The Democratic Republic of Congo is resolutely engaged in a vast process of cleaning up its business environment through implementing reforms affecting all sectors of economic life to reduce, simplify, and make transparent administrative operations procedures, time, and costs transparent.

And within the framework of its institutional prerogatives, the National Agency for the Promotion of Investments (ANAPI), technical adviser of the Central Government and the provincial Governments as regards the promotion of investments and the improvement of the business climate, ordered a study to evaluate the effectiveness of the application of the reforms initiated by the authorities of the country to cleanse the environment of the businesses in the 26 provinces that counts the DRC.

The study, conducted by Target, a polling and consulting firm based in Kinshasa, focused on five indicators, namely: the start of economic activity, taxation (land tax and rental income tax), building permits, real estate transfers, and the quality of administration and institutions (focusing on the number of economic decrees, excluding budgetary decrees, issued by the provincial assemblies between 2017 and 2022). The objective was to assess the impact of the reforms on the purposes of each of the above indicators, to ascertain the level of satisfaction expressed by the beneficiaries of these reforms, and finally, to rank the provinces according to the performance criteria in the implementation of the reforms.

Data collection for this study was organized from October 20 to December 19, 2022, mainly in the main towns of the country’s 26 provinces. During a workshop organized on Tuesday, February 7, 2023, at the Sultani River Hotel in Kinshasa, the Cabinet Target restitution its study’s preliminary results to the sectoral Services delegates and the Provinces, among which the provincial Ministers of the Plan. The various representatives have, on this occasion, validated the study’s results.
Thus, the final results of the study indicate a general level of implementation of the reforms that are still low at the provincial level, coupled with an apparent disparity between the provinces in terms of both ownership of the process of implementing the reforms initiated at the central station and the application of the reforms on the ground. A final ranking of the provinces is established at the end of the study, based on the cumulative scores of each section on the five indicators selected. The low scores are mainly explained by the absence of provincial economic edicts in most regions. Only the areas of Kinshasa, Equateur, and Tshopo scored well on this indicator and obtained a score greater than or equal to 50 out of 100 in the general ranking.

Among the main difficulties identified is the lack of communication and awareness of business climate reforms, administrative red tape, the absence of economic decrees affecting the business environment, and resistance to reforms by the public administration, which is reflected in the failure to display the costs and procedures of various operations. These factors hinder the growth of businesses and limit their ability to create jobs.

By way of illustration, the "start-up of economic activity" indicator, which measures efforts to reduce the time, costs, and procedures applicable to business creation, the survey results show that applicants who went to the stop shop (GUCE), the Tribunal de Commerce and the Tribunal de Grande Instance to obtain the administrative documents needed to operate, had to spend an average of 41, 40 and 80 days respectively. On the other hand, in the majority of provinces where the GUCE is installed, entrepreneurs spend between $103 and $293 for all the formalization procedures for their activities; and, on average, $289 for those who start their operations at the TRICOM level, and between $78 and $775 for those who go to the TGI.

Regarding the tax indicator, only 11% of respondents know the tax reforms. But speaking of the property tax sub-indicator, 61% of respondents claim to be aware of it.

For the real estate transfer indicator, the survey results show that the vast majority of respondents have a low level of knowledge about the transfer tax rate applied in their respective provinces on the one hand. On the other hand, 77% of respondents say they have paid administrative fees directly for a real estate transfer operation. As for the building permit indicator, 33% of respondents believe they have sufficient knowledge of the reforms on building permits.

To meet the challenges highlighted by this study, ANAPI recommends a series of measures to improve the effectiveness of ongoing reforms and to strengthen the process of improving the business climate in the DRC. These measures include the need to enhance the Public-Public Dialogue and the Public-Private Dialogue; continued efforts to improve the social conditions of public officials in charge of implementing the reforms, as well as the fight against corruption and other economic crimes; the establishment of each province of an appropriate institutional framework (Business Climate Unit) supported by the area; and capacity building for economic actors to better take advantage of the opportunities offered by the reforms.

In sum, the publication of the results of this study is an important event for the DRC and all actors involved in the country’s economic development. The recommendations made in this study could help improve the business climate in the DRC and strengthen the country’s competitiveness on the international scene. Furthermore, the results of this study could enrich the national barometer on the business climate currently being implemented by the Business Climate Unit of the Presidency of the Republic and allow for better preparation of the revision of the roadmap of government reforms on the business climate currently being prepared.

Communication dept
ANAPI