DR Congo

The Democratic Republic of the Congo (DRC), located in the center of the continent, is one of the largest countries in Africa. Known for its richness of nature, including wild forests, volcanoes and lakes. Due to its strategic location and resources, the DRC is attracting keen interest from international investors.

General information

Official name of the state — Democratic Republic of the Congo (DRC). The state occupies an area of 2,344 858 km² (11th in the world). The population is approximately 96,821,572 people (as of the beginning of 2023).

The ethnic composition of the population of the Republic is more than 200 peoples and nationalities, the four largest nations — The Mongo, Luba, Kongo and Mangbetu Azande together make up 45% of the population.

The Democratic Republic of the Congo (DRC) is a multilingual country with an estimated total of 242 living spoken languages. The official language is French, which is used in government and educational institutions, the armed forces and in business life. Four languages have a “national” status: Congo, Lingala, Swahili, Luba.

About 90% of the population — Christians. Approximately 60% of them are Catholics, the rest — Protestants, Kimbangists (supporters of the Christian African Church) and a small number of Orthodox Christians. The number of Muslims inhabiting mainly the eastern and northeastern parts of the country is about 2 million people.

The official currency of the country is the Congolese franc.

Kinshasa (until 1966 — Leopoldville) — capital and largest city of the Democratic Republic of the Congo.

Kinshasa is the second most populous city in Africa (about 15 million inhabitants) and the third largest urban agglomeration on the continent. It is also the largest French-speaking city in the world by population.

The city is located along the southern bank of the Congo River opposite Brazzaville, the capital of the Republic of the Congo. This is the only place in the world where two capitals directly face each other on opposite banks of the river. The river, also called the Zaire in the Kinshasa area, is an important transport artery throughout most of its basin. Many of the Congo's tributaries are also navigable. Large river barges operate between Kinshasa and Kisangani (located 1,300 km from the capital). There is a ferry between Kinshasa and Brazzaville, since there are no bridges across the river.

Kinshasa is connected by railway to many regions of the country and abroad. N'Gili Airport is the largest of the four international airports in the Democratic Republic of the Congo. However, the airport's infrastructure has largely not been modernized since colonial times.

The city has textile, food-flavoring, chemical industries, mechanical engineering and metalworking, motorcycle and bicycle factories, shipbuilding, ship repair, woodworking, and production of building materials. In the Maluku area — metallurgical complex.

Lubumbashi (until 1966 — Elizabethville) — the second largest city in the Democratic Republic of the Congo. Copper mining and smelting center. Lubumbashi — railway junction (although the railways are in poor condition). There is an international airport here. Lubumbashi has a university, a Center for the Study of Industrial Development of Central Africa, copper smelting, textile, and chemical industries.

Mbuji-Mayi (until 1966 — Bakwanga) — the country's third largest city, an important diamond mining center.

The Democratic Republic of the Congo is divided into 26 provinces.

History, geography, culture, mentality

The history of the Democratic Republic of the Congo is divided into the period before the arrival of Europeans (1491), the period of Portuguese expansion on the coast (1491-1876), the period of active Belgian colonization (1876-1960) and the period of formation of Congolese statehood (from 1960).

Since ancient times, the population of the Congo has been pygmies. The migrating Bantu people settled in the Congo around the 2nd century BC. Among the main Bantu occupations is metallurgy. These people were able to create early state associations: pre-colonial Congo, Cuba, Ndongo, Luba, Matamba, Bakuba, Kakongo, Bolia. Over time, Congo stood out from the rest as the most significant state of the 14th century. In those days, the basis of the state budget was income received from the slave trade. Congolese slaves were in good demand in European countries, especially Portugal. Many slaves went to work on plantations in America.

In 1491, the first colonialists appeared on the lands of the Congo — Portuguese. The Portuguese were the first Christians to establish a foothold in this territory. Subsequently, major local rulers converted to Christianity and took new names. Portuguese expansion, along with the arbitrariness of the feudal authorities, caused a violent protest among the Congolese, and local residents rebelled, led by Mbula Matadi. At that time, Alvaro I, closely associated with the Portuguese, was in power. The uprising took place in the 70s and 80s of the XVI century, and ended in victory for the rebels.

In 1703, an anti-European movement called the “Antonian heresy” appeared in the country. Constant civil strife and slave trade with the Portuguese increasingly weakened the state. This led to the division of the territory into many small autonomous principalities. Fragmentation persisted throughout the 19th century.

In 1876, the Belgian king, under the official pretext of exploring African civilization, sent undercover emissaries to the Congo. Under the guise of missionaries and travelers, the people of the Belgian king Leopold II forced the leaders of local tribes to sign enslaving treaties.

Thus the Congo found itself under the complete subordination of Leopold II. By 1908, the Congo finally became a colony, called the Belgian Congo.

The mining industry is thriving in the state, and new cities are growing, named after the colonialists. This is how the capital Leopoldville, named after the Belgian ruler, and Stanleyville — named after one of the early explorers.

During this period, local residents' dissatisfaction with the actions of the colonialists grew, and anti-colonial protests took place. The end of the Second World War contributed to the emergence of political parties and trade unions that sought to defend the independence of the Congo. In 1959, Patrice Lumumba's party won the parliamentary elections, where Lumumba became prime minister and Kasavubu — president.

In June 1960, the Congo was officially proclaimed an independent republic and accepted into the UN. Since the first days of independence, contradictions have been growing between the main officials of the state — this results in armed clashes. Regions of the Congo declare their right to autonomy and become separate republics.

In order to get out of this situation, Joseph Desire Mobutu — The colonel and chief of the general staff carried out two coups in order to finally suppress the scattered uprisings. As a result, Mobutu managed to consolidate his power in the Congo and establish a one-party authoritarian regime. Period from 1965 to 1997 called the era of Mobutu.

The newly created state, having gained independence, does not stop there — a new constitution is adopted. In 1967, a monetary reform was carried out, which had a positive impact on the financial situation in the country. A presidential system of organizing the highest bodies of power was designated. At the end of October 1971, the state was given the name — Republic of Zaire.

In 1994, genocide against the Tutsi occurs in Rwanda, and therefore hostilities spread to Zaire. Laurent Kabila seized power and independently declared himself the head of the new Democratic Republic of the Congo. Second Congo War — The uprising of Kabila's associates in 1998 lasted 3 years. In 2001, before the end of the war, Laurent Kabila died and his son Joseph Kabila took his place.

Joseph concluded a truce with his opponents and joined their military forces to the country's active army.

In 2016, President Kabila's term was coming to an end, and he announced that he did not intend to leave his post. His statement sparked mass protests. For various reasons, the elections were delayed for a long time and were only able to take place in 2018.

Felix Tshisekedi was declared President of the DRC — opposition candidate. For the first time in the history of this state, there was a peaceful transfer of power from Joseph Kabila to Felix Tshisekedi.

Democratic Republic of Congo — a state in central Africa bordering the Republic of the Congo, the Central African Republic, South Sudan, Uganda, Rwanda, Burundi, Tanzania, Zambia, Angola, including the Angolan enclave of Cabinda. In its far west, the DRC has access to the Atlantic Ocean on a short stretch of coastline between Angola and Congo, on the lower Congo River. The country's territory occupies the Congo River basin. Along the eastern border lies a strip of deep depressions of the East African Rift System, framed by mountains (Rwenzori Massif), the highest peak — Stanley Peak (5109 m). Along the line of the depressions there are large lakes Edward, Albert, Kivu, Mveru, and Tanganyika. To the north of Lake Kivu there is the Virunga volcanic massif (about 100 volcanoes in total, height up to 4507 m - Mount Karisimbi) with active volcanoes Nyamlaghira and Nyiragongo.

The country is distinguished by significant ethnocultural diversity (more than 200 peoples and nationalities, 242 languages). The culture of the Democratic Republic of the Congo is heavily Western influenced. People are generous by nature and give gifts to each other on some occasion. For any celebration or festival, a goat or chicken is usually slaughtered. Singing and dancing — The only forms of entertainment that are accompanied by brewing and the production of other alcoholic beverages. The locals use bullion crosses, a superstition on which they base their entire faith, which they believe brings wealth and prosperity.

With the rapid development of the copper industry in the southern province of Katanga, traditional art forms still survive in the region, albeit somewhat modified. There you can find crafts and products based on handicrafts — rugs made from raffia palm, wood carving, painting, basket weaving, jewelry and mask making. Post-Revolutionary War paintings often use themes of exploitation, poverty, and injustice.

Power

DRC is a presidential republic.

The head of state is elected by universal secret ballot for a term of 5 years with the right to one re-election.

The Constitution of February 18, 2006 provides for the separation of the executive, legislative and judicial branches of power. January 20, 2011  a number of amendments were made to the Basic Law, including the establishment of a majoritarian electoral system with presidential elections held in one round and the expansion of the powers of the head of state over legislative and provincial bodies.

The Congolese leader leads the armed forces and heads the government. The Cabinet of Ministers consists of 67 members. The legislative branch is represented by a bicameral parliament. Lower House — The National Assembly consists of 500 deputies. Upper House — Senate. Consists of 109 senators.

The judicial system was reorganized as a result of the reform of 2013–2018. Instead of the Supreme Court, the Constitutional Court, the Court of Cassation and the State Council were created.

Economy

The DRC economy is largely dependent on commodity prices, especially the prices of copper, cobalt, tin, tungsten and tantalum. Most mineral deposits remain untapped, with an estimated value of $24 trillion. The DRC is Africa's largest copper producer and the world's largest producer of cobalt, a strategic metal used in battery production.

The medium-term outlook for the DRC is favorable, with growth estimated at 6.4% in 2023. The mining industry is expected to grow further into 2024 as the Kamoa-Kakula copper mine entered its second phase of production at the end of 2022.

The DRC's top five exports include refined copper and crude alloys, cobalt, crude copper, copper ores or concentrates and crude oil.

The country has three main economic centers, concentrated in large population centers with significant commercial or industrial bases. This is:

• Kinshasa and Congo, Central Provinces: Kinshasa is a dynamic economic center. Most foreign companies operating in the DRC maintain a presence in Kinshasa, and Congolese businesses tend to have their headquarters located in the city. Central Congo — the only province of the DRC with direct access to the sea. Matadi, located approximately 170 miles (273 km) southeast of Kinshasa, is the capital and largest city of the province, as well as the main seaport. A meter gauge railway and a two-lane paved road connect Kinshasa and Matadi. Although the Congo River flows between Kinshasa and Matadi, the section connecting them is not navigable.
• Haut-Katanga and Lualaba Provinces: These two provinces form the southern economic center, comprising the southern half of the former Katanga Province, bordering Angola and Zambia. Today, the region is home to numerous state and international mines. Unlike Kinshasa, Lubumbashi and a number of other key cities in the Lualaba and Haut-Katanga provinces are connected to the South African rail network.
• Provinces of North Kivu, South Kivu, Ituri, Bas-Uélé, Haut-Uélé and Tshopo: This area of economic activity extends from the cities of Bukavu and Goma on the border with Rwanda to the river port city of Kisangani in the west and the gold mines of Bas-Uélé and Ituri. They form the third economic center of the country. The area experiences chronic instability due to ongoing conflict between various armed groups fighting the DRC government and each other. Despite the challenging conditions, the region is home to a number of industrial and artisanal mines for cobalt, gold and diamonds, as well as a rich agricultural sector with export potential.

Household agriculture is the main source of food and income for the majority of the population. Agriculture, livestock, fisheries and forestry together employ more than 75% of the workforce and on average account for more than 40% of GDP.

Although the country is rich in agricultural potential, the deterioration of transport networks and agricultural services after independence led to a return to subsistence agriculture and the collapse of market production. Food products such as grains and fish are imported in increasing quantities. Coffee is the main agricultural export product, although much of it is smuggled out of the country.

In the humid equatorial region, the main food crops are cassava and rice. Peanuts, oil palms and fruit trees are also important, and Robusta coffee is the main cash crop. In the eastern highlands, yams, beans and sweet potatoes are used as food crops, and Arabica coffee and tea are export commodities. Corn, an important food crop, is mainly concentrated in the southeast. Vegetable growing is widespread throughout the Congo.

Livestock and poultry are kept in each province. However, commercial meat production is limited and the country depends on imports to meet its needs.

A small portion of annual wood production is exported to make veneer or plywood, most is used locally as fuel. There is commercial freshwater and ocean fishing.

The country's main economic resource is mineral deposits; the mining industry produces almost 90% of total exports.

Minerals found in Katanga include copper, cobalt, zinc, cassiterite, manganese, coal, silver, cadmium, germanium, gold, palladium, uranium and platinum. The area west of Lake Kivu contains cassiterite, columbotantalite, wolframite, beryl, gold and monazite. Lake Kivu also contains huge reserves of methane, carbon dioxide and nitrogen. In the south and central part of Congo there are deposits of iron ore and gem-quality diamonds, and the central regions are rich in industrial diamonds. In the northeast there are deposits of gold, coal and iron ore. In the northwestern regions there are promising deposits of gold, monazite and diamonds. Coastal Congo contains bauxite, gold and offshore oil deposits. The limestone deposits found throughout the country are considered to be among the richest in Africa.

Congo's forest reserves cover more than half of the country's territory and are among the largest in Africa. Game supplements the local diet and is an important commodity in local trade. Rivers, lakes, swamps and the ocean contain huge stocks of fish.

The country's hydropower resources are estimated to account for about half of Africa's potential power. This enormous potential comes from the numerous rapids along the rivers of the Congo system. Thermal energy can be obtained from forests, coal and oil fields.

Manufacturing accounts for a small share of Congolese GDP. The development of this sector is hampered by various factors, including difficulties in acquiring equipment and spare parts, as well as unreliable electricity supplies. Consumer industries produce processed foods, beverages, cigarettes, textiles, printed products, hosiery, footwear and leather, metal fabrics, and chemical products such as soap, paint, rubber, and plastics. Supply and equipment industries include spinning and weaving mills, chemical plants, and manufacturing plants for machinery, transportation materials, nonmetallic minerals, and wood products.

The highest concentration of hydroelectricity consumption is found in mining areas and in Kinshasa. The hydroelectric dam was built in 1972 on the lower reaches of the Congo River at Inga Falls. However, despite the dam's enormous potential, the poor condition of the necessary equipment has made power shortages common. Most Congolese depend on firewood for domestic fuel.

Mineral products make up the majority of the country's total exports: diamonds, which account for almost half of trade revenues, are the most valuable export commodity, while crude oil, cobalt and copper are also important. Coffee is the country's most important agricultural export product. Exported products have limited value and volume. Imports consist mainly of food, consumer goods, machinery (mainly mining and transportation equipment) and fuel. Although Belgium has traditionally been the main trading partner, Congo has developed significant trade relations with other European Union countries, South Africa and China.

The organization of a transport network is critical for the DR Congo, a country of continental size, with rich economic resources and limited maritime access. The main transport arteries are the Congo River and its tributaries.

Navigability is possible throughout the year on sections of the Congo River, navigable from Banana to Matadi, from Kinshasa to Kisangani, from Obundu to Kindu and from Kongolo to Bukama. The main port of maritime shipping — Matadi, located near the mouth of the Congo River. Railways also serve the southern regions.

Business climate

The DRC Investment Code provides attractive customs and tax incentives for investors who submit their investment projects (business plan) to ANAPI. Once the project has been approved by ANAPI for a period not exceeding 30 days, the investor receives tax and para-fiscal benefits:

• Exemption from duties and taxes on the import of machinery, materials and equipment, with the exception of 2% administrative tax and VAT (paid by the organizer, but reimbursed by the Tax Administration)
• Exemption from income tax
• Exemption from property tax
• Exemption from proportional rights when creating SARL or increasing their authorized capital.

The duration of the benefits provided is 3, 4 or 5 years depending on the economic region in which the investment is located:

• 3 years: economic region A (Kinshasa, capital);
• 4 years: economic region B (Bas-Congo, cities of Lubumbashi, Likasi, Kolwezi);
• 5 years: economic region C (all others).

On November 1, 2012, the Prime Minister's decree on the implementation of the Investment Code measures was promulgated. It highlights the benefit to the investor of the benefits arising from the approval of his project within the statutory period of 30 days and sets out a mechanism whereby after the expiration of this period of 30 days the approval is deemed to have been received. Consequently, financial authorities are obliged to provide the investor with all customs, tax and para-fiscal benefits provided for by the Investment Code, taking into account the file receipt signed by the General Director of ANAPI.

In addition, in order to facilitate the completion of the investment, the approval decision taken by ANAPI (not yet approved by the Inter-Ministerial Order/Plan and Finance) may, if necessary, be submitted by the investor to the customs administration for authorized export of authorized equipment, materials and tools.

Conditions for access to the benefits of the Investment Code:

• Become an economic entity in accordance with Congolese law;
• The total cost of the projected investment (all expenses combined) must be at least US$200,000 (or at least US$10,000 for SMEs);
• Commitment to comply with environmental standards;
• Obligation to comply with labor rules;
• Investments must guarantee a level of added value of at least 35%.

Investment climate

According to the UNCTAD World Investment Report 2022, FDI growth in the Democratic Republic of Congo increased from US$1.6 billion in 2020 to US$1.8 billion in 2021. In the Democratic Republic of Congo, inflows into the mining sector supported FDI as cobalt prices rose amid rising demand for its use in smartphones and electric vehicle batteries — the country is the world's leading cobalt producer and Africa's largest copper producer. Total FDI stock in 2021 is estimated at US$29.1 billion. Such levels remain well below the country's potential: in fact, the DRC has rich mineral resources and enormous potential in sectors such as mining, energy (especially hydropower) and infrastructure. Today, the mining sector attracts the most FDI, followed by telecommunications. South Africa, Belgium and China are the country's main investors.

The country has a large domestic market and is strategically located in the center of the African continent, and is also a member of the Common Market for Eastern and Southern Africa (COMESA). The Democratic Republic of Congo has rich hydropower and mining resources that remain largely untapped. To attract FDI, the DRC government provides incentives. The country's legal system is currently being reformed, which is expected to increase transparency and earn the trust of potential investors. In 2018, the mining code was amended to increase taxes and royalties, require that mining companies be owned at least 10% by indigenous people, and severely restrict the export of unprocessed minerals under a new mining permit. Some of China's largest mining companies have invested heavily in the country in recent years, particularly in cobalt and copper mines. However, Chinese companies currently own 15 of the 17 cobalt enterprises in the DRC.

Reasons to invest in the Democratic Republic of Congo:

• high growth rates of the national economy
• rich mineral resources, 80 million hectares of arable land and about 1,100 minerals in the ground
• The DRC occupies a key geostrategic position in Africa and is an important country for connecting the various markets of Africa. 

The DRC is a member of various African regional economic communities (which allows it to expand its market), including:

• Economic Community of the Great Lakes (CEPGL).
• Economic Community of Central African States (CEEAC).
• Common Market for Eastern and Southern Africa (COMESA).
• Southern African Development Community (SADC).
• African Union (AU).
• African, Caribbean and Pacific (ACP) Group
• World Trade Organization (WTO).
• United Nations Conference on Trade and Development (UNCTAD).
• Multinational Investment Guarantee Agency (MIGA).

The DRC government provides some incentives to foreign investors. Incentives can range from tax breaks to duty exemptions depending on the location and type of enterprise, the number of jobs created, the degree of training and promotion of local personnel, and the export potential of the enterprise.

In addition, the government has created a “single window” for foreign investors — Guichet Unique, which brings together all government agencies involved in registering a company in the DRC.

Business and investment support structures

The Democratic Republic of the Congo (DRC) provides several structures and agencies to support business and investment. Important organizations in this area are:

• Agence Nationale pour la Promotion des Investissements (ANAPI). This National Investment Promotion Agency is responsible for attracting and facilitating foreign investment in the DRC. ANAPI provides information on investment opportunities, business planning advice and assistance with the business registration process.
• Centre de Promotion des Investissements en République Démocratique du Congo (CPI-RDC). The DRC Investment Promotion Center also provides information and supports investors in the process of registering and developing their businesses in the country.
• Banque Congolaise d'Investissement (BCI). The Congolese Investment Bank provides financial support for business projects and investments. It plays a key role in providing financial services and loans to entrepreneurs and companies.
• Chambre de Commerce, d'Industrie, d'Agriculture et d'Artisanat (CCIAA). The DRC Chamber of Commerce and Industry supports entrepreneurship and provides business services, including training, advice and regular networking events.
• Ministère des Petites et Moyennes Entreprises (MPME). The Ministry of Small and Medium Enterprises is dedicated to supporting small and medium-sized enterprises in the country by providing them with the necessary resources, advice and training.
• Fonds pour la Promotion de l'Industrie (FPI). The Industry Promotion Fund provides financial support and encourages the development of industry in the country.
• Confédération des Entreprises du Congo (FEC). This is a confederation of enterprises in the DRC, which represents business interests before the government and other authorities.

It is important to note that despite these structures, the DRC faces various challenges, including political instability and social problems, which may affect the business environment. Potential investors are advised to carefully review the risks and conditions of doing business in the Democratic Republic of the Congo before deciding to invest.