrutiny. The operations of SNPC, however, continue to be opaque. SOEs must publish annual reports subject to examination by the government’s supreme audit institution. In practice, these examinations do not always occur. Private companies may compete with public companies and have in some cases won contracts sought by SOEs. Government budget constraints limit SOE’s operations.
The Republic of the Congo has not adhered to the OECD Guidelines on Corporate Governance for SOEs.
ROC has no known privatization programs.
8. Responsible Business Conduct
Corporate Social Responsibility (CSR) remains a well-known concept in ROC that local communities view favorably. Foreign oil companies constitute the primary CSR actors. Telecommunications and transportation companies and banks have increasingly supported CSR initiatives to improve their public image. The government utilizes CSR contributions to help finance hospitals, education, nutrition programs, and road construction.
The government has not taken any specific measures to encourage responsible business conduct (RBC). The government has not established a national contact point or ombudsman for RBC, nor has it established a national action plan to define and drive its approach to RBC. The government encourages RBC by partnering with or endorsing companies’ CSR initiatives. RBC policies do not factor significantly into government procurement decisions.
There are no known or alleged human or labor rights concerns relating to RBC that foreign businesses should be aware of. There are no known claims in the last five years by indigenous or other communities that a government entity improperly allocated land or natural resources.
No known high-profile, controversial instances of private sector entities negatively impacting human rights exist.
The GROC enforces domestic laws related to human rights, labor rights, consumer protection, environmental protections, and commerce inconsistently.
No known corporate governance, accounting, or executive compensation standards exist to protect shareholders.
No independent NGOs, investment funds, worker organizations/unions, or business associations specifically promote or monitor RBC practices. Civil society groups promote individual matters of interest on a case-by-case basis.
ROC does not adhere to the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Afflicted and High-Risk Areas. No domestic measures require supply chain due diligence for companies that source minerals that may originate from conflict-affected areas.
ROC participates in the Extractive Industries Transparency Initiative (EITI). The latest report was published in 2020. No domestic transparency measures require the disclosure of payments made to the government and/or of RBC policies or practices.
ROC has a small private security industry. However, the use of private security companies is becoming more widespread for private companies and well-off individuals. ROC is not signatory of The Montreux Document on Private Military and Security Companies, and/or a supporter of the International Code of Conduct or Private Security Service Providers, and/or a participant in the International Code of Conduct for Private Security Service Providers’ Association (ICoCA).
The GROC national development plan includes activities for the international framework following the REDD+ initiative (Reducing Emissions from Deforestation and Forest Degradation), and the United Nations required National Strategy and the Nationally Determined Contributions (NDCs) which details each country’s commitment to reduce greenhouse gas emissions and adapt to climate impacts.
The GROC has no policy specific to reach net-zero carbon emissions by 2050. ROC absorbs more carbon than it emits.
The ROC government has no strategy to reach net-zero carbon emissions.
The GROC has no regulatory incentives to achieve policy outcomes that preserve biodiversity, clean air, or other desirable ecological benefit.
Known public procurement policies include environmental and green growth considerations such as resource efficiency, pollution abatement, and climate resilience. However, implementation and enforcement capacity are weak.
ROC adopted a law against corruption by public officials, “Code de Transparence dans les Finances Publiques,” on March 9, 2017. It adopted another comprehensive law against corruption, “Prévention et Lutte contre la Corruption et les Infractions Assimilées” on January 24, 2022. The ROC government inconsistently enforces both of these laws.
The corruption laws apply to elected and appointed officials. They do not extend to family members of officials or to political parties.
No specific laws or regulations address conflict-of-interest in awarding contracts or government procurement.
ROC does not encourage or require private companies to establish internal codes of conduct that prohibit bribery of public officials.
Some private companies, particularly multinationals, use internal controls, ethics, and compliance programs to detect and prevent bribery of government officials.
ROC is a party to the UN Anticorruption Convention.
ROC does not provide protection to non-governmental organizations (NGOs) investigating corruption. NGOs report that government corruption results in self-censoring of reporting and investigations into corruption.
U.S. firms routinely cite corruption as an impediment to investment, particularly in the petroleum sector. Corruption can be found in nearly all sectors including government procurement, award of licenses or concessions, transfers, performance requirements, dispute settlement, regulatory systems, customs, and taxation.
Resources to Report Corruption
Contact at the government agency or agencies that are responsible for combating corruption:
Emmanuel Ollita Ondongo
Haute Autorité de Lutte contre la Corruption (HALC)
Centre Ville, Brazzaville, République du Congo
+242 06 944 6165 or +242 05 551 2229
Contact at a “watchdog” organization:
Rencontre pour la Paix et les Droits de l’Homme (RPDH, the local chapter of “Publish What You Pay” – Publiez Ce Que Vous Payez)
B.P. 939 Pointe-Noire, République du Congo
+242 05 019 8501 or +242 05 358 3577 http://www.rpdh-cg.org/
10. Political and Security Environment
The most recent period of civil strife and violence ended in December 2017, when anti-government forces in the Pool region, which surrounds the capital of Brazzaville, signed a ceasefire agreement with the government. Before this violence, the country was in civil conflict from 1997 to 1999.
There are no known examples of damage to commercial projects and/or installations in the past ten years. Civil disturbances have occasionally resulted in damage to high-profile, public places such as police stations.
While elections in 2021 were peaceful, political violence and civil unrest may occur. In the past, political demonstrations have led to armed clashed, deaths, and injuries.
11. Labor Policies and Practices
Migrant workers from multiple Asiatic, European, and African origins work in the extractive industries, predominantly in skilled positions and management roles. Foreign workers are also present in major construction companies, usually as engineers and management. Women make up the bulk of the informal market sector. Women are employed across all sectors, but rarely seen in public transportation roles or as mechanics. It is very difficult for people with handicaps to work in the formal sector, but there are no statistics that capture the extent of the barriers. Indigenous populations are underrepresented in the labor force due to a lack of access to education, their concentration in rural underdeveloped areas, and discrimination. There are no statistics indicating the percentage of skilled versus unskilled labor in ROC, but the weakness of the secondary education system, lack of post-secondary education options in the country, low availability of trade schools or trade apprenticeships, and limited access to equipment lends itself to a higher concentration of unskilled labor. Unemployment in ROC remains high, with youth and women disproportionately affected. ROC does not publish unemployment data, affecting international partners abilities to publish data. The last World Bank report on unemployment estimates unemployment was 22.8 percent in 2020.
The majority of the population operates in the informal sector of the economy and does not declare revenues and profits, pay taxes, or pay employee benefits to the state. According to a Ministry of Small and Medium Enterprise’s study in 2019, financed by the World Bank, 93.4 percent of businesses in ROC operate in the informal sector. Women are more represented in the informal sector, especially in local public markets. The same study asserts women entrepreneurs face additional structural challenges establishing and operating a business and accessing credit. The study does not include the percentage of women represented in the informal sector.
Skilled labor shortages exist in several technical areas, including medicine, engineering, math, science, and banking. The government has no specific training programs to address these shortages.
Several laws and government policies including the Hydrocarbon Law, the Local Content Law, and industry-specific bargaining agreements require preferential treatment in the hiring process to Congolese nationals.
Government regulations govern employment adjustments in response to changing market conditions and include a severance requirement. Employers must demonstrate that market conditions have changed and obtain government approval before adjusting employment. Congolese severance laws differentiate between layoffs and firing. An employer must generally document malfeasance to terminate an employee for cause. There is no unemployment insurance or other social safety net programs for workers laid off for economic reasons. Most workers laid off for economic reasons rely on their former employer’s unemployment compensation.
The government may waive some labor laws to attract or retain investment on a case-by-case basis. ROC has, for example, waived the requirement for certain multinationals to hire a Congolese general manager. No known labor law exceptions exist for Special Economic Zones versus the economy writ large.
Collective bargaining is widely used in the ROC, and more than half of companies used it in various industries. These industries include the extractive sectors, telecommunications, construction and public works, local international organization offices, and the finance sector.
The Labor Court system mediates and arbitrates labor disputes.
There were no major strikes that posed an investment risk occurred during the reporting period.
There are no serious questions of compliance in law or practice with international labor standards for working conditions that may pose a reputational risk to investors exist. The International Labor Organization has not identified any potential gaps in law or practice with international labor standards. The government did not enact any new labor laws or regulations during the last year.
12. U.S. International Development Finance Corporation (DFC), and Other Investment Insurance or Development Finance Programs
One U.S. company in ROC has a political risk insurance program with the DFC. ROC participates in the Multilateral Investment Guarantee Agency (MIGA).
DFC maintains an agreement with ROC that existed between ROC and the Overseas Private Investment Corporation’s (OPIC). To date, DFC has yet to negotiate an amendment of or replacement for the existing OPIC agreement.
13. Foreign Direct Investment Statistics
Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy
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) ($M USD)