2022 Investment Climate Statements: Democratic Republic of the Congo
The Democratic Republic of the Congo (DRC) is the largest country in Sub-Saharan 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 food, security, infrastructure, and health care to its estimated 100 million inhabitants, of which 75 percent live on less than two dollars a day.
The ascension 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. In January 2021, the DRC government (GDRC) became eligible for preferential trade preferences under the Africa Growth and Opportunity Act (AGOA), reflecting progress made on human rights, anti-corruption, and labor. Tshisekedi created a presidential unit to address business climate issues. In late 2020 Tshisekedi ejected former President Joseph Kabila’s party from the ruling coalition and in April 2021 he appointed a new cabinet.
Overall investment is on the rise, fueled by multilateral donor financing and private domestic and international finance. The natural resource sector has historically attracted the most foreign investment and continues to attract investors’ attention as global demand for the DRC’s minerals grows. 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. The highly competitive telecommunications industry has also experienced significant investment, as has the energy sector through green sources such as hydroelectric and solar power generation. Several breweries and bottlers, some large construction firms, and limited textiles production are active. Given the vast needs, there are commercial opportunities in aviation, road, rail, border security, water transport, and the ports. The agricultural and forestry sectors present opportunities for sustainable economic diversification in the DRC, and companies are expressing interest in developing carbon credit markets to fund investment.
Overall, businesses in the DRC face numerous challenges, including poor infrastructure, a predatory taxation system, and corruption. The COVID-19 pandemic slowed economic growth and worsened the country’s food security, and the Russia’s attacks on Ukraine have raised global prices on imported foods and gasoline. 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 Concerns over the use of child labor in the artisanal mining of copper and cobalt have served to discourage potential purchasers. USG assistance programs to build capacity for labor inspections and enforcement are helping to address these concerns.
The government’s announced priorities include greater efforts to address corruption, election reform, a review of mining contracts signed under the Kabila regime, and improvements to mining sector revenue collection. The economy experienced increased growth in 2021 based on renewed demand for its minerals.
1. Openness To, and Restrictions Upon, Foreign Investment
Policies Towards Foreign Direct Investment
The ascension of Felix Tshisekedi to the Presidency in January 2019 and his welcoming attitude toward foreign direct investment (FDI), particularly from the United States, have raised hopes that the GDRC can impose and monitor investor-friendly policies. FDI-friendly laws exist, but the judicial system is slow to protect investors’ rights and is susceptible to political pressure and corruption. Investors hope that Tshisekedi can create a more favorable environment by improving the rule of law and tackling corruption. The DRC’s rich endowment of natural resources, large population, and generally open trading system offer significant potential opportunities for U.S. investors. For more than a decade, the DRC has undertaken reforms related to investment in order to make its business environment competitive and attractive including reforms to the investment code, the mining code, the insurance code, the agricultural Act, the Act on the liberalization of electricity, and the telecommunications code. The GDRC has also promoted improvements in the tax, customs, parafiscal, non-tax and foreign exchange regimes, which are applicable to collaboration agreements and cooperation projects, as well as the decree on the strategic partnership on value chains, the Industrial Property Act, the Public-Private Partnership Act, the Competition Act, and the Special Economic Zones Act.
The main regulations governing FDI are found in the Investment Code Act (No. 004/2002 of February 21, 2002). Current regulations reserve the practice of small-scale commerce and retail commerce in DRC to nationals and prohibit majority ownership by foreigners of agricultural enterprises. The ordinance of “August 8, 1990” clearly states that “small business may only be carried out by Congolese”. Foreign investors must limit themselves to import trade and wholesale and semi-wholesale trade. Investors fear that the ban on foreign agricultural ownership will stifle any attempt to revive the agrarian sector.
The National Investment Promotion Agency (ANAPI) is the official investment agency, providing investment facilitation services for initial investments above $200,000. It is mandated to promote the positive image of the DRC and specific investment opportunities; advocate for the improvement of the business climate in the country; and provide administrative support to new foreign investors who decide to establish or expand their economic activities on the national territory. More information is available at https://www.investindrc.cd/.
The GDRC maintains an ongoing dialogue with investors to hear their concerns. There are several public and private sector forums that address the government on the investment climate in specific sectors. In 2019, the GDRC created the Business Climate Unit (CCA) to monitor and improve the business enabling environment in the DRC, and to interface with the business community. In June 2020, the CCA presented a roadmap for reforms. In December 2021, the CCA developed a digital tool for monitoring and evaluating reforms and missions within the public administration, to allow the highest authorities, including the President of the Republic and the Prime Minister, to follow in real time the progress of the implementation of reforms by the various ministers. The Public-Private mining group Financial and Technical Partners (PTF) represents countries with significant mining investments in the DRC. On March 1, 2022, the GDRC created, by decree, the Agency for the Steering, Coordination and Monitoring of Cooperation Agreements between the DRC and its Private Partners (APCSC). This agency will oversee the implementation of cooperation agreements that the DRC has concluded with private companies, particularly in the areas of basic infrastructure and natural resources. The APCSC serves as an interface between the various parties and entities interested in projects resulting from collaboration or cooperation agreements in basic infrastructure and natural resources, including the GDRC, private companies and/or groups of companies, as well as any joint venture or monitoring structure created for the purpose of exploring, exploiting, or marketing natural resources and/or carrying out infrastructure work. The Federation of Congolese Enterprises (FEC), a private sector organization that partners with the government and workers’ unions, maintains a dialogue on business interests with the government.
Limits on Foreign Control and Right to Private Ownership and Establishment
The GDRC provides the right for foreign and domestic private entities to establish and own business enterprises and engage in all forms of remunerative activity.
Foreign ownership or control is possible except in certain excepted sectors. The DRC law reserves small-scale commerce and retail trade to Congolese nationals and there is a foreign ownership limit of 49 percent for agricultural concerns, which limits agricultural investment. Many investors note that in practice the GDRC requires foreign investors to hire local agents and participate in joint ventures with the government or local partners. The new telecommunications law enacted in 2022 includes a 25 percent ownership requirement.
Some foreign investors in the mining sector note that the 2018 mining code raised royalty rates from two to ten percent, raising tax rates on “strategic” metals, and imposing a surcharge on the “super profits” of mining companies. The code also removed a stability clause that protected investors from any new taxes or duties for ten years. The Tshisekedi government has indicated that it is prepared to reopen discussions on the mining code.
The GDRC does not maintain an organization to screen inbound investment. The Presidency and the ministries serve this purpose de facto. In May 2021 President Tshisekedi announced his intention to review the content of and compliance with mining contracts signed under former President Kabila, a process that is still ongoing.
Other Investment Policy Reviews
In the past five years, has the GDRC not been subject to a third-party investment policy review (IPR) through a multilateral organization such as the Organization for Economic Co-operation and Development (OECD), World Trade Organization (WTO), United Nations Conference on Trade and Development (UNCTAD) or the UN Working Group on Business and Human Rights. Cities with high custom clearance traffic use Sydonia https://asycuda.org/wp-content/uploads/Etude-de-Cas-SYDONIA-Contr%C3%B4le-de-la-Valeur-RDC.pdf, which is an advanced software system for custom administrations in compliance with ASYCUDA WORLD. (ASYCUDA is a large technical assistance software program recommended by UNCTAD for custom clearance management.)
The international NGO The Sentry published a report in November 2021 on a multi-million-dollar embezzlement and bribery operation using money intended to support infrastructure development. The NGO Global Witness reported in 2019 that a DRC-based bank was involved in laundering money for Congolese officials.
The GDRC operates a “one-stop-shop” for Business Creation (GUCE) that brings together all the government entities involved in the registration of a company in the DRC with an electronic tracking system of the business creation file online. The goal is to permit the quick and simple registration of companies through one office in one location. In October 2020, President Tshisekedi instructed the government to restructure GUCE in order to ease its work with the various state organizations involved in its operation. More information is available at https://guichetunique.cd/.
In December 2021, the GDRC attempted to make the GUCE more efficient for companies by implementing a system that allows for online business registration. Using the GUCE’s online portal, companies fill out a “single form,” which integrates all of the services involved in the process of creating a company including the Notary’s Office, the Registry of the Commerce and Personal Property Credit Register, the Administration of Tax Authority (DGI), a Center for Ordination of the General Directorate of Administrative, State, Judicial and Participation Revenues (DGRAD), the Administration of the National Economy, the National Fund of Social Security (CNSS), the Administration of the Environment, the National Office of Employment (ONEM), the National Institute of Professional Preparation (INPP), the General Inspection of Work; and a representation of Municipal Entities. Businesses may also need to obtain an operating permit as required by some city councils. The registration process should now take three days, but in practice it can take much longer. Some businesses have reported that the GUCE has significantly shortened and simplified the overall business registration process.
The GDRC does not promote or incentivize outward investment.
There are currently no government restrictions preventing domestic investors from investing abroad, and there is currently no blacklist of countries with which domestic investors are prevented from doing business.
2. Bilateral Investment and Taxation Treaties
The United States and the DRC signed a Bilateral Investment Treaty (BIT) in 1984, which entered into force in 1989. The BIT guarantees reciprocal rights and privileges to investors from each country and provides that if a claim arises under the treaty, it may be submitted to dispute resolution through international arbitration. U.S. companies have occasionally reported difficulties with tax authorities due to arbitrary application of the tax code.
On January 1, 2021, the DRC again became eligible for benefits under the African Growth and Opportunity Act (AGOA), after a 10-year exclusion due to concerns over human rights violations. AGOA provides African countries with duty-free access to the U.S. market. Congo’s main exports of copper, and cobalt were already given tariff-free treatment under the United States’ Generalized System of Preferences.
The DRC also has bilateral investment treaties in force with France, Switzerland, and Germany. The DRC has signed treaties with United Arab Emirates, Turkey, People’s Republic of China (PRC), Portugal, Italy, Republic of Korea, BLEU (Belgium-Luxembourg Economic Union), South Africa, Jordan, Ukraine, Egypt, and Greece, but these have not yet entered into force. Kenya is currently negotiating a BIT. 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.
In March 2021, economic, commercial, and technical cooperation agreements between the DRC and Qatar were signed to guarantee the security and protection of massive investments. These agreements provide for the modernization and development of airport and port infrastructure as well as capacity building for Congolese sectoral experts. In June 2021, the DRC and Namibia were discussing the formalization of a trade agreement on the supply of horse mackerel fish. The DRC and Rwanda have signed three bilateral trade agreements. The first concerns traceability in gold mining. The second agreement concerns a convention for “the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes and income”, and the last one covers “the promotion and protection of investments.” In October 2021, the DRC and Angola signed a trade agreement, including taxation, customs, transport, and an agreement for oil exploitation in common interest in September 2021. The DRC and Zambia signed a bilateral trade agreement between the two countries as part of the improvement and development of their cross-border trade, including advancing the implementation of the MOU on the issue of importing maize and maize meal.
In February 2022, the DRC deposited its instrument of ratification and became the 42nd country to ratify the continent-wide African Continental Free Trade Agreement (AfCFTA). The DRC signed AfCFTA in March 2018 and the National Assembly approved the treaty in April 2021. The agreement aims to facilitate imports and exports among member countries- with reduced or zero tariffs, free market access and market information, and the elimination of trade barriers.
In April 2022 the DRC joined the East African Community. The Congolese Parliament must still ratify the EAC’s laws and regulations before the agreement take effect. The GDRC has made efforts to harmonize its system with these regional bodies.
There is no bilateral taxation treaty between the United States and the DRC. The DRC is not a member of the OECD Inclusive Framework on Base Erosion and Profit Shifting.
3. Legal Regime
Transparency of the Regulatory System
The 2018 Law on Pricing, Freedom, and Competition (the “Competition Act”) created a Competition Commission. DRC law mandates review if a company’s turnover is equal to or exceeds the amount determined by Decree of the Prime Minister upon proposal of the Minister of the Economy; if the party in question also holds a combined market share of 25% or more; or if the contemplated transaction creates / reinforces an already dominant position. DRC law requires notification prior to a corporate merger.
The DRC is a member of the regional competition bodies, the Common Market for Eastern and Southern Africa (COMESA),and the Organization for the Harmonization of Business Law in Africa (“OHADA”), which covers francophone African countries . OHADA does not have an operational merger control regime in place, while COMESA does have merger control. Merger activities in the DRC should should comply with COMESA standards.
There are no informal regulations run by private or nongovernmental organizations that discriminate against foreign investors. However, some U.S. investors perceive the regulations in the mining and agricultural sectors mandating a percentage of local ownership as discriminatory against foreign investment.
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. The Official Gazette of the DRC is a specialized service of the Presidency of the Republic, which publishes and disseminates legislative and regulatory texts, judicial decisions, acts of companies, associations and political parties, designs, industrial models, trademarks as well as any other act referred to in the law. More information is available at http://www.leganet.cd/.
There are no formal or informal GDRC provisions that systematically impede foreign investment. Companies often complain of facing administrative hurdles as laws and regulations are often poorly or unevenly applied.
DRC is member of Francophone Africa’s OHADA – the Organization for Business and Customs Harmonization, or Organisation pour l’Harmonisation en Afrique du Droit des Affaires – a system of accounting, legal, and regulatory procedures which covers the legal framework in the areas of contract, company, and bankruptcy law and sets up an accounting system better aligned to international standards. A Coordination Committee in the DRC monitors OHADA implementation.
The GDRC does not promote or require companies’ environmental, social, and governance (ESG) disclosure. However, some companies believe that compliance with international ESG standards can attract new financing and are taking steps to ensure that their companies are ESG compliant. These companies believe that compliance allows them to have a positive impact on the communities in which they operate and protect the environment.
Draft bills or regulations are rarely made available for public comment, or through a public comment process. Discussion is usually limited to the government entity proposing the bill and to Parliament before the bill’s enactment. Sometimes the government will hold a public hearing after public appeals.
The Official Gazette of the DRC is a specialized service of the Presidency of the Republic, which publishes and disseminates legislative and regulatory texts, judicial decisions, acts of companies, associations and political parties, designs, industrial models, trademarks as well as any other act referred to in the law. More information is available at http://www.leganet.cd/.
Oversight mechanisms are weak, and often the law does not require audits to ensure that internal controls are in place or that administrative procedures are followed. Companies often complain that they face administrative barriers, with the government often poorly or unevenly enforcing laws and regulations. However, there are regulatory authorities in different sectors that ensure compliance with laws, regulations, conventions, etc., in order to guarantee effective and fair competition for the benefit of consumers and to provide legal and regulatory certainty for private investors. Some of them can issue, suspend, or withdraw authorizations and establish corresponding specifications.
In August 2021, the GDRC established the National Agency for Export Promotion (ANAPEX), with the aim of identifying and attracting foreign investments to sectors with export potential.
Following the decree signed in March 2022 by the Prime Minister, a new public establishment called the Agency for the Steering, Coordination and Monitoring of Collaboration Agreements Between the DRC and Private Partners (APCSC) was created. It replaces the Office for Coordination and Monitoring of the Sino-Congolese Program (BCPSC) established by former President Kabila and limited to agreements with Chinese investors. The APCSC will focus particularly on the areas of basic infrastructure and natural resources.
Through the National Agency for the Promotion of Exports (ANAPEX), the DRC can take advantage of its commitments at the regional level and can also target the Asian, European, and American markets to increase exports and further diversify its international markets. APCSC will interface between the various parties and entities interested in collaborating on projects in basic infrastructure and natural resources.
The enforcement process is legally reviewable, sometimes digitalized, and otherwise made accountable to the public. Public and private institutions responsible for monitoring and regulating various sectors make regulatory enforcement mechanisms publicly available. Regulatory agencies regularly publish their data and make it available to the business community and development partners, allowing for scientific and data-driven reviews and assessments.
In 2021, the DRC made significant progress by producing and publicly issuing a revised budget when budget execution deviated significantly from budget projections. Information on debt obligations was publicly available, except for major State-Owned Enterprise debt information. However, the GDRC strives to promote transparency in public finances and debt obligations (including explicit and contingent liabilities) by publishing information on https://budget.gouv.cd/.
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 Organization for the Harmonization of Business Law in Africa (“OHADA”), the Economic Community of Central African States (ECCAS), and the Economic Community of the Great Lakes Countries (ECGLC). In April 2022, the DRC joined the East African Community. The Congolese Parliament must still ratify the EAC’s laws and regulations before the agreement take effect. The GDRC has made efforts to harmonize its system with these regional bodies.
According to the Congolese National Standardization Committee, the DRC has adopted 470 harmonized COMESA standards, which are based on the European system.
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 code country, and the main provisions of its private law date back to the Napoleonic Civil Code. The general characteristics of the Congolese legal system are similar to those of the Belgian system. Various local laws govern both personal status laws and property rights, including inheritance and land ownership systems in traditional communities throughout the country. The Congolese legal system consists of three branches: public law, private law, and economic law. Public law governs legal relationships involving the state or state authority; private law governs relationships between private persons; and economic law governs interactions in areas such as labor, trade, mining, and investment.
The DRC has written commercial and contractual laws. The DRC has thirteen commercial courts located in its 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 the judicial system. However, a lack of qualified personnel and reluctance by some DRC jurisdictions to fully recognize OHADA law and institutions have hindered the development of commercial courts. Legal documents in the DRC can be found at: http://www.leganet.cd/.
The current executive branch has generally not interfered with judicial proceedings. The current judicial process is not procedurally reliable, and its rulings are not always respected.
The national court system provides an appeals mechanism under the OHADA framework.
Laws and Regulations on Foreign Direct Investment
The 2002 Investment Code governs most foreign direct investment (FDI) and provides for investment protection. Law n°004/2002 on the Investment Code, through the provisions of articles 23-30, which provide the mechanisms of security and guarantees for investments as well as customs, tax, and parafiscal exemptions. The country’s constitution and laws state that the property (private and collective) of all persons in the DRC is sacred. The GDRC guarantees the right to individual or collective property acquired in accordance with the law or custom. It encourages and ensures the security of private, national, and foreign investments. No one may be deprived of his or her property except for reasons of public utility and in return for fair and prior compensation granted under the conditions established by law; the State guarantees the right to private initiative to both nationals and foreigners.
The Public Private Partnership (PPP) Act provides for the guarantee of execution of the partnership contract regardless of a change of government (art. 15). Taxation in this law a common application of the law, except for the reduction of the tax on profits and earnings, which is set at 15%. There are other laws that grant customs exemptions, such as the Agricultural Act, the Partnership Act in the Value Chain, etc. The law favors amicable settlement or arbitration in case of investment disputes. Specific sectoral laws govern agriculture, industry (protection of industrial property), infrastructure and civil engineering, transportation (operating license in air transport), mining research and exploitation, hydrocarbons, various electricity sub-sectors, information and communication technologies (ICT) (license to operate telecommunications services), insurance and reinsurance, healthcare, and arms production and related military activities. Notwithstanding the specific provisions governing each of these sectors, all investors are required to submit a copy of their investment file to the DRC investment agency ANAPI (www.investindrc.cd).
The Telecommunications Law went into effect in 2021, bringing the first revision of the law since 2002. The government’s decisions in 2021 to establish an agency to monitor foreign investment in infrastructure and natural resources and to create a presidential body to review all mining contracts have affected some of the largest investments in the DRC.
The GUCE provides a One-Stop Shop designed to simplify business creation. The GUCE has reduced the processing time from five months to three days and for corporations, the fee was lowered from $120 to $80. For sole proprietorships, the fee has been reduced from $40 to $30. There is also an Integral One-Stop Shop for foreign trade (GUICE), which is a neutral, transparent, and secure electronic platform, accessible 24 hours a day to the entire foreign trade community. It centralizes all regulatory, customs and logistical components related to the import, export, and transit of goods (https://segucerdc.com). GUICE is operated by SEGUCE RDC SA, a private operator under the framework of a public-private partnership.
Competition and Antitrust Laws
Competition Commission – COMCO is the regulatory and supervisory body for competition in DRC under the Organic Law no. 18/020 on Pricing Freedom and Competition and the COMESA Competition Regulation. It ensures that the rules of free competition are respected by economic operators. This commission works to allow all economic operators, according to their capacities, to exercise a fair competition, based on the quality of goods, products, and services, respecting the official price structure. Its priorities are acquisitions and mergers (investigating, evaluating, and monitoring acquisitions and mergers), business practices and exemptions (investigating anti-competitive practices), consumer welfare (acting against violators), and good practice awareness (good practices and anti-competitive consequences).
The U.S. District Court for the District of Columbia ordered the GDRC to pay a liability judgment of $619 million to the South African company Dig Oil due to breach of contract. The GDRC is considering settling the 2020 judgment but has yet to do so. In August 2021, the Minister of Justice informed the GDRC of six emblematic cases of international litigation. The main causes of the DRC’s multiple liabilities in these cases are the poor management of the disputes by the sectoral authorities, the late transmission of files to the Ministry of Justice, and the failure to respect the findings of arbitration procedures. President Tshisekedi has called for better monitoring of cases involving the DRC before the courts in order to reduce the risk of the state being found liable for hundreds of millions of dollars.
As a member of COMESA, the DRC follows the COMESA Competition Regulations and rules, and the COMESA competition body regulates competition.
Agency decisions may be appealed to the courts/judicial system.
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.
There have been no expropriations of property in the past three years.
Some claims have been taken to arbitration, though many arbitral judgments against the GDRC have are not resulted in a payment.
Businesses report that the GDRC levies heavy fines, which is a form of financial expropriation. A government agency imposes fines because a company has not paid a tax, although often the tax system is unclear, and several government agencies impose different taxes. Companies that appeal these fines in court often face a long wait.
ICSID Convention and New York Convention
The DRC is a party to 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).
There is no specific domestic legislation providing for the enforcement of awards under the ICSID or New York Convention.
Investor-State Dispute Settlement
The DRC is subject to international arbitration. The DRC is a member of the Organization for the Harmonization of Business Law in Africa (“OHADA”), which provides for binding international arbitration of investment disputes.
The DRC has had a Bilateral Investment Treaty (BIT) with an investment chapter with the United States since 1984. 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 panel ruled the GDRC liable for damages totaling $13 million, and the GDRC started paying back the awarded amount plus interest to the U.S. Company.
No investment disputes involving U.S. entities have occurred in the last ten years.
DRC law recognizes foreign arbitral awards in the countries adhering to ICSID and the New York Convention. It emphasizes the arbitration of disputes arising from commercial relations, in view of its rapidity, neutrality and efficiency. However, in its ratification instrument, the DRC took reservations that: preclude enforcement of arbitral decisions taken prior to DRC’s ratification; exclude cases related to sovereign real estate of the DRC; insist that arbitral awards can only be enforced in commercial disputes and not in other areas. Finally, the DRC will not apply New York Convention to non-parties to the convention.
Under the Kabila government, there have been charges of extrajudicial action against foreign investors, including levying fines and imprisonment. In one case an investor left the country after being jailed on charges of corruption without a trial. Post still occasionally hears of harassment against foreign investors.
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 of Article 5 of the New York Convention on the Recognition and Enforcement of Foreign Awards apply where the seat of the arbitration is located 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, in the same way as a judgment of a national court. 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 before the domestic courts of any other OHADA member state, subject to obtaining an exequatur (a legal act emanating from a sovereign authority and permitting the enforcement of a right within the jurisdiction of that authority) from the competent court of the state in which the award is to be made. Exequatur is granted unless the award clearly violates the public policy of that State. Decisions granting or refusing to grant an exequatur may be appealed to the CCJA.
In domestic cases involving SOEs, courts often rule in favor of the SOEs. Generally, companies that are unable to obtain a favorable judgment in national courts turn to international courts for redress. This often drags out the legal process for years. One attorney estimated that about five percent of cases have some transparency.
The OHADA Uniform Act on Insolvency Proceedings provides a comprehensive framework not only for businesses in financial difficulty seeking to avoid the pressing demands of creditors, but also for creditors to file their claims. The GDRC court system has agreed to apply the OHADA Insolvency Act. Bankruptcy is not criminalized.
4. Industrial Policies
The 2002 Investment Code provides for attractive customs and tax exemptions for investors who submit their investment plan to ANAPI. Once the project is approved by ANAPI within a period not exceeding 30 days, the investor benefits from the following customs, fiscal and parafiscal advantages: (1) exemption from import duties and taxes on machinery, materials, and equipment (excluding the 2% administrative tax and VAT (to be paid upstream by the promoter, but to be refunded by the tax authorities); (2) exemption from income tax; (3) exemption from property tax; and (4) exemption from proportional duties when setting up a limited liability company or increasing its share capital.
The duration of the advantages granted is from three to five years depending on the economic region where the investment is located: three years for economic region A (Kinshasa, the Capital); four years for economic region B (Bas-Congo, cities of Lubumbashi, Likasi, Kolwezi); and five years for economic region C (everywhere else).
The conditions for accessing the benefits of the Investment Code are simple; establishment as an economic entity under Congolese law; the overall cost of the planned investment (all expenses included) must be at least $200,000 (or at least $10,000 for SMEs/SMIs); commitment to respect environmental regulations; commitment to respect labor regulations; and a guarantee the investment has a value-added rate of at least 35%. There are no additional incentives for businesses owned by underrepresented investors such as women.
The GDRC does not issue guarantees or jointly finance foreign direct investment projects.
Aside from the incentives offered in the Investment Code, the GDRC does not offer additional incentives for clean energy investments (including renewable energy, energy storage, energy efficiency, clean hydrogen, carbon sequestration, low-carbon transport, and fuels, and other decarbonization technologies). A group of off-grid electricity producers is pushing the government to provide an exemption from import taxes for off-grid solar products brought into the DRC.
Foreign Trade Zones/Free Ports/Trade Facilitation
The DRC does not have any areas designated as Free Trade Zones or Duty-Free Zones. The DRC is a signatory to the SADC but is not a SADC Free Trade Area member. In February 2022, the DRC deposited its instrument of ratification and became the 42nd country to ratify the African Continental Free Trade Agreement (AFCFTA). The agreement aims to facilitate imports and exports among member countries with reduced or zero tariffs, free market access and market information, and the elimination of trade barrier, and provides numerous benefits to SMEs. In March 2022, the DRC joined the East African Community (EAC) as the seventh member, massively expanding the territory of this trading bloc, giving it access to the Atlantic Ocean and greatly increasing the number of francophones in what was originally a club of former British colonies. The GDRC is committed to experimenting with Special Economic Zones (SEZ). It is in this context that it promulgated in 2014, the Law n°14/022 fixing the regime of SEZ in the DRC.
To date, six areas for the creation of SEZs have been defined: the Industrial Zone of the Kinshasa Area, comprising the City Province of Kinshasa; Kongo Central Province, and the former Province of Bandundu; the Industrial Zone of the Kasaï Area, comprising the Provinces of Kasaï, Kasaï Central, Eastern Kasaï, Lomami and Sankuru; the Industrial Zone of the former Katanga Province; the Industrial Zone of Great Kivu; the Industrial Zone of the former Eastern Province; and the Industrial Zone of the former Equateur Province. According to the provisions of article 6 of this law, the administration of the SEZs in the DRC is the responsibility of a public establishment called the “Agency of Special Economic Zones (AZES).”
With a view to attracting and promoting investments in SEZs, the GDRC, in accordance with the provisions of the law on SEZs, issued Decree No. 20/004 of March 5, 2020, which sets out the advantages and facilities to be granted to investors operating in SEZs in DRC.
For developers: a total exemption from property, furniture, and business taxes on profits for 10 years, renewable once after evaluation; a 50 percent reduction in the tax rate set from the 21st year; a total exemption from import duties and taxes on machinery, tools and new or used equipment, capital goods, etc. for 10 years, etc.
For companies: a total exemption from property, movable and professional taxes on profits for 5 years, renewable once after evaluation; a reduction of 50 percent of the tax rate from the 11th year; an application of the exceptional depreciation system; a total exemption from import duties and taxes on machinery, tools, and equipment, new or used, and capital goods for 10 years; an exemption from export duties and taxes on finished products for 10 years.
On November 4, 2020, the GDRC launched the construction of the first Special Economic Zone – Maluku SEZ in Kinshasa, with the aim of attracting foreign investment and stimulating the creation of local businesses. This SEZ offers tax and regulatory advantages for investors and entrepreneurs including a 5-to-10-year tax exemption. More information is available at https://azes-rdc.com/.
In August 2021, the GDRC presented its Industrialization Master Plan (PDI) accompanied by a cost estimate of the structuring and industrializing infrastructures. The transport and communication infrastructure package (airport, rail, river, lake, maritime, road and energy), together with the densification of Special Economic Zones, is estimated at $58.3 billion.
Performance and Data Localization Requirements
The GDRC does not follow “forced localization,” the policy in which foreign investors must use domestic content in goods or technology. The DRC does not have specific legislation on data storage or limits on the transmission of data.
There are no known enforcement procedures for performance requirements in the DRC.
Investors benefiting from the Investment Code regime must guarantee the investment has a value-added rate of at least 35%
The GDRC does not require IT companies to hand over encryption data. Cellular phone companies must meet technology performance requirements to maintain their license.
According to officials, the Ministry of Digitalization is developing measures to prevent or restrict companies from freely transmitting customer data or data to other companies outside the economy/country. These measures may go beyond the requirements for data transferred within the country.
On November 25, 2020, President Tshisekedi enacted Law No. 20/017 on telecommunications and information and communication technologies. This law provides in its articles 126 to 133 the right to privacy and the protection of personal data in telecommunications and information technology and communication. This protection of privacy is secured by the right to secrecy of correspondence for all users of telecommunications networks and services and information and communication technologies (ICT). The law thus prohibits any interception, listening, recording, transcription and disclosure of correspondence without prior authorization from the General Prosecutor’s Office of the Court of Cassation. The authorization from the Public Prosecutor’s Office of the Court of Cassation, for a renewable period of three months, must demonstrate the facts in a judicial file, and it must include all the identification elements of the targeted link, the offence that justifies the interception, as well as its duration. The Post and Telecommunications Regulatory Authority of Congo (ARPTC) ensures the regulation and control of personal data protection.
5. Protection of Property Rights
The DRC Constitution protects private property without discriminating between foreign and domestic investors. Despite this provision, the GDRC recognized the lack of enforcement protecting property rights. The Congolese law on real property rights lists provisions for mortgages and liens. Real property (buildings and land) is protected and registered by the Office of the Registrar of Mortgages of the Ministry of Land Affairs. The registration of real property does not fully protect owners, as records are often incomplete and disputes over land transactions are common. Many property owners do not have a clear and recorded title to their property. In May 2021, the Ministry of Land Affairs presented the GDRC with its plan to digitize the land registry and secure land and property titles in the DRC. This plan will make it possible to digitize the entire land registry, to establish land security for investors and individuals alike, to electronically store all data collected in a database accessible to all public authorities, and to resolve land conflicts, which make up 80 percent of the cases handled.
Article 61 of Law No. 73-021 of 1973 on the general property regime, the land and real estate regime, and the system of securities, as amended and supplemented by Law No. 80-008 of 1980, provides that “a concession is a contract by which the State recognizes the right of use of land to a community, a natural person, or a legal entity of private or public law, under the terms and conditions provided for in the present law and its implementing regulations. However, a perpetual concession is only available to Congolese individuals. Foreigners and legal entities can only have access to an ordinary concession, which cannot exceed 25 years. However, the latter is renewable at the discretion of the State. In the event of non-renewal, the law provides for compensation for the concessionaire in certain cases (long lease, surface area). This compensation may not exceed 75 percent of the current and intrinsic value of the buildings incorporated into the land. Land is owned and managed by the GDRC. Government officials with the status of Registrars of Real Property Titles issue certificates of registration to individuals in their respective land districts.
Less than 10 percent of land has a clear property title, but the GDRC is in the process of promoting and encouraging people to regularize property titles by buying a final title called a “Record Certificate” (Certificat d’Enregistrement).
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 and IP theft is common. Law n°82-001 of 1982 on Intellectual Property (IP) organizes the procedure of IP protection. The registration is done in three steps with the General Secretariat of the Ministry of Industry, which is the competent body for intellectual property in the DRC: (1) filing the file – after paying the official fees, the applicant must file his file. When the file is filed, the applicant receives a filing number that specifies the day and time of filing. This number is used to prove the earlier filing of the IP. (2) Examination of the application and (3) registration of the application. This administrative procedure can take between six and nine months. The applicant can carry out the procedure alone or be accompanied and assisted by an Industrial Property Agent.
The law provides several tools to protect IP against those who want to appropriate or use it without the owner’s consent; in particular, the infringement action or the opposition, which makes it possible to defeat IP violations. The protection of the registered trademark is valid for a renewable period of ten years from the date of filing. The patent allows to benefit on the Congolese territory from a monopoly of exploitation on an innovation for a limited period of 20 years. The registration of a design or model offers a five-year protection that can be renewed only once. The GDRC has yet to join the African Intellectual Property Organization (OAPI), which offers greater protection of trademarks (a protection valid in 16 African countries).
In the past year, no new IP-related laws or regulations have been enacted and no reform bills are underway. The country is a signatory to 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 country tracks and reports seizures of counterfeit goods but does not keep a public record of IPR violations. Information on these seizures is often reported by the Congolese Office of Control (OCC) – [Office Congolais de Contrôle]- which is responsible for enforcing laws, regulations, and standards on the conformity of products, goods, procedures and services.
The DRC is not listed in USTR’s Special 301 report.
The DRC is not listed in the notorious market report.
6. Financial Sector
Capital Markets and Portfolio Investment
The government welcomes investment including by foreign portfolio investors. 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.
There is no domestic stock market. Although reforms have been initiated, the Congolese financial system remains small, heavily dollarized, characterized by fragile balance sheets, and difficult to use. Further reforms are needed to strengthen the financial system, sustain its expansion, and stimulate economic growth. Inadequate risk-based controls, weak regulatory enforcement, low profitability, and over-reliance on demand deposits undermine the resilience of the financial system. The DRC’s capital market remains underdeveloped and consists primarily of the issuance of Treasury bonds.
The Central Bank refrains from making restrictions on payments and transfers for current international transactions.
It is possible for foreign companies to borrow from local banks, but their options are limited. Loan terms are generally limited to 3-6 months, and interest rates are typically 16-21 percent. The inconsistent legal system, the often-burdensome business climate, and the difficulty of obtaining interbank financing discourage banks from making long-term loans. Opportunities for financing large projects in the national currency, the Congolese franc (CDF), are limited.
Money and Banking System
The Congolese financial system is comprised of 15 licensed banks, a national insurance company (SONAS), the National Social Security Institute (INSS), one development bank, SOFIDE (Société Financière de Development), a savings fund (CADECO), roughly 21 microfinance institutions and 72 cooperatives, 81 money transfer institutions which are concentrated in Kinshasa, Kongo Central, former Bandundu, North and South Kivu and the former Katanga provinces, 4 electronic money institutions, and 48 foreign exchange offices.
While the financial system is improving, it is fragmented and dominated by so-called “local” banks. With very different profiles (international, local, pan-African, networked, corporate, etc.) and approaches that diverge fundamentally in terms of management, governance, and terms of management and risk appetite, the so-called “local” commercial banks continue to dominate the banking sector. Pan-African banks are increasing their share, especially with the recent acquisition of the Banque Commerciale du Congo by the Kenyan Equity Group.
The Central Bank controls monetary policy and regulates the banking system. Banks are mainly concentrated in the provinces of Kinshasa, Kongo Central, North and South Kivu, and Haut Katanga. The banking penetration rate is about 7.6 percent, or about 5.3 million accounts, which places the country among the least banked nations in the world.
Mobile banking has the potential to significantly increase the banking customer base, as an estimated 35 million Congolese use cell phones. In the last five years, there has been an evolution and consolidation of prudential ratios or risk indicators of the banking sector and the introduction of alternative channels for financial service delivery and inclusion, such as Agency Banking and Mobile Banking. Mobile money continues to play an increasingly important role in financial inclusion in the DRC, as mobile money is a lever for economic and social inclusion. Over the past ten years, mobile money subscriptions in the DRC have increased by 20 percent per year.
There is no debt market. The financial health of DRC banks is fragile, reflecting high operating costs and exchange rates. In 2021 asset quality measures taken by the Central Bank allowed banks to absorb the economic impact of the COVID-19 pandemic. Fees charged by banks are a major source of revenue.
Statistics on non-performing loans are not available because many banks only record the balance due and not the total amount of their non-performing loans.
The financial system is primarily based on the banking sector, with total assets estimated at US$ 5.2 billion. Of the five largest banks, four are local and one is controlled by foreign holding companies. The five largest banks hold nearly 65 percent of bank deposits and more than 60 percent of total bank assets, or about $ 3.1 billion.
The country has an operating central banking system with Citigroup as the only correspondent bank.
All foreign banks or branches need to be accredited by the Central Bank, 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 a foreigner’s ability to establish a bank account in the DRC.
Foreign Exchange and Remittances
International money transfers are allowed when made through local commercial banks. On average, bank reporting requirements and payments for international transfers take less than a week. The Central Bank is responsible for issuing standards and regulations regarding foreign currency transactions trade. The only currency restriction on travelers is a $10,000 limit on the amount of money a person can carry when entering or leaving the DRC.
The GDRC requires the Central Bank to issue licenses to 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. Central Bank regulations set the Congolese franc (CDF) as the main currency in all transactions within the DRC, which is required to pay for education, medical care, water and electricity consumption, residential rents, and national taxes. Exceptions to this rule occur when both parties involved, and the appropriate monetary officials, agree to use another currency.
The CDF exchange rate floats freely, but the Central Bank carefully monitors the rate and intervenes to shore up the exchange rate.
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 has no declared Sovereign Wealth Fund (SWF), although the 2018 Mining Code refers to creating a future fund “FOMIN” that will be capitalized by a percentage of mining revenues. In October 2021, the Extractive Industries Transparency Initiative Technical Secretariat organized a workshop to develop the FOMIN decree as well as tools for managing the shares of mining royalties accruing to the provinces and local entities.
7. State-Owned Enterprises (SOEs)
There are 20 DRC State-Owned Enterprises (SOEs) operating in the mining, transportation, energy, telecommunications, finance, and hospitality sectors. There is a lack of reliable statistics on Congolese SOEs though in 2021 there was an independent audit of the mining SOE Gecamines. In the past, Congolese SOEs have stifled competition and have been unable to provide reliable electricity, transportation, and other important services. Some Congolese SOEs and other parastatals are in poor financial and operational condition due to debt and poor management of resources and employees.
DRC legislation does not grant SOEs an advantage over private companies in bidding for government contracts or in gaining preferential access to land and raw materials, although in the past the government has encouraged foreign investors to partner with SOEs.
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 DRC has not defined Responsible Business Conduct (RBC) for most industries, but the Labor Code includes provisions to protect employees, and there are legal provisions that require companies to protect the environment. The Global Compact Network DRC, a public-private consortium affiliated with the United Nations, encourages companies operating locally to adopt sustainable and socially responsible policies.
The GDRC has taken actions of limited impact to support RBC by encouraging companies to develop and adhere to a code of ethics and respect for labor rights and 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 impacts.
Reports of children working in the DRC’s artisanal mines has led to international pressure to find ways to ensure the DRC’s minerals supply chain is free of child labor. Concerns over the use of child labor in the artisanal mining of copper and cobalt have led to worries about the use of Congolese resources served to discourage potential purchasers. USG assistance programs to build capacity for labor inspections and enforcement are helping to address these concerns.
Development pressures have resulted in reports of violations of environmental rights. In one case, a prominent local businessman is seeking to develop a dam in a national park in the southeastern province of Haut Katanga. There is a case in eastern DRC of a local developer pressuring an environmental defender to end his activism.
There are no known high-profile and controversial cases of private sector entities having a negative impact on human rights.
With regard to human rights, labor rights, consumer protection, environmental protection, and other laws/regulations designed to protect individuals from the adverse effects of business, the GDRC faces many challenges in enforcing domestic laws effectively and fairly.
The GDRC has no known corporate governance, accounting, or executive compensation standards to protect shareholders.
There are independent NGOs, human rights organizations, environmental organizations, worker/trade union organizations, and business associations that promote or monitor RBC and report misconduct and violation of good governance practices. They monitor and/or defend RBC and are able to do their work freely.
The DRC has adopted OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Afflicted and High-Risk Areas 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. There are also existing domestic measures requiring supply chain due diligence for companies that source minerals that may originate from conflict-affected areas in DRC.
The DRC participates in the Extractive Industries Transparency Initiative (EITI), and the Voluntary Principles on Security and Human Rights. More information is available at https://www.itierdc.net/. The DRC publishes reports on its revenue from natural resources. There are domestic transparency measures requiring disclosure of payments to governments and of RBC/Business and Human Rights policies or practices. The mining code provides domestic transparency measures requiring the disclosure of payments made to governments, though they appear to be infrequently enforced. PROMINES, a technical parastatal body financed by the GDRC and the World Bank, aims to improve the transparency of the artisanal mining sector. Amnesty International and Pact Inc. have also published reports related to RBC in the DRC mining sector.
The DRC has a private security industry but is not a party to the Montreux Document on Private Military and Security Companies. It does not support the International Code of Conduct or Private Security Service Providers, nor does it participate in the International Code of Conduct for Private Security Service Providers’ Association (ICoCA).
The GDRC has a national climate strategy and/or a strategy for monitoring natural capital, such as biodiversity and ecosystem services. The GDRC has the following national climate change strategy documents: the National Policy, Strategy and Action Plan for Climate Change, the National Policy and Strategy Document on Climate Change in the DRC (2020-2024), the National Strategic Development Plan (PNSD), the Capacity Development Program for a Low Carbon Development Strategy, the Second National Communication to the Framework Convention on Climate Change, the National Strategy for Biodiversity Conservation in DRC Protected Areas, the National Biodiversity Strategy and Action Plan, and other key policy documents. The DRC’s vision in the fight against climate change is to promote a green, resilient, and low-carbon economy by rationally and sustainably managing its important natural resources in order to ensure ecological balance and the social, economic, cultural and environmental well-being of its population.
The GDRC has not introduced any policies to reach net-zero carbon emissions by 2050. The DRC ratified the United Nations Framework Convention on Climate Change (UNFCCC) in 1997, the Kyoto Protocol in 2005 and the Paris Agreement in 2017. To this end, the DRC is firmly committed to taking action to mitigate its greenhouse gas (GHG) emissions, to preserve the Congo Basin Rainforest, and to adapt to the effects of climate change, in accordance with Article 41 of the Paris Agreement. It has also submitted its first three National Communications on Climate Change to the UNFCCC for 2001, 2009, and 2015 respectively, and is currently preparing its fourth National Communication and finalizing its first Biennial Update Report (BUR).
Private sector organizations are key actors in the achievement of the Nationally Determined Contribution (NDC) and the implementation of climate change adaptation and mitigation activities, as they are also affected by climate change. Some examples of private sector organizations are COPEMECO (Confederation of Small and Medium Enterprises), FIB (Federation of Wood Manufacturers), FEC (Federation of Enterprises of Congo), SAFBOIS and SIFORCO, and agribusinesses. Their participation is required to make the implementation of the climate change policy and law possible, both for the implementation of mitigation and/or adaptation measures, and the realization of NDCs and the provision of data and information for the operation of the MRV and GHG inventories.
The government is hoping to benefit financially by establishing carbon credits to support the preservation of the rain forest. The GDRC is working on a comprehensive national forestry plan which will govern the use and protection its part of the Congo Basin Rainforest, the second largest rainforest in the world. The forestry sector is currently regulated in the DRC by the following legal provisions: Law No. 011/2002 of August 29, 2002, on the Forestry Code; Decree No. 05/116 of October 24, 2005, setting out the modalities for converting old forest titles into forest concession contracts and, extending the moratorium on granting forest exploitation titles; Decree No. 08/09 of April 8, 2008, setting out the procedure for allocating forest concessions. Decree No. 011/27 of May 20, 2011, setting the specific rules for the allocation of conservation forest concessions. In September 2021, GDRC decided, through a Council of Ministers, to lift the current moratorium on the granting of forest titles. After the international community protested, President Tshisekedi reinstated the moratorium in December 2021.
Under the DRC Public Procurement Act, environmental impact is one of the criteria for evaluating bidders’ offers.
The DRC constitution and legal code include laws intended to fight corruption and bribery by all citizens, including public officials. The Tshisekedi government has used public prosecutions of high-level officials and the creation of an anti-corruption unit (APLC) to improve the DRC’s anti-corruption enforcement. Prosecutions have led to jail terms but often subsequent early releases. The 2021 edition of Transparency International’s Corruption Perceptions Index (CPI) ranked the DRC 169th out of 180 countries, with a score of 19 out of 100, up from 18 out of 100 the previous year.
Anti-corruption laws extend to family members of officials and political parties. In March 2020, President Tshisekedi created the National Agency for the Prevention and Fight Against Corruption (APLC). Currently corruption investigations are ongoing for three Managing Directors of SOEs.
The country has laws or regulations to address conflicts of interest in the awarding of public contracts or procurement. Conflicts of interest committed in the context of a public contract and a delegation of public service are punishable by a fine of USD 12,500 to USD25,000.
The government through regulatory authorities encourages or requires private companies to establish internal codes of conduct that, among other things, prohibit bribery of public officials.
Law 017-2002 of 2002, establishes the code of conduct for public officials, which provides rules of conduct in terms of moral integrity and professional ethics and the fight against corruption in socio-professional environments. Private companies use internal controls, ethics, and compliance programs to detect and prevent bribery of government officials.
The DRC is a signatory to both the UN Convention against Corruption (UNCAC) and the African Union Convention on Preventing and Combating Corruption but has not fully ratified the latter. The DRC is not a signatory 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 consortium “The Congo is Not for Sale,” have an important role in revealing corrupt practices, and the law protects NGOs in a whistleblower role. However, in 2021 whistleblowers from Afriland First Bank that alleged to the international NGO Global Witness interaction between sanctioned individual Dan Gertler and the bank were subjected to prosecution and, in a private proceeding, sentenced to death in absentia. Although the government worked with Global Witness to contest the case, it remained unresolved as of early 2022. NGOs report governmental or other hindrance to their efforts to publicize and/or address corruption. The Observatory of Public Expenditure (ODEP), which works with civil society organizations, raises awareness of the social impact of the execution of finance laws in order to improve transparency and accountability in the management of public finances; to participate in the fight against corruption; and to promote citizen involvement in each stage of the budget process.
U.S. firms see corruption and harassment by local security forces as one of the main hurdles to investment in the DRC, particularly in the awarding of concessions, government procurement, and taxation treatment.
Resources to Report Corruption
Contact at the government agency or agencies that are responsible for combating corruption:
Chouna Lomponda Director of Communications and Spokesperson Agence de Prévention et de Lutte contre la Corruption (APLC) Général Basuki, N°14C, Ngaliema, Kinshasa, RDC +243 89 33 02 819 email@example.com
Contact at a “watchdog” organization:
Ernest MPARARO Executive Secretary Ligue Congolaise de Lutte contre la Corruption (LICOCO) Luango, N°14, Quartier 1, N’djili Kinshasa RDC +243 81 60 49 837 / +243 89 89 72 130 firstname.lastname@example.org https://licoco.org/
10. Political and Security Environment
The DRC has a history of armed group activity, sometimes of a politicized nature and particularly in the east of the country, and of elections-related violence and civil unrest. The 2018 election, which took place after years of delay marked by protests that were in some instances violently repressed, was marred by irregularities, but most citizens accepted the announced result, and the election aftermath was calm. In January 2019, Felix Tshisekedi became President in the DRC’s first peaceful transition of power. Following President Felix Tshisekedi’s establishment of a new political alliance known as the “Sacred Union,” Tshisekedi appointed Jean-Michel Sama Lukonde as Prime Minister in April 2021.
The foreign terrorist organization-designated ISIS-DRC (aka the 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. In May 2021, Tshisekedi declared a “state of siege” – effectively martial law – in North Kivu and Ituri provinces, installing military governors and ramping up Armed Forces of the Democratic Republic of the Congo (FARDC) operations against ISIS-DRC/ADF and other armed groups. The state of siege has been accompanied by problematic human rights practices; the United Nations Stabilization Mission in the Democratic Republic of the Congo (MONUSCO) has documented violations including extrajudicial killings by FARDC and police, while military governments have restricted civil society and political activists and prosecuted some for criticizing the state of siege.
The DRC labor market has a large, low-skilled workforce with high youth unemployment. Women make up 47 percent of the labor force. Expatriates frequently work in jobs requiring technical training in the key mining sector. Approximately 85 percent of the nonagricultural labor force works in the informal sector. About 60 percent of the total labor force works in agriculture.
Informal employment dominates the labor market in the DRC. According to the World Bank, the DRC has one of the highest rates of informal work in the world, with about 80 percent of urban workers engaged in the informal economy. The Congolese trade union confederation estimates that the sector employs 97.5 percent of the country’s workforce. Informal workers in the artisanal mining sector have raised worries about the use of child labor in mining, forcing companies to go through an accreditation system to show they do not use child labor. It takes many forms and is characterized by the non-respect or non-application of labor standards related to minimum wage, working hours, safety and other social standards related to the social health system, retirement, etc. The informal sector’s share of GDP is estimated at nearly 55 percent. The EGI-ODD results show that slightly more than 91 percent of jobs in the non-agricultural sectors are informal, meaning that these workers do not have a contract, receive paid vacations, or family allowances. By gender, 94 percent of women’s jobs in the nonagricultural sector are informal, compared to 87.7 percent for men.
DRC labor law stipulates that for companies with more than 100 employees, ten percent of all employees must be local. If the general manager is a foreigner, his or her deputy or secretary general must be a Congolese national. The government may waive these provisions depending on the sector of activity and available expertise. There are no onerous conditionality, visa, residency, or work permit requirements that impede the mobility of foreign investors and their employees.
The DRC faces a shortage of skilled labor in all sectors. There are few formal vocational training programs, although Article 8 of the labor law requires all employers to provide training to their employees. To address the high unemployment rate, the GDRC has enacted a policy giving Congolese preference in hiring over expatriates. Laws prevent companies from laying off workers in most cases without compensation. These restrictions discouraged hiring and encouraged the use of temporary contracts instead of permanent employment. There is no government safety net to compensate laid-off workers.
There are no labor laws waived in order to attract or retain investment, nor are there additional/different labor law provisions in special economic zones, foreign trade zones, or free ports compared to the general economy. The law grants and guarantees equal treatment to all national and foreign investors.
Congolese law bans collective bargaining in some sectors, particularly 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 authorization and to undergo lengthy mandatory arbitration and appeal procedures before going on strike. Unions often strike to obtain wage increases or payment of back wages and seek to make gains through negotiation with employers.
The DRC government has ratified all eight core International Labor Organization (ILO) conventions, but some Congolese laws continue to be inconsistent with the ILO Forced Labor Convention.
No strikes in the past year have posed an investment risk and government’s reaction.
According to some businesses, the government does not effectively enforce relevant employment laws. 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.
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 the Labor Inspector General reports that funding is not enough to facilitate the conduct of efficient labor inspections.
No new labor related laws or regulations have been enacted in the past year, and no bills are pending.
12. U.S. International Development Finance Corporation (DFC), and Other Investment Insurance or Development Finance Programs
Though there are currently no DFC projects in the DRC, DFC is open to working on future projects.
The U.S. International Development Finance Corporation (DFC) provides political risk insurance and project financing to U.S. investors and non-governmental organizations.
There is an active U.S.-DRC Investment Incentive Agreement in force.
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)