Contents 1 Background 2

DEMOCRATIC
REPUBLIC OF
THE CONGO –
Country Profile
Contents
1
Background 2
7
Investing in the DRC
7
1.1
History 2
7.1
Openness to foreign investment
7
2Population
2
2.1
Population figures
2
2.2
Population growth rate 2
2.3
Age structures (2011 estimates)
2
2.4
Gender ratios (2011 estimates)
2
2.5
Life expectancy (2011 estimates)
2
2.6
Ethnic groups 2
2.7Religions
2
2.8Language
3
2.9Education
3
2.10Health
3
3Economy
3
3.1
3
Natural resources
3.1
Latest Economic indicators
4
3.3
Two year forecast
4
4
Government and Politics
5
7.2
Conversion and transfer policies
8
7.3
Expropriation and compensation
8
7.4
Dispute settlement
9
7.5
Performance requirements and incentives
9
7.6
Right to private ownership and establishment
10
7.7
Protection of property rights
10
7.8
Transparency of the regulatory system
10
7.9
Efficient capital markets and portfolio investment
10
7.10 Competition from state-owned enterprises (SOEs) 11
7.11 Corporate social responsibility 11
7.12 Political violence
11
7.13Corruption
11
7.14 Bilateral investment treaties
12
7.15 OPIC and other investment insurance programmes 12
7.16Labour
12
7.17 Foreign trade zones / free ports
12
7.18 Foreign Direct Investment statistics
12
13
14
4.1
Political structure
5
4.2
International organisation participation
5
7.19 Step-by-step procedures for opening a
business in the DRC
5
Transport and Communications
6
8
Country Outlook: 2012 – 2016
6
8.1Overview
14
5.2Roads
6
8.2
14
5.3Ports
6
8.3
International relations
14
6
8.4
Policy trends
14
5.1Railways
5.4
Air transport
Domestic politics
6
8.5
Economic growth
15
5.6Internet
6
8.6
External account
15
6
7
A
Appendix – sources of information
15
5.5Telecommunications
SWOT analysis of the DRC
© 2012 KPMG Services Proprietary Limited, a South African company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss
entity. All rights reserved. MC7204 KPMG and the KPMG logo are registered trademarks of KPMG International Cooperative (“KPMG International”), a Swiss entity. The foregoing information is for general use only. NKC does
not guarantee its accuracy or completeness nor does NKC assume any liability for any loss which may result from the reliance by any person upon such information or opinions.
1
1Background
1.1History
Established as a Belgian
colony in 1908, the thenRepublic of the Congo
gained its independence
in 1960, but its early years
were marred by political and
social instability. Col. Joseph
Mobutu seized power and
declared himself President
in a November 1965 coup.
He subsequently changed
his name - to Mobutu Sese Seko - as well as that of the country - to
Zaire. Mobutu retained his position for 32 years through several sham
elections, as well as through brutal force.
Ethnic strife and civil war, touched off by a massive inflow of
refugees in 1994 from fighting in Rwanda and Burundi, led in May
1997 to the toppling of the Mobutu regime by a rebellion backed by
Rwanda and Uganda and fronted by Laurent Kabila. He renamed the
country the Democratic Republic of the Congo (DRC), but in August
1998 his regime was itself challenged by a second insurrection again
backed by Rwanda and Uganda. Troops from Angola, Chad, Namibia,
Sudan, and Zimbabwe intervened to support Kabila’s regime. A
cease-fire was signed in July 1999 by the DRC, Congolese armed
rebel groups, Angola, Namibia, Rwanda, Uganda, and Zimbabwe but
sporadic fighting continued.
Laurent Kabila was assassinated in January 2001 and his son,
Joseph Kabila, was named head of state. In October 2002, the new
President was successful in negotiating the withdrawal of Rwandan
forces occupying eastern Congo; two months later, the Pretoria
Accord was signed by all remaining warring parties to end the
fighting and establish a government of national unity. A transitional
government was set up in July 2003.
Joseph Kabila as President and four Vice Presidents represented the
former government, former rebel groups, the political opposition,
and civil society. The transitional government held a successful
constitutional referendum in December 2005 and elections for the
presidency, National Assembly, and provincial legislatures in 2006.
The National Assembly was installed in September 2006 and Kabila
was inaugurated president in December 2006. Provincial assemblies
were constituted in early 2007, and elected governors and national
senators in January 2007. The most recent national elections were
held on 28 November 2011.
Population growth is slowly recovering. There has been no census
in the DRC for over 20 years, and given the flight or internal
displacement of much of the population because of years of civil
conflict, there are no reliable population data. The IMF estimates the
population in mid-2007 at 62.6m and the annual growth rate at 3.3%.
This would make the DRC Sub-Saharan Africa’s third most populous
country, after Nigeria and Ethiopia. About half of the total population
is of working age and perhaps 10% are wage-earners. Roughly onethird of the population lives in urban areas.
Life expectancy is slowly improving. After a bloody civil war, which
caused the premature death of 4 – 5 million people, life expectancy is
slowly rising. The World Bank estimated that life expectancy at birth
was 46 years in 2006, up from 41 years in 2001, but still worse than
the 52 years estimated in 1990.
The DRC is ethnically diverse. There are, by some counts, up to 400
ethnic groups in the DRC, although the main four are the Mongo,
Luba, Kongo and Mangbetu-Azande. Ethnic conflict is endemic
in several parts of the country: between the Hema and Lendu
around Bunia in Orientale province, between Congolese Tutsis
(Banyamulenge) and other groups in the Kivus, and between the
Baluba of Kasai and the Lunda of Katanga. Dreamed dremt
2.2 Population growth rate
2.579% (2011 est.)
2.3 Age structures (2011 estimates)
Total percentage
Male
Female
44.4%
16,031,347
15,811,818
15 – 64 years
53%
18,919,942
19,116,204
65 years and
over
2.6%
767,119
1,066,437
0 – 14 years
Source: CIA World Factbook
2.4 Gender ratios (2011 estimates)
Total Population
0.99 male / female
Under 15 years
1.01 male / female
15 – 64 years
0.99 male / female
65 years and over
0.72 male / female
Source: CIA World Factbook
2.5 Life expectancy (2011 estimates)
Total Population
55.74 years
Male
54.28 years
Female
57.23 years
Source: CIA World Factbook
2Population
2.1 Population figures
73,599,190 (July 2012 est.)
Estimates explicitly take into account the effects of excess mortality
due to AIDS. This can result in lower life expectancy, higher infant
mortality, higher death rates, lower population growth rates, and
changes in the distribution of population by age and sex than would
otherwise be expected.
2.6 Ethnic groups
The DRC has up to 400 African ethnic groups of which the majority
are Bantu. The four largest tribes Mongo, Luba, Kongo (all Bantu),
and the Mangbetu-Azande (Hamitic) make up about 45% of the
population.
2.7Religions
• Roman Catholic 50%
• Protestant 20%
• Kimbanguist 10%
• Muslim 10%
• Other (includes syncretic sects and indigenous beliefs) 10%
© 2012 KPMG Services Proprietary Limited, a South African company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss
entity. All rights reserved. MC7204 KPMG and the KPMG logo are registered trademarks of KPMG International Cooperative (“KPMG International”), a Swiss entity. The foregoing information is for general use only. NKC does
not guarantee its accuracy or completeness nor does NKC assume any liability for any loss which may result from the reliance by any person upon such information or opinions.
2
2.8Language
Approximately 700 languages and local dialects are spoken in the
DRC of which French is the official and principal business language.
Four African languages including Swahili in the east, Kikongo in the
area between Kinshasa and the coast, Tshiluba in the south, and
Lingala along the Congo River are also common. English is widely
spoken in Lubumbashi and most foreign companies address the
language barrier through the use of translators.
• French (official)
• Lingala (a lingua franca trade language)
• Kingwana (a dialect of Kiswahili or Swahili)
• Kikongo
• Tshiluba
2.9Education
Access to basic education in the Democratic Republic of Congo
(DRC) remains poor, with up to seven million children across the vast
country out of school – despite a 2010 government decision to make
primary education free.
The DRC is still struggling to overcome the effects of wars that raged
between 1996 and 2003, compounded by continuing violence in the
east of the country and decades of corruption and poor governance.
The seven million figure was contained in the preliminary findings
– reported by the UN Office for the Coordination of Humanitarian
Affairs – of a study conducted by the DRC government with the UK
Department for International Development and the UN Children’s
Fund, UNICEF.
It said 25 percent of the primary school-aged children and 60 percent
of adolescents were not enrolled in classes.
The state education system is in a state of collapse; infrastructure is
dilapidated or non-existent, and teachers infrequently paid and often
absent. Education was officially nationalised in 1972, but the Catholic
Church remains responsible for an estimated 80% of functioning
primary schools and 60% of secondary schools.
2.10Health
There is a high risk of major infectious diseases in the DRC. Food
or waterborne diseases include bacterial and protozoal diarrhea,
hepatitis A, and typhoid fever. Vectorborne diseases include malaria,
plague, and African trypanosomiasis (sleeping sickness). The major
water contact disease is schistosomiasis and the major animal
contact disease is rabies.
The HIV/AIDS prevalence rate in adults is 4.2%. There are
approximately 1.1 million Congolese living with HIV/AIDS.
Many people do not have access to safe water and sanitation, and
waterborne diseases contribute to a low life expectancy in the DRC.
There is no health insurance available in the DRC.
Some regions have poverty levels above 80 % and patients bear
most of their health costs as there is very limited government
support towards healthcare. Western missionaries are a major
source of health care, education, and welfare in the DRC as AIDS,
malaria, and sleeping sickness create major health problems. Child
malnutrition, exacerbated by food shortages and years of warfare in
the DRC, is a chronic problem.
3Economy
The economy of the Democratic Republic of the Congo – a nation
endowed with vast potential wealth – is slowly recovering from
decades of decline. Systemic corruption since independence in 1960
and conflict that began in May 1997 has dramatically reduced national
output and government revenue, increased external debt, and
resulted in the deaths of more than 5 million people from violence,
famine, and disease.
Foreign businesses curtailed operations due to uncertainty about
the outcome of the conflict, lack of infrastructure, and the difficult
operating environment. Conditions began to improve in late 2002
with the withdrawal of a large portion of the invading foreign troops.
The transitional government reopened relations with international
financial institutions and international donors, and President Kabila
began implementing reforms.
Progress has been slow and the International Monetary Fund
curtailed its programme for the DRC at the end of March 2006
because of fiscal overruns. Much economic activity still occurs in the
informal sector and is not reflected in GDP data. Renewed activity
in the mining sector, the source of most export income, boosted
Kinshasa’s fiscal position and GDP growth from 2006-08, however,
the government’s review of mining contracts that began in 2006,
combined with a fall in world market prices for the DRC’’s key mineral
exports temporarily weakened output in 2009, leading to a balance of
payments crisis.
The recovery in mineral prices beginning in mid 2009 boosted
mineral exports, and emergency funds from the IMF boosted foreign
reserves. An uncertain legal framework, corruption, and a lack of
transparency in government policy are long-term problems for the
mining sector and for the economy as a whole.
The global recession cut economic growth in 2009 to less than half
its 2008 level, but growth returned to 6-7% in 2010-11. The DRC
signed a Poverty Reduction and Growth Facility with the IMF in 2009
and received US$12 billion.
3.1 Natural resources
With territory of over 2.34m sq km, the DRC is the largest country
in Sub-Saharan Africa, and it is rich in natural resources. Arable land
covers only 3% of the country’s area, permanent pasture occupies
a further 7%, and roughly three-quarters of the country is forested.
Commercial logging and deforestation has moved more slowly than
in other tropical countries, but its pace is quickening.
Preservation of the DRC’s rainforests is believed to be vital to
countering global warming and to preserving biodiversity: the
country is claimed to be home to 415 species of mammal, 736
species of bird and about 11,000 plant species. As well as forest,
natural resources include bountiful fresh water, particularly from the
Congo River, oil and numerous minerals.
The main minerals are copper, cobalt, zinc, diamonds and columbotantalite (coltan). Cadmium, cassiterite (tin ore), gold, silver,
wolframite (tungsten ore) and uranium (at least until 2004) are
mined on a smaller scale. Most mining of base metals takes place in
Katanga. Most diamond production is in the Kasai provinces. Smallerscale production occurs in Equateur, and near Kisangani in Orientale
province. Coltan and cassiterite have become important exports in
Maniema, and North and South Kivu. There are vast gold deposits
– said to be the richest undeveloped gold deposits in Africa – in the
Kilomoto concessions of Orientale province and around Twangiza in
South Kivu.
© 2012 KPMG Services Proprietary Limited, a South African company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss
entity. All rights reserved. MC7204 KPMG and the KPMG logo are registered trademarks of KPMG International Cooperative (“KPMG International”), a Swiss entity. The foregoing information is for general use only. NKC does
not guarantee its accuracy or completeness nor does NKC assume any liability for any loss which may result from the reliance by any person upon such information or opinions.
3
3.1 Latest Economic indicators
2010
1 Qtr
Prices
Consumer prices (2005=100)
Consumer prices (% change, year on year)
Coffee, wholesale prices, US (US cents/lb)
Copper wholesale prices, LME (US$/tonne)
Financial indicators
Exchange rate FC:US$ (av)
Exchange rate FC:US$ (end-period)
Main policy interest rate (end period; %)
Deposit rate (av; %)
Lending rate (av; %)
Money market rate (av; %)
M1 (end-period; FC bn)
M1 (% change, year on year)
M2 (end-period; FC bn)
M2 (% change, year on year)
Sectoral trends, production
Diamonds ('000 carats)
Crude oil ('000 barrels/day)
Cobalt (tonnes)
Copper in concentrates (tonnes)
Timber (cu metres)
Foreign trade (US$ m)
Exports fob
Imports fob
Trade balance
Foreign reserves (US$ m)
Reserves excl gold (end-period)
2 Qtr
2011
3 Qtr
4 Qtr
1 Qtr
2 Qtr
3 Qtr
4 Qtr
263.8
38.9
68.4
7,234
273.8
26.3
66
7,025
276
21.7
83.1
7,261
284.6
9.1
90.5
8,620
286.8
8.7
109.5
9,632
n/a
n/a
119.1
9,119
n/a
n/a
110.3
9,020
n/a
n/a
97.9
7,471
911
902
60
20.7
70.1
60
454
23
1,553
40.3
900
903
42
18.3
65.7
42
518
31.7
1,592
46.1
904
901
22
16.7
45.7
22
593
44.2
1,756
36.4
910
915
22
12
44.7
22
706
47.2
1,965
30.8
922
922
29.5
13
47.1
30
609
34.1
2,018
29.9
923
923
29.5
12
45
30
670
29.2
2,234
40.4
922
921
29.5
14
42
30
641
8.1
2,218
26.4
899
911
20
14.7
40.9
20
796
12.8
2,435
23.9
4,029
23.9
18,621
164,852
32,658
4,267
23.1
16,942
116,364
107,011
2,767
23.5
29,815
132,958
40,072
5,738
23.5
32,312
83,364
48,738
4,717
23.5
27,077
115,056
54,173
4,812
24
26,271
119,923
54,238
4,883
23.4
26,644
130,892
54,246
4,893
23.4
30,457
151,774
54,245
1,097
954
143.4
1,196
1,047
148.9
1,197
1,111
86.5
1,233
1,111
122.1
1,488
1,117
370.3
1,417
1,293
124.1
1,518
1,472
45.8
1,581.0
1,423.6
157.4
1,019
1,082
1,200
1,297
838
837
710
726
Sources: IMF, International Financial Statistics; Direction of Trade Statistics; World Bureau of Metal Statistics, World Metal Statistics; Banque centrale du Congo, Note de conjoncture; Condense d’informations
statistiques.”
3.3 Two year forecast
2010 (a)
2011 (b)
2012 (c)
2013 (c)
Real GDP growth
7.1
6.9
6.3
7
Gross fixed investment growth
10
13
12
14
Consumer price inflation (av)
23.5
15.5
13.5
12
Lending rate
56.5
43.8
30
30
1.6
-1.5
-4.4
-3.5
Government balance (% of GDP)
Exports of goods fob (US$ m)
8,477
10,931
11,420
12,562
Imports of goods fob (US$ m)
-8,043
-9,021
-9,137
-9,777
Current-account balance (US$ m)
-2,043
-679
-418
-142
Current-account balance (% of GDP)
-15.7
-4.1
-2.1
-0.6
Total foreign debt (year-end; US$ m)
13,138
14,819
15,196
15,724
Exchange rate FC:US$ (av)
912
899
910
900
Exchange rate FC:¥100 (av)
1,039
1,127
1,126
1,048
Exchange rate FC:€ (av)
1,210
1,251
1,188
1,161
Exchange rate FC:SDR (av)
1,399
1,431
1,410
1,380
a) Actual; b) Economist Intelligence Unit estimates; c) Economist Intelligence Unit forecasts
© 2012 KPMG Services Proprietary Limited, a South African company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss
entity. All rights reserved. MC7204 KPMG and the KPMG logo are registered trademarks of KPMG International Cooperative (“KPMG International”), a Swiss entity. The foregoing information is for general use only. NKC does
not guarantee its accuracy or completeness nor does NKC assume any liability for any loss which may result from the reliance by any person upon such information or opinions.
4
• Foreign Affairs and International Co-operation:
Raymond Tshibanda
• Health: Felix Kabange Numbi
• Higher Education: Chelo Lotsima
• Hydrocarbons: Crispin Atama
• Hydropower and Electricity: Bruno Kapanji Kalala
• Industry and Small and Medium Enterprises: Remy Musungayi
• Infrastructure and Public Works: Fridolin Kasweshi Musoka
• Interior, Security and Decentralisation: Richard Muyej
• Justice and Human Rights: Wivine Mumba
• Land Affairs: Robert Mbuinga Bila
4Government and Politics
4.1 Political structure
Official name
République démocratique du Congo
Form of state
Unitary republic based on the 2005 constitution
National legislature
An elected National Assembly of 500 seats was installed in February
2012; a 108-seat Senate was elected by the provincial assemblies on
January 19th 2006.
National elections
The last presidential and legislative elections were held on 28
November 2011. The incumbent president, Joseph Kabila, won
a disputed presidential poll and a pro-president majority was
maintained in the National Assembly; senatorial elections planned for
early 2013.
• Media, Relations with Parliament and Citizenship: Lambert Mende
• Mines: Martin Kabwelulu
• Planning: Celestin Vunabandi
• Posts, Telecommunications and New Technologies: Kin-Kiey
Mulumba
• Public Sector: Jean-Claude Kibala
• Social Affairs: Charles Nawej
• State Enterprises: Louise Munga Mesozi
• Transport and Communications: Justin Kalumba
• Central Bank Governor: Jean-Claude Masangu Mulango
4.2 International organisation participation
• ACCT
• ACP
• AfDB
• AU
• CEPGL
• COMESA
• FAO
• G-24
• G-77
• IAEA
• IBRD
• ICAO
Head of State
The Head of State is Joseph Kabila.
• ICCt
• ICRM
• IDA
• IFAD
• IFC
• IFRCS
National government
Appointed on 28 April 2012; its members from parties in the proKabila alliance, Majorité présidentielle (MP).
• IHO (suspended)
• ILO
• IMF
• IMO
• Interpol
• IOC
• IOM
• IPU
• ISO
• ITSO
• ITU
• ITUC
• MIGA
• NAM
• OIF
• OPCW
• PCA
• SADC
• UN
• UNCTAD
• UNESCO
• UNHCR
• UNIDO
• UNWTO
• UPU
• WCL
• WCO
• WFTU
• WHO
• WIPO
• WMO
• WTO
Main political parties
There are 20 parties represented in the new government, but the
Parti du peuple pour la reconstruction et la démocratie (PPRD),
Mr. Kabila’s party, dominates with eight ministers; Mouvement
social pour le renouveau (MSR) has three ministries, and the Parti
lumumbiste unifié (Palu) two; the main opposition parties are the
Union pour la démocratie et le progrès social (UDPS), Mouvement
de libération du Congo (MLC) and Union pour la nation congolaise
(UNC).
Key ministers
• Prime Minister: Augustin Matata Ponyo
• Budget: Daniel Mukoko Samba
• Defence: Alexandre Luba Tamu
• Agriculture and Rural Development: Jean-Chrysostome Vahamwiti
• Economy and Trade: Jean-Paul Nemoyato
• Education: Maker Mwangu
• Employment, Labour and Social Security:
Modeste Bahati Lukwebo
• Environment, Conservation and Tourism: Louis Bavon Mputu
• Finance (minister delegate): Patrick Kitebi Kibol
© 2012 KPMG Services Proprietary Limited, a South African company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss
entity. All rights reserved. MC7204 KPMG and the KPMG logo are registered trademarks of KPMG International Cooperative (“KPMG International”), a Swiss entity. The foregoing information is for general use only. NKC does
not guarantee its accuracy or completeness nor does NKC assume any liability for any loss which may result from the reliance by any person upon such information or opinions.
5
5Transport and
Communications
Technologically, the DRC is far behind the rest of the continent mainly
due to the prevailing impact of years of mismanagement and conflict.
Transport infrastructure has been hugely neglected since
independence, and most of it is worse now than it was then. Road
and rail networks and capacity have both shrunk over the past 48
years, and although there are more internal flights today than at
independence, the country has a poor record of air safety.
The government has plans to spend billions of dollars on the road
and rail network, if the loans can be secured from Chinese banks.
Telecoms have been transformed in the past ten years. Landlines
are rare or non-existent, but mobile-phone coverage has grown
dramatically, and is set to continue to do so. Internet usage, however,
remains very low, and this will not change until fibre-optic cable
replaces the current dependence on satellite communications.
5.1Railways
The once extensive railway system has shrunk to a rump service,
mostly concentrated in Katanga, for the export of minerals via Zambia
to the South African port of Durban. The line between Lubumbashi
and Kindu in Maniema province was severed during the civil war of
the 1990s. It reopened only in 2007, but track repairs are urgently
needed, and only one train runs per month. Another line links
Lubumbashi to Ilebo in Kasai Occidental. At Ilebo, cargo was formerly
transferred to barges which travel down the Kasai and Congo rivers
to Kinshasa, although this link now functions only sporadically.
Part of the proposed Chinese loan will be used to restore the railway
system, including the line from Kolwezi in Katanga to Dilolo on the
border with Angola, where it will link up with the Benguela railway
which runs to Lobito on the Angolan coast. The railway, which is the
shortest route from Katanga to the coast, functioned during colonial
times but ceased operations during the civil war.
5.2Roads
Despite the vastness of the country, only 2,500 km of roads are
tarred, and most are in poor condition. Barely any new road has
been constructed since independence. Since 2001 the World Bank
has supported a programme to rehabilitate existing major roads,
and the government hopes that Chinese money will finance further
rehabilitation and expansion of the road network, including upgrading
the road linking Kisangani in Orientale province with Kasumbalesa in
southern Katanga, the main frontier post with Zambia.
5.3Ports
The Congo River and its tributaries are open to navigation over long
distances, although the stretch between Kinshasa and the Atlantic
Ocean is blocked by a series of rapids. There are irregular and often
dangerous passenger and freight services between Kinshasa and
Kisangani, for which new vessels are urgently required. There is also
vigorous trade between Kinshasa and Brazzaville, which lies just
across the Congo River.
There are around 50 private air transport companies, most with
aircraft and air crews from the former Soviet Union. The national
airline, Hewa Bora, was established through the merger of two other
state companies and is a joint venture with the privately owned
Congo Air Lines (CAL). Hewa Bora operates domestic flights as well
as flights to Johannesburg, but has been banned from EU airspace.
Air France flies between Kinshasa and Paris, and SN Air Brussels
between Kinshasa and Belgium. There are flights to a number of
African destinations throughout Africa, including Nairobi (Kenya
Airways); Addis Ababa (Ethiopian Airways); Luanda (TAAG); and
Johannesburg (South African Airways).
The UN mission in the DRC operates regular scheduled services to
the major cities in the country.
5.5Telecommunications
In 2008 there were estimated to be just 8,000 functioning fixed
lines in the country, but over 6.3m mobile phones in operation.
Landline use appears to be in terminal decline, but mobile-phone
use is growing steadily, and operators believe that there is a potential
market of over 30m subscribers.
There are five main operating companies: Vodacom and Celtel are
the market leaders. Average revenue per user is US$10 – 15/month,
similar to Nigeria. An important constraint to future growth is the
absence of a national fibre-optic network, or a connection to the
South Atlantic-3/West Africa Submarine Cable (SAT-3/WASC), which
forces operators to rely on satellites only.
The 2002 telecoms law is vague on the division of powers between
the national post and telecoms company, the Office congolais des
postes et télécommunications, and the new regulatory authority, the
Autorité de régulation de la poste et télécommunication du Congo,
resulting in a struggle between the two institutions to the detriment
of the overall regulation of the sector. Among the pressing issues
to be resolved are which companies should build the fibre-optic
network and link to SAT-3/WASC, the auctioning of the 3G (thirdgeneration) spectrum, and overcrowding on the 900-mhz frequency.
There are several local Internet service providers, but overall national
Internet usage, particularly outside the capital, is very low.
5.6Internet
The development of the internet in the DRC has been hampered
by the continuing lack of a viable fixed network infrastructure and
the low penetration of PCs. Internet access in the main centres of
the country is largely achieved through wireless technology notably
CDMA and GSM.
The most common method of achieving access has been through
the various cyber cafés that have emerged in the cities. The current
user base in the DRC is estimated to be between 60,000 and 70,000.
However, the ISPs in the DRC appear to be seeking ways of best
fast tracking the growth of the internet in the DRC with the recent
announcement that three ISPs had initiated the Congo Exchange
Point. The point will be a default route to be optimised at a later stage.
The country’s main port is Matadi, around 150 km up the Congo
River from the Atlantic. The port’s infrastructure is in a state of
disrepair, although this is improving slowly. Administrative delays and
bureaucratic obstruction remain serious obstacles to traffic. Matadi is
linked to Kinshasa by rail, but the service is slow and unreliable. The
250-km road between Kinshasa and Matadi is still in poor condition,
despite funding from the EU and World Bank for its repair. There is a
smaller port, Boma, further downriver.
5.4 Air transport
Because of the poor state of ground transport, the long distances
involved and insecurity in much of the country, air transport is
much used for both freight and passengers. However, air traffic is
ineffectively regulated, aircraft are often not airworthy, and there have
been several air crashes in recent years.
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entity. All rights reserved. MC7204 KPMG and the KPMG logo are registered trademarks of KPMG International Cooperative (“KPMG International”), a Swiss entity. The foregoing information is for general use only. NKC does
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6
6SWOT analysis of the DRC 7Investing in the DRC
The SWOT analysis below highlights the various factors impacting
the DRC in becoming a successful economy.
Strengths
Weaknesses
• Centrally located within Africa easily accessible from RSA
• Poor infrastructure and
telecommunications
• Rich in minerals and natural
resources
• Poor level of education
• International funder support
• Inadequate legislative
environment
• Language barriers
• Environmental deterioration
7.1 Openness to foreign investment
The Democratic Republic of Congo (DRC) remains a highly
challenging environment in which to conduct business. At the
same time, the DRC’s rich endowment of natural resources, large
population (approximately 71 million) and generally open trading
system provide significant potential opportunities for investors.
The DRC was ranked 178 out of 183 in the 2012 World Bank’s
Doing Business Report, a slight decrease from the 2011 report.
Performance registered by the DRC in a number of indicators is
summarised in the table below (Millennium Challenge Corporation
(MCC) indicators are measured on a scale of 0% to 100%. The MCC
indicators are percentile rankings of the DRC in its low income
group):
• Weak economy (high inflation/
weak currency)
Measure
Year
Index / ranking
• Cash-based, informal economy
TI Corruption Index
2011
168 out of 182
countries
• Commercial agriculture nonexistent
Heritage Economic Freedom
2011
172 out of 179
countries
• Industrial sector not developed
to full potential
World Bank Doing Business
2012
178 out of 183
countries
• Reliant on imports as no strong
local industry
MCC Government
Effectiveness
FY 2012
5%
• No investment policy, other than
mining
MCC Rule of Law
FY 2012
5%
MCC Control of Corruption
FY 2012
7%
MCC Fiscal Policy
FY 2012
51%
MCC Trade Policy
FY 2012
29%
FY 2012
8%
• Difficulty in gaining information
(accessibility/availability)
No.
Procedure
MCC Regulatory Quality
• Hydro-electric potential
development of the Congo river
• Fragile political environment –
but improved and improving
MCC Business Start Up
FY 2012
0%
MCC Land Rights Access
FY 2012
26%
• Mining industry not developed
to its full potential
• Ethnical tension
MCC Natural Resource
Mgmt
FY 2012
63%
• “Social factors may impede
development (human rights
violations, health, education,
Development of skills and labour
poverty, etc.)
force
• Corruption and malMining supplying countries
administration of legal
entering DRC
processes
Development of agricultural and
• Significant foreign debt
industrial sectors
• High price tags pertaining to
Leveraging of foreign
partner/management placement
investment
• Development of mining industry
•
•
•
•
• Skills transfers opportunities,
enlargement of talent-pool
• Influence of China and their
continuous investment into DRC
Underdeveloped infrastructure, inadequate contract enforcement,
limited access to credit, continued insecurity in the eastern part of
the DRC, lack of adequate property rights protection, and high levels
of both bureaucracy and corruption continue to constrain private
sector development. Corruption and mismanagement have driven
much activity into the informal sector.
Since its first democratic elections in 2006, the DRC has made
progress, albeit slowly, in addressing the country’s significant
political, economic, and social challenges. Congolese investment
regulations, codified in the Investment Code, do not discriminate
against foreign investors, except in some specific cases dealing
with labour and related taxes. However, foreign investors, like local
businesses, often face harassment and subjective, opportunistic
interpretation of regulatory and taxation policies.
To overcome hurdles and to simplify and facilitate investment, the
GDRC created a one-stop agency called the National Agency for
Investment Promotion (ANAPI). This agency uses Investment Code
provisions to simplify new investments and to make procedures
more transparent. With support from international donors, the
GDRC is also working to implement a series of reforms aimed at
improving the business climate. Specifically, in August 2009, the
GDRC launched the Steering Committee for the Improvement of
Business and Investment Climate (CPCAI) under the Ministry of Plan
to improve the GDRC’s ranking on the World Bank’s Doing Business
report. The main objectives of CPCAI are to reduce red tape,
decrease delays and the cost of establishing a business, improve
transparency of procedures, and strengthen judicial security. The
committee also plans to amend the current law on trade courts and
to develop new legislation on competitiveness in business. CPCAI
has reduced the amount of time required to publish the status of
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7
companies in the Official Journal to 48 hours and has also reduced
the cost of obtaining a national identification number, two steps
required to start business operations in the DRC.
Other measures undertaken by the GDRC to improve the business
and investment climate include a 2010 revision of the customs law
and a 2010 law ordering the creation of a value-added tax (VAT) that
entered into effect January 1, 2012. The new customs code took
effect on 20 February 2011. The new VAT, which took effect on 1
January 2012, assesses a rate of 16 percent on goods and services.
While the VAT will increase collection of fiscal revenues and improve
transparency and the investment climate, businesses fear that it
could lead to price inflation, since it applies to all goods and services,
including goods that were previously exempted. The Ministry of
Finance conducted several public awareness campaigns on the
new VAT and the Directorate General of Taxes (DGI) has published
on its website a list of those subject to the VAT. While these are all
important, positive steps, there remain concerns over transparency
in awarding and enforcement of contracts and concessions,
particularly in the extractive industries.
Broadly, there are no formal limits or screening mechanisms imposed
upon foreign ownership of most businesses in the DRC. However,
the processes of granting permits and licenses in the mining and
telecommunication sectors often suffer from arbitrariness, lack of
transparency, and corruption.
Investment projects which benefit from Investment Code incentives
must have an assessment control completed by ANAPI agents every
six months. Small businesses are subject to presidential decrees
number 79-021 of August 2, 1979 and number 90-046 of August
8, 1990, which prohibit foreign investors from engaging in retail
commerce. The government defines a small businesses as follows:
• Traditional companies that do not employ more than 10
employees
• Small transportation carriers that do not have more than 10
vehicles which do not weigh more than 7 tons
• Restaurants which have a maximum of three employees and do
not have more than 20 seats
• Small hotels
• Small shops or kiosks
All investors in the DRC face multiple audits by various government
enforcement agencies seeking evidence of violations of tax
laws or price controls. Foreigners and Congolese alike suffer the
consequences of non-functional judicial institutions. Inadequate
physical infrastructure presents a serious challenge and additional
cost for nearly all commercial operators in the DRC.
International donors and a 2009 multi-billion dollar Sino-Congolese
agreement have begun to provide critically needed resources for
infrastructure development, but significant constraints persist.
Restructuring of approximately 60 Congolese parastatals, none
of which are profitable, continues slowly. These parastatals
include the national power utility (SNEL), port and river authority
(ONATRA), national airline (LAC) and rail company (SNCC). The
GDRC acknowledges the need for reform and the Portfolio Ministry
continues to work to improve the situation. The government and
state-owned Societe Nationale d’Electricite (SNEL) have begun to
open the energy sector to private investment.
The global financial crisis had a dramatic impact on the DRC’s
economic environment in late 2008 and throughout 2009. The
mining sector significantly contracted due to falling international
commodities prices, a tightening of international credit, and
dampened investor confidence in the sector. With the support of
international emergency assistance and improved prices for key
export commodities, the DRC’s macroeconomic situation has
stabilised and the economy has recovered significantly. Mining
activity in copper and cobalt is very strong, and there is ongoing
industrial exploration of significant gold deposits.
The IMF’s Executive Board approved a new three-year Extended
Credit Facility (formally the Poverty Reduction and Growth Facility)
in December 2009. The DRC reached the Heavily Indebted Poor
Country (HIPC) completion point for debt relief in 2010, following a
determination by the IMF and World Bank boards that the DRC had
successfully implemented policy measures under the programme.
As a result, the DRC has received forgiveness of US $12.3 billion
in sovereign debt, freeing critically needed resources for poverty
reduction programs. Several bilateral debt cancellations with the
DRC occurred in 2011 for a total of US$ 4.7 billion.
One trend of note in recent years is the propagation of so-called
“vulture fund” legal actions against the DRC government for
recuperation of decades-old unpaid private debts owed by DRC
parastatal companies. These legal actions have sought to sequester
and redirect profits and other payments owed by private multinational
companies to DRC public enterprises through joint venture projects,
including mining joint ventures. These “vulture fund” legal actions
add uncertainty to the investment climate, especially for private
multinational companies which are in joint ventures with DRC public
enterprises.
7.2 Conversion and transfer policies
The DRC adopted a free-floating exchange policy in 2001 as part of
the implementation of broader economic reforms. The DRC has also
lifted restrictions on business transactions nationwide. International
transfers of funds take place freely when sent through a local
commercial bank. The bank declaration requirement and payments
for international transfers now take less than one week to complete,
on average.
The Central Bank is responsible for regulating foreign exchange and
trade. The only currency restriction imposed on travellers is a US$
10,000 limit on the amount an individual can carry when entering
or leaving the DRC. The GDRC also requires that the Central Bank
license exporters and importers. The DRC’s parallel foreign exchange
market is large and tolerated by the government. The largest
banknote in circulation is the 500 Congolese franc note (worth
approximately 50¢). The DRC’s economy remains highly dollarised.
Exchange regulations forbid banks from providing loans that exceed
5% of their assets. Banks are permitted to provide investors with
financing without a mortgage, if the investor has a good business
relationship with his or her bank. The Central Bank is currently
working on implementing a modernized payment system in the DRC
that would allow businesses to use different kinds of payment tools.
The DRC’s currency, the Congolese Franc, depreciated by 35%
against the U.S. dollar between December 2008 and September
2009 but has stabilised as overall macroeconomic conditions have
improved.
International reserves hit a historically low level of US$30 million in
February 2009, but significantly increased throughout the remainder
of 2009 and 2010 due to emergency financial assistance from several
international donors, the arrival of the first tranche of a signing bonus
under the Sino-Congolese minerals-infrastructure agreement, the
DRC’s drawing on the IMF’s Special Drawing Rights (SDR) allocation
and ensuing debt relief received after the DRC reached the HIPC
completion point. As of November 2011, the DRC held US$1.4 billion
in international reserves.
7.3 Expropriation and compensation
The DRC’s land law allows for expropriation of property by the
government for the sake of public interest, such as the protection of
community heritage, completing public works (such as infrastructure
projects) and the presence of precious minerals. The illegitimate
acquisition of property is also grounds for expropriation. In any case
of expropriation, the GDRC is required to offer fair compensation; as
with many Congolese laws, these requirements are not always fully
respected. Activities that have an impact on the environment, such
as mining, energy and forestry are at greater risk for expropriation.
In October 2010, the GDRC completed a lengthy review of 61 mining
contracts dating from 1997-2002 between DRC public enterprises
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8
and private companies. The review, initiated in 2007, faced numerous
delays and criticism over its lack of transparency. In October 2011, the
IMF and the World Bank criticised two August 2011 mining contracts
that the GDRC concluded without prior adherence to transparency
principles. As a result the IMF refused to conclude its fourth review
of the DRC under the PEG 2 (the DRC Government’s Economic
Programme) until the GDRC addresses these issues. According to a
November 2011 British Parliamentarian’s report, questionable sales
of mines and oil assets owned by public enterprises have cost the
DRC treasury more than US$5.5 billion over the past four years.
A recent review of concessions in the forestry sector aimed at
cleaning-up corruption resulted in the cancellation of a significant
number of timber logging contracts. In January 2011, the GDRC
announced the conclusion of the logging sector concession review
process. The GDRC determined that 80 of the 156 logging contracts
were eligible to be converted into new logging concession contracts.
The GDRC required that the companies holding these 80 contracts
submit a project management plan by the end of 2011 and address
corporate social responsibility (CSR) issues. The GDRC cancelled the
other 76 contracts, which it did not convert.
The GDRC continues to work with civil society, local communities
and logging companies on implementation of post-conversion
requirements. The forestry sector conversion process has been
largely successful in addressing many concerns for the sector.
Nevertheless, the forestry sector has encountered numerous
problems, including the lack of enforcement of forestry laws and the
marginalization of local communities by logging companies.
7.4 Dispute settlement
The U.S.-DRC Bilateral Investment Treaty (BIT) provides for
International Centre for Settlement of Investment Disputes (ICSID)
reconciliation or binding arbitration in the case of investment
disputes.
The DRC is not a Party to the New York Convention of 1958 on the
Recognition and Enforcement of Foreign Arbitral Awards. On paper,
the DRC’s official policies are satisfactory and even attractive to
business, but in recent years they have often been inoperative in
practice due to problems with the judicial system.
Courts are marked by a high degree of corruption, public
administration is not reliable, and both expatriates and nationals
are subject to selective application of a complex legal code. Official
channels often do not provide direct and transparent recourse in
the event of property seizure, for which legal standing can rarely be
determined. Seizures have been made via the police and/or military,
often supported by questionable decisions from the courts. Foreign
enterprises may have slightly better security of ownership due to
the presence and intervention of their diplomatic missions. Many
Congolese business contracts provide for external arbitration, but
this is an expensive and time-consuming option with little value for
resolving routine, day-to-day business problems.
In 2008, the DRC established commercial courts in Kinshasa and
Lubumbashi for the first time, with additional commercial courts
scheduled to be established shortly in the remaining DRC provinces.
These courts are slated to be led by professional judges with
expertise in commercial matters and may assist investors to address
commercial claims within an otherwise inadequate judicial system.
The DRC is poised to join OHADA (Organization for the
Harmonization of Business Laws); the DRC Parliament passed the
required legislation for OHADA accession in December 2009 and
President Kabila promulgated the law in February 2010. The core
purpose of OHADA is to promote economic development and
integration between its members, as well as to ensure a secure
commercial environment in Africa. OHADA members agree to adopt
a common set of commercial laws – including contract, company
and bankruptcy laws – and to submit interpretation of those laws to
the final jurisdiction of the OHADA court, which sits in Abidjan in the
Ivory Coast. The government officially launched the National OHADA
Commission in April 2010.
7.5 Performance requirements and incentives
The DRC has not maintained any measures that are inconsistent
with the WTO’s TRIMs requirements. The 2002 Investment Code is
a simplified and improved version of its predecessor. Although there
are no specific performance requirements for foreign investors,
there are investment conditions that must be discussed and agreed
upon with the DRC investment agency, ANAPI, to assure equitable
treatment and procedures for all qualified foreign investments. The
DRC has shortened this agreement procedure to approximately
30 days, and has created a number of incentives to attract foreign
investment to the country. Pro-business incentives range from tax
breaks to duty exemptions granted for three to five years, and are
dependent upon the location and type of enterprise, the number of
jobs created, the extent of training and promotion of local staff, and
the export-producing potential of the operation.
Investors who wish to take advantage of customs and tax incentives
of the new 2002 Investment Code must apply to ANAPI, who will in
turn submit their applications to the Ministries of Finance and Plan for
approval. A Congolese business conglomerate and two Congolese
breweries have taken advantage of these incentives. The Ministry of
Labour controls expatriate residence and work permits. There is no
requirement that investors purchase from local sources or export a
certain percentage of output.
Performance requirements agreed upon initially with ANAPI include
a timeframe for the investment, the use of Congolese accounting
procedures and periodic authorized GDRC audits, the protection
of the environment, periodic progress reports to ANAPI, and the
maintenance of international and local norms for the provision of
goods and services. The investor must also agree that all imported
equipment and capital will remain in place for at least five years.
There is no discriminatory or excessively onerous visa, residence
or work permit requirement designed to prevent or discourage
foreigners from investing in the DRC, though corruption and
bureaucracy can create delays in obtaining necessary permits. In
2008, the GDRC passed a resolution to abolish four burdensome
requirements for establishing a company in the DRC, including the
civil servant attestation, resident’s certification, a document with
the company seal on it, and a police background check certification.
ANAPI and the Congolese Chamber of Commerce (FEC) play a vital
role in addressing business issues in the DRC.
According to the terms of the Investment Code, the GDRC may
require compliance with an investment agreement within 30 days
of notification. Continued violations of an agreement may result in
sanctions, including repayment of benefits received (such as tax
exemptions) and eventual nullification of the agreement.
Foreign investors may bid on government contracts on the same
terms as domestic investors. Foreign firms may even be favoured
in the bidding process because they can more easily access and
present international insurance funding guarantees. There is no
discrimination against foreign firms in participating in governmentsponsored or subsidised research and development programmes,
since participation is done on a national treatment basis. With the
sponsorship and technical assistance of the World Bank, a tender
board now works under the supervision of the Ministry of Budget.
Normally, however, public companies and/or parastatals do not
participate in the bidding process, due to the financing guarantees
required beforehand. In addition, contracts are often negotiated
directly with the GDRC, not through an international tender process,
thus reducing transparency.
Parliament passed a new procurement law in April 2010 and the
GDRC has also adopted key implementing steps, institutions, and a
manual of procedures to implement the new procurement law.
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9
7.6 Right to private ownership and establishment
The DRC’s Constitution (chapter 2, articles 34-40) protects private
ownership without discrimination between foreign and domestic
investors. It also protects investments against takeover, unless
the investment conflicts with some overriding public interest. In
this case, there are legal provisions for equitable and appropriate
compensation for the parties involved.
Foreign investors can operate in the DRC either through establishing
a branch or local subsidiary. The individual business may either be
designated a “Société en Commodite Simple” (SNC), a “Société
Privée à Responsabilité Limité (SPRL), a “Société par Actions à
Responsabilité Limité (SARL), or a “Société Cooperative.” The most
common adopted forms of establishment are the SPRL and SARL,
which are both limited liability companies. While in an SPRL shares
are not freely negotiable, SARL shares are freely negotiable in
principle, unless there are particular arrangements already within
the SARL. Incorporation of an SARL requires a minimum of seven
shareholders. Furthermore, incorporation of an SARL requires
authorisation of the Head of State. The Ministry of Justice is entitled
to receive 1% of the original stock invested in the business by its
founders. Some sectors, including mining, insurance, and banking,
have different procedures for creating a company.
The GDRC has restricted one category of small businesses to
Congolese nationals. This covers artisanal production sector
activities, small retail commerce, small public transport firms,
small restaurants, and hotels with fewer than ten beds. Despite
GDRC restrictions, some foreign-owned small retailers, particularly
Chinese-owned stores, have recently appeared on the market.
7.7 Protection of property rights
Despite attempts to enforce existing legal provisions, protection
of property rights remains weak and dependent upon a currently
dysfunctional public administration and judicial system. Some seniorlevel officials are making efforts to restore and improve the legal and
administrative frameworks, but the challenge remains to implement
these changes at a practical level.
Ownership interest in movable properties (e.g. equipment, vehicles,
etc.) is secured and registered through the Ministry of the Interior’s
Office of the Notary. Real estate property (e.g. buildings and land)
is secured and registered at the Ministry of Land’s Office of the
Mortgage Registrar.
The GDRC continues to undertake efforts to improve legislation
in regards to Intellectual Property Rights (IPR) and build capacity
to improve implementation and enforcement. In principle, IPR are
legally protected in the DRC, but enforcement of IPR regulations
is virtually non-existent. The DRC’s legal system and public
administration do not have the capacity to enforce intellectual
property regulations.
The country is a signatory to a number of international agreements
with organisations such as the World Intellectual Property
Organisation (WIPO), and the Paris Convention for the Protection of
Intellectual Properties, which protects trademarks and patents.
The DRC is also a member of the Berne Convention that protects
copyrights, artistic works, and literary rights. The maximum
protection that these conventions provide is 20 years for patents
and 20 years, renewable, for trademarks, beginning from the date of
registration. If it is not used within three years, a trademark can be
cancelled. The DRC has not yet signed the WIPO Internet Treaties.
In July 2011, the Ministry of Culture and Art established the Sociéte
des Droits d’Auteur et des Droits Voisins (SOCODA) to address IPR
issues faced by authors. The Ministry of Culture in collaboration
with SOCODA has presented a law to the government that seeks to
rectify the flaws of the existing 1986 IPR law. The law is still pending
Parliamentary approval.
7.8 Transparency of the regulatory system
Implementing a transparent regulatory system is still a challenge in
the DRC. The GDRC is making some effort to improve the situation,
including through appropriate legislation enacted by the parliament,
but is still far from securing a complete legal and regulatory
framework for the orderly conduct of business and the protection
of investment. The GDRC authority on business standards, the
Congolese Office of Control (OCC), oversees participation by foreign
businesses.
There are no formal or informal provisions by any private or public
structure, in any business-related environment, used to impede
foreign investment. Problems encountered within the GDRC tend
to be administrative and/or bureaucratic in nature since reforms and
improved laws and regulations are often poorly or unevenly applied.
Proposed laws and regulations are not published in draft format
for public discussion and comments. Normally the only discussion
occurs within the governmental or administrative entity that drafts
them and at the parliament prior to a vote. The Congolese public, as
well as foreign and domestic investors, do not receive an adequate
opportunity to discuss or comment on these proposals.
In 2008, the DRC became a candidate country for the Extractive
Industries Transparency Initiative (EITI), a multi-stakeholder effort to
increase transparency in transactions between governments and
companies in the extractive industries. The GDRC has taken some
positive steps under EITI, including establishment of a National EITI
Committee, publication of the first report on EITI in the DRC, and
the hiring of an independent auditor to carry out the validation of
the EITI process. However, the DRC did not meet its March 9, 2010
validation deadline. The EITI Secretariat granted the DRC a six-month
extension (until September 9, 2010) to complete the validation.
The independent auditor subsequently validated the report, and
the National EITI Committee approved and transmitted it to the
International EITI Secretariat in Berlin on September 8, 2010.
The validation of the first EITI report was hailed as an important
step towards improving transparency and accountability in DRC’s
management of natural resources. On December 14, 2010, the
EITI Board designated the DRC as an EITI Candidate Country
that is “close to compliant” and gave the DRC six months (until
June 12, 2011) to complete the remaining steps in order to
achieve “compliant” status. However, the DRC did not meet its
requirements. The EITI Secretariat has given the DRC an 18-month
extension until March 2013 by which it must become compliant or
withdraw from EITI consideration.
7.9 Efficient capital markets and portfolio investment
Economic growth in the DRC since 2002 has increased the flow
of money in the finished goods and raw materials market. Credit
markets are also becoming more active, mainly in the commercial
project and medium-term project sectors. All economic operators,
foreign and domestic, have access to credit markets in the DRC
without discrimination, as long as they can provide credible
guarantees. Foreign investors, though, are more likely to benefit
from this type of credit, since they are able to provide guarantees and
collateral secured by foreign banks.
The commercial banking system has undergone a full reorganisation
and continues to expand. Strengthened supervision of the
commercial banking sector, including improving the regulatory
framework for the financial sector, is a component of DRC’s formal
IMF programme. However, the commercial banking sector remains
small. With the exception of Kinshasa, Bas-Congo and Katanga,
the remaining DRC provinces do not have adequate banking
coverage. As of 2011, there were 20 commercial banks, two
specialised financial institutions, one savings bank, one hundred
twenty co-operative banks, thirty –four financial agencies, twelve
exchange offices and nineteen micro-finance institutions, with a
total of 800,000 accounts. Another two banks are in the process of
becoming commercial banks.
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entity. All rights reserved. MC7204 KPMG and the KPMG logo are registered trademarks of KPMG International Cooperative (“KPMG International”), a Swiss entity. The foregoing information is for general use only. NKC does
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10
The volume of deposits increased from US$ 835 million in 2008 to
US$ 1 billion in 2011. The overall balance sheets of the DRC banking
system increased from US$ 1.9 billion in September 2009 to US$ 2.3
billion in December 2010, an increase of 21 percent.
The Development Fund is managed by Local Management
Committee composed of a representative of the concessionaire and
at least five elected representatives of the local community (ies) and/
or the indigenous people.
Commercial banks generally provide loans to individuals in amounts
not to exceed six months of their salary. Portfolio investment is not
yet developed in the DRC. Business practices in the DRC are still at a
fairly rudimentary level. Cross-shareholding and stable shareholding
arrangements are not common in the DRC. There are occasional
complaints about unfair competition between investors in profitable
sectors such as mining and telecommunications.
7.12Political violence
The DRC has suffered bouts of civil unrest and conflict for many
years. Large-scale military looting in 1991 and 1993, for example,
resulted in significant loss of economic productive capacity and flight
of foreign investors. In addition, widespread looting and destruction
associated with wars in the DRC from 1996-1997 and from 19982003 further damaged Congolese economic activity.
7.10Competition from state-owned enterprises (SOEs)
The GDRC, with support from international donors, continues
to work to reform state-owned enterprises (SOEs). To boost
the efficiency of SOEs, many of which have been plagued by
years of mismanagement, Prime Minister Adolph Muzito signed
five ministerial decrees in April 2009. The decrees focused on
transforming these SOEs into profitable commercial companies,
public establishments (which would be autonomous from any
ministry) and public services (which are directly tied to a particular
ministry). Some SOEs would be dissolved. SOEs that have been
targeted for reform include those operating in the mining, energy,
industry, transport, telecommunications and finance sectors. The
government and state-owned Société Nationale d’Electricité (SNEL)
have begun to open the energy sector to private investment.
The country’s first democratic elections in more than 40 years took
place in 2006 and established national and provincial governments.
National presidential and legislative elections took place on 28
November 2011. The National Electoral Commission (CENI) declared
and the Supreme Court certified the incumbent President Kabila
as the winner of the presidential elections, although local and
international observers reported that the elections lacked credibility
due to widespread irregularities, logistical problems, and a lack of
transparency. Provincial and local elections are scheduled to take
place in 2012 and 2013.
In December 2010, the GDRC changed the legal status of 20
SOEs from parastatal companies to commercial entities. These 20
companies are now subject to the law governing private investments
and provisions of OHADA. The next step in the privatisation
process for these 20 companies is for the GDRC to evaluate and
determine their real capital shares. The government remains the only
shareholder in all 20 of these companies.
7.11Corporate social responsibility
Awareness about Corporate Social Responsibility (CSR) is growing,
though largely among the large, multinational investors in the
DRC, many of whom have formal CSR programmes. The GDRC
requires that mining, oil, and logging companies comply with CSR
obligations before beginning operations. Under the Mining Code of
2002, mining companies are required to submit an environmental
impact statement. Mining companies are also required to support
infrastructure projects, such as roads, schools and hospitals.
CSR provisions are also included in the 2002 Forestry Code, which
requires forestry concessionaires to support social and physical
infrastructure projects in the communities in which they operate.
CSR is also reflected in the sustainable use of forestry resources.
In November 2009, the Ministry of Environment, Conservation
of Nature and Tourism held a workshop to analyse and propose
procedures for local communities to share benefits from logging
concessions. Participants at the workshop agreed on key principles
that may guide the implementation of corporate social responsibility
within the DRC forestry sector, including a social agreement that
engages reciprocally both sides (the timber concession companies
and the local communities) and payment by timber concession
companies that would be made at two levels (construction of
socioeconomic infrastructure on a per cubic meter of harvested
timber basis and in-kind payment for actions of common interest).
The local community would collaborate with concessionaires to fight
against illegal logging and wildlife poaching and also participate in
the sustainable management of forest resources. These principles
were incorporated in a Ministerial Decree signed by the Minister
of Environment, Conservation of Nature and Tourism in June 2010,
which specifies the social responsibility requirements in a forestry
concession contract. The Decree mandates the establishment of a
Development Fund to finance the construction of socioeconomic
infrastructure with the payment of US$ 2 to US$ 5 per cubic meter of
harvested timber, depending on the tree species.
The United Nations has one of the largest peacekeeping operations
in the world in the DRC. Known by its French acronym of MONUSCO,
it has around 18,000 peacekeepers deployed in the country –
primarily in the east. Violence nevertheless persists in the Eastern
DRC due to the presence of several foreign armed groups and local
militias, some of which have been loosely integrated into the Armed
Forces.
Sporadic outbreaks continue to occur in North Kivu, South Kivu,
and northern Katanga provinces, as well as the Ituri and Haut-Uele
districts of Orientale province. A lengthy military campaign against
the Lord’s Resistance Army in Haut Uele has diminished its strength
and operational capability, but small units of the group operate in and
transit the north-eastern DRC, terrorizing the local population.
The DRC military has conducted a series of operations against
the Democratic Forces for the Liberation of Rwanda (FDLR) since
January 2009; these are continuing in both Kivu provinces.
In addition to continuing instability in the eastern DRC, strikes by civil
servants and teachers over salary and benefit issues have occurred
and continue to pose a potential source of social upheaval. Military
and police personnel remain poorly paid and trained. Often police
and other public servants strike or resort to petty corruption after not
receiving salaries for some time.
7.13Corruption
The Mobutu regime created a culture of corruption in the DRC during
more than 30 years of rule. This ingrained culture permeated the
private, public, administrative, and business environments and has
been difficult to root out. The DRC was ranked 168 out of 182 nations
on Transparency International’s 2011 Corruption Perception Index.
In principle, there are legal provisions to fight and sanction corruption.
The DRC is not a signatory to the UN Anti-Corruption Convention.
However, the DRC did pass its own anti-corruption law in 2004.
Additional legislation includes the 2004 Money Laundering Act,
under which the DRC cooperates with African and European crimefighting organisations. Despite these reform efforts, however, bribery
is still routine in public and private business transactions, especially
in the areas of government procurement, dispute settlement, and
taxation.
The DRC is not a signatory of the OECD Convention on Combating
Bribery. In September 2007, the DRC ratified the protocol agreement
with SADC (Southern African Development Community) on Fighting
Corruption. The GDRC is also preparing to ratify the African Union
Convention on the Prevention and Fighting of Corruption. The DRC’s
eventual accession to OHADA will also address corruption issues.
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11
The law calls for imprisonment and fines for both parties to the
bribery no matter the circumstances. However, law enforcement
remains a challenge in this area.
In October 2002, the DRC passed a law establishing an Observatory
for the Code of Professional Ethics, which promotes ethical
behaviour among civil servants in the workplace. The Congolese
Court of Accounts and the Congolese Anti-Corruption League NGO
(in French, “La Ligue Congolaise de Lutte contre la Corruption”) are
also entities that work closely on corruption matters in the DRC.
In order to enforce anti-corruption laws among civil servants and
members of the government, in September 2009, President Kabila
launched a “zero-tolerance” campaign. Within this framework, he
established the DRC Financial Intelligence Unit to combat money
laundering and misappropriation of public funds. In March 2011, the
DRC co-founded the International Anti-Corruption Academy (IACA),
which aims to identify shortcomings in the fight against corruption.
IACA currently offers standardized and tailor-made training sessions
and is scheduled to offer academic degree programmes in 2012.
7.14Bilateral investment treaties
The U.S, Germany, France, Belgium, Italy, South Korea, and China
(PRC) have signed bilateral investment agreements with the DRC.
South Africa and India will conclude a bilateral investment agreement
with the DRC shortly. Lebanon, Ivory Coast, and Burkina Faso have
negotiated, but not yet signed, bilateral investment treaties with the
DRC.
7.15OPIC and other investment insurance programmes
Since the establishment of the transitional government in June 2003,
OPIC has granted three political risk insurance contracts in 2004,
another in 2005, and is currently reviewing additional applications
by American-owned companies. In March 2006, the DRC signed an
accord with OPIC that will expedite the process of obtaining political
risk insurance and financing.
The DRC is a member of the World Bank’s Multilateral Investment
Guarantee Agency (MIGA), which offers insurance on new
foreign investments to protect against foreign exchange losses,
expropriation, and civil unrest. The GDRC is negotiating now for
complete resumption of the MIGA programme, which would allow
for investment insurance in other sectors of the economy. The DRC
is also a member of the African Trade Insurance Agency, which also
provides political risk insurance.
In FY 2011, USAID launched new USG Development Credit Authority
(DCA) loan guarantee agreements with two commercial banks
operating in the DRC to help catalyse the availability of credit in
the agricultural and small enterprise sectors. The DCA portfolio
loan guarantee with one commercial bank in partnership with a
large American mining company created a facility for leveraging
up to US$5 million to promote access to credit for small and micro
enterprises (SMEs) throughout Katanga Province. In addition, USAID
established a second DCA with a commercial bank operating in the
DRC. This DCA will promote lending to micro, small and medium
enterprises in the agriculture sector nationwide throughout the
agricultural value chain.
7.16Labour
The DRC’s large urban population provides a ready pool of available
labour, including a significant number of high school and university
graduates, a few of whom have studied at American universities.
Employers cannot, however, take diplomas at face value. Skilled
industrial labour is in short supply and must usually be trained by
individual companies.
The 2002 Labour Code modified the country’s labour legislation,
which is in compliance with the conventions and recommendations
of the International Labour Organisation. The code provides for tight
control of labour practices and regulates recruitment, contracts, the
employment of women and children, and general working conditions.
Strict labour laws can make termination of employees difficult.
The code also provides for equal pay for equal work without regard
to origin, sex, or age. The code formally permits a woman to gain
employment outside of her home without her husband’s permission.
Employers must cover medical and accident expenses. Larger firms
are required to have medical staff and facilities on site, with the
obligations increasing with the number of employees. Mandated
medical benefits are a major cost for most firms. Employers must
provide family allowances based on the number of children, and
paid holidays and annual vacations, based on the years of service.
Employers must also provide daily transportation for their workers or
pay an allowance in areas served by public transportation.
Outside the major cities, large companies often assist by providing
infrastructure, such as roads, schools and hospitals. Many labour
regulations have been only sporadically enforced in recent years.
The Ministry of Labour must grant permission for staff reductions.
Generous pensions and severance packages are required by the
labour code.
Every foreign employee must apply for a work permit from the
National Committee of Employment of Foreigners within the Ministry
of Labour. The right to strike is recognised and the law provides for
reconciliation procedures in cases where the government is not
involved.
7.17Foreign trade zones / free ports
The DRC does not have any areas designated as free trade zones or
have any free ports. The DRC is a member of the Southern African
Development Community (SADC) and the Common Market of
Eastern and Southern Africa (COMESA), but has not yet joined
either the COMESA or SADC free trade areas (FTAs). The Ministry
of Finance has already given funding to the Eastern and Southern
African Trade and Development Bank (PTA) to approve the DRC as
the beneficiary of the bank. PTA would compensate for loss of DRC
customs revenues when the DRC becomes an effective member of
the COMESA FTA.
7.18Foreign Direct Investment statistics
Obtaining reliable statistical data on foreign direct investment (FDI)
in the DRC remains a challenge. In order to alleviate this problem, the
DRC Secretariat General of Trade, with assistance from the European
Union, is undertaking a project to establish a Centre for Research and
Analysis of Commercial Statistics. There are currently two sources
of information on FDI in the DRC: the Central Bank (BCC) and the
National Agency for Investment Promotion (ANAPI).
BCC statistics are based on funds reported to the bank from actual
investment projects underway, and are more accurate than those of
ANAPI. These figures, however, may not capture all FDI flowing in the
DRC; therefore, the quality of the BCC data is undetermined. Actual
FDI amounts are probably higher than the BCC figures shown here.
For the last four years, BCC has published the following totals:
The GDRC sets regional minimum wages for all workers in private
enterprise, with the highest pay scales applied in the cities of
Kinshasa and Lubumbashi. Wages have not kept pace with the DRC’s
rate of inflation. While most foreign employers pay higher wages than
the official minimum wage, the average Congolese worker has had to
cope with falling real wages for over a decade.
© 2012 KPMG Services Proprietary Limited, a South African company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss
entity. All rights reserved. MC7204 KPMG and the KPMG logo are registered trademarks of KPMG International Cooperative (“KPMG International”), a Swiss entity. The foregoing information is for general use only. NKC does
not guarantee its accuracy or completeness nor does NKC assume any liability for any loss which may result from the reliance by any person upon such information or opinions.
12
FDI (in US$ million)
Year
FDI in the DRC
DRC Investment
Abroad
Net FDI
2007
1,808.00
14.30
1,793.70
2008
1,726.80
54.10
1,672.70
2009
663.80
34.80
629
2010
2,939.30
7.20
2,932.10
ANAPI estimated that actual FDI in DRC as of October 2011 stood at:
US$2.965 billion. ANAPI added that the United States is the largest
investor in the DRC
7.19Step-by-step procedures for opening a business in the
DRC
No. Procedure
Time
1.
Obtain a certificate
confirming headquarters
location
7 days
CDF 1000
2.
Notarize the articles of
association
14 days
US$ 53 per
document,
assuming 5
documents
3.
Register with the Commercial 5 days
Registry
US$ 120
for the
registry
and US$
40 to
deposit the
document
4.
Publication of the company’s
statutes in the official journal
1day (receipt
only)
CDF 300
per line
5.
Obtain a national
identification number from
the Ministry of Economy
15 days
US$50
6.
Register the company for tax
with the Direction Générale
des Impots
7 days
No charge
7.
Declare the establishment
of the company with the
Inspectorate of Labour
(l’Inspection du Travail)
and the National Office
of Employment (l’Office
National de l’ Emploi)
1 day
No charge
8.
Receive inspection by the
inspection officials from the
Ministry of Labour
1 day
No charge
9.
Register with the National
Institute for Social Security
7 days
No charge
10.
Obtain operational permit
from the Municipality
7 days
US$ 250
for each
permit
The following ANAPI-registered data are obtained from proposals
by potential foreign investors. They summarise approved projects in
services, the manufacturing sector, the food sector, pharmaceuticals,
forestry and agriculture, and infrastructure.
FDI (in USD million)
Services
2007
2008 2009
813
1,365 1,739
Infrastructure
113 265
Food
99 143
2010 2011
512 1,334
2,023 93
139
Beverages/
Brewery*
Pharmaceuticals
33
Agriculture/Forestry
Manufacturing
Total
246 40
323 30
54
261 331
618 518
867
2,084 2,551
3,615 1,975
* The amount of FDI in Beverages/Brewery is included in the
“Manufacturing” category in the table above. According to ANAPI,
the Beverage and Brewery Sector since October 2010 contains
US$844,200 in FDI.
In 2010, infrastructure dominated FDI in the DRC (accounting for
55% of the total). President Kabila’s five-year programme, known
as the five pillars or “cinq chantiers” in French, which focuses on
five priority areas (infrastructure; employment; education; water/
electricity; and health) was the main impetus behind this dominance
of infrastructure.
© 2012 KPMG Services Proprietary Limited, a South African company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss
entity. All rights reserved. MC7204 KPMG and the KPMG logo are registered trademarks of KPMG International Cooperative (“KPMG International”), a Swiss entity. The foregoing information is for general use only. NKC does
not guarantee its accuracy or completeness nor does NKC assume any liability for any loss which may result from the reliance by any person upon such information or opinions.
Cost
13
8Country Outlook: 2012 –
2016
8.1Overview
The President of the Democratic Republic of Congo (DRC), Joseph
Kabila, has appointed the former Finance Minister, Augustin
Matata Ponyo, as the new Prime Minister. The President has called
for the arrest of General Bosco Ntaganda, who is wanted by the
International Criminal Court (ICC) for war crimes. Mr. Ponyo has
outlined his government’s economic policies, aiming for 15% GDP
growth by 2016, twice the current growth rate. A new agriculture
law has rattled investors, as it says that land may only be owned by
Congolese nationals.
A World Bank report highlights how poor public finance management
has caused ministries to consistently fail to meet their spending
targets; meanwhile, the presidency and Prime Minister’s office
have spent far over their budgeted allocations. The EU has signed
aid agreements worth US$251m with the government, primarily
directed to road works.
8.2 Domestic politics
Mr. Kabila named Mr. Ponyo as his new Prime Minister on 18 April
2012. Mr. Ponyo is a member of Mr. Kabila’s Parti du peuple pour
la reconstruction et la démocratie (PPRD). As finance minister in
the previous government he played a key role in improving the
DRC’s relations with its international donors. His appointment as
Prime Minister marks a break from recent tradition, in which the
premiership has been given to the largest party other than the
PPRD within the Majorité présidentielle, a pro-Kabila coalition in the
parliament.
The Prime Minister announced his new government on 28 April,
retaining power over the country’s public finances. His former
adviser, Patrick Kitebi Kibol, will, as Minister Delegate, be in charge
of the day-to-day workings of the finance ministry while the Prime
Minister will oversee the formulation of economic policy and
implementation of reforms.
Intense fighting between armed rebel groups and the national army
in North Kivu province has erupted, with hundreds killed and tens of
thousands displaced since the beginning of April. The latest uprising
comes after three years of relative stability in the region, and began
after a visit to North Kivu by Mr. Kabila in early April, during which
he indicated a willingness to have General Ntaganda arrested and
tried in a Congolese court for war crimes. General Ntaganda is the
leader of the predominantly Tutsi Congrès national pour la défense
du peuple (CNDP), a militia/political party, which was integrated into
the national army, Forces armées de la République démocratique
du Congo, as part of a peace agreement in 2009. Despite the
integration, parallel command structures have persisted and Mr.
Kabila’s announcement led to the desertion of many soldiers loyal
to General Ntaganda and the CNDP, who subsequently engaged
in heavy fighting with government forces. Previously, the arrest
of General Ntaganda, who is also wanted by the ICC in The Hague
(Netherlands) for war crimes, has always been refused by the
Congolese government, which, until recently, has seen him as a key
part of the fragile 2009 peace deal.
8.3 International relations
Relations with Angola remain tense, mainly because of a dispute
between the two countries over their maritime borders and offshore
oil. The DRC has a strong claim to offshore oilfields currently being
exploited by Angola, but it is doubtful that Angola, which is much
stronger militarily, will surrender lucrative oil blocks voluntarily.
There are conflict issues with Uganda: oil rights in Lake Albert;
the activities of Ugandan rebel groups in North Kivu and Orientale
provinces; and Ugandan involvement in the trade in gold and other
minerals mined illegally on Congolese territory.
China’s involvement with the DRC continues to grow. China takes
nearly half the country’s exports, up from around one-tenth in 2005:
80% of mineral-processing plants in Katanga are owned by Chinese
companies and more than 90% of the province’s minerals go to
China. The DRC and China are also planning greatly increased military
co-operation, which may cause anxiety among the DRC’s neighbours
in Central Africa.
8.4 Policy trends
Mr. Ponyo outlined the broad contours of his economic programme
for 2012-16 during his first speech in the National Assembly. He said
that he would focus on improving the country’s business climate,
including the reduction of the country’s high trade taxes. The Prime
Minister said that his aim was to raise annual GDP growth from the
current rate of around 7% to 15% by 2016, and ensure that the added
growth boosted job creation. Focus will also be on reducing poverty
through investments in water and electricity supply, education,
access to health, and infrastructure. According to the Prime
Minister, US$48bn will be needed to finance the economic
programme until 2016.
Although he has worked closely for years with the Bank and the IMF,
Mr. Ponyo has been careful since becoming the Prime Minister to
reassure the President and his allies that he will not follow the policy
prescriptions of these organisations unless their advice conforms
to the regime’s objectives. The Fund has publicly signalled that it is
ready to work with the new administration, and Mr. Ponyo’s good
relations with international donors and creditors is likely to facilitate
the government’s efforts to mobilise funds and credits for its
economic programme.
The country’s Chamber of Commerce, Fédération des entreprises
du Congo (FEC), wrote to the government in March to protest a
new law on agriculture, passed in the Assembly in December 2011.
The law, which is due to come into effect in June 2012, is aimed
at increasing investment in agriculture in the DRC through tax
breaks and preferential rates on water and electricity for agricultural
enterprises. However, a provision stating that farms must be owned
by a person of Congolese nationality or a company that is majorityowned by Congolese nationals is likely to deter new investment.
The FEC called the new law a catastrophe and the clause has rattled
investors; there are already reports of several potential investments
being abandoned. Although it created uncertainty in the sector, the
President supported the controversial clause, arguing that it was
necessary to defend national sovereignty. Meanwhile, farmers’
organisations criticised the law, saying that it created uncertainty of
tenure for many famers who lack land titles and have inherited their
lands without any official documents. The attempt to nationalise
land fits poorly with the new Prime Minister’s objective to improve
the business climate and could scare off much-needed foreign
investment.
© 2012 KPMG Services Proprietary Limited, a South African company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss
entity. All rights reserved. MC7204 KPMG and the KPMG logo are registered trademarks of KPMG International Cooperative (“KPMG International”), a Swiss entity. The foregoing information is for general use only. NKC does
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14
8.5 Economic growth
In mid-April the Bank released a comprehensive analysis of the
country’s economy spanning 20 years. The study noted important
economic progress during the last decade and predicted average
GDP growth of 7% in 2012-13, but said that the positive impact
of rising commodity prices, which boost exports and generate
increased international interest in the country’s mining sector,
was heavily mitigated by a failure to address key infrastructure
bottlenecks, particularly in transport, water and electricity. It also
criticised the country for its failure to reform state-owned enterprises
that are a drain on fiscal resources, distort competition and deter
foreign investment in many key sectors. The Bank also highlighted
the inability of the state to maintain and productively use the existing
infrastructure, generally due to poor management practice, a
patrimonial polity and entrenched corruption in the public sector.
The Bank study shows that executed budgets for ministries were
consistently lower than the approved budgets during 2008-10, with
many ministries spending less than half their budget allocation. Little
appears to have improved in 2011 when, overall, the government
spent only 46% of its budgeted spending according to official
figures. The presidency and the Prime Minister’s office, meanwhile,
exceeded their allocated budgets by 144% and 76% respectively.
This partly reflects unrealistic budgeting and partly inefficient
spending procedures, marred by corruption and lack of monitoring.
The fact that the authorities, particularly the presidency and the
Prime Minister’s office, often resort to extra-budgetary spending
through a separate mechanism for urgent expenditure, which is not
subject to parliamentary approval, makes public spending even less
transparent. The low budget execution also affects public investment,
particularly crucial spending on infrastructure, as capital expenditure
is easier to postpone than current spending such as salaries and
transport costs.
In 2011 only 7% of the government’s investment budget was actually
spent. Improving budget monitoring and transparency of state
accounts will be important first steps to improving budget execution
and efficiency of public spending.
8.6 External account
Foreign donors have been reluctant to grant significant new loans
or aid agreements following last year’s presidential and legislative
elections, which were marred by widespread irregularities and
deemed unfair by most international observers. The EU recently said
that the vote was not credible. Nevertheless, in mid-March the EU
and Mr. Ponyo, the then Minister of Finance, signed five agreements
worth €186.2m (US$251m) for a range of projects focused on
infrastructure, health and forest protection. The vast majority of the
funds (€103.4m) will go towards the rehabilitation of around 150 km
of road on the route linking the provinces of Kinshasa (the capital),
Bas-Congo, Bandundu and Kasai Occidental. The completion of the
project will enable all-season travel from Kinshasa to Kananga, part of
the country’s main highway connecting the capital with the mineralrich Katanga province. Part of the funds will finance the rehabilitation
of the urban road network in the eastern city of Goma.
The DRC was the lowest-ranked country in the UN’s 2011 Human
Development Index, and donors are likely to continue to finance
projects aimed at reducing poverty and improving economic
management, but remain reluctant to contribute much directly to the
budget.
AAppendix – sources of
information
• Economist Intelligence Unit
• CIA World Factbook
• Bloomberg
• World Bank
• Doingbusiness.org
• US State Government
© 2012 KPMG Services Proprietary Limited, a South African company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss
entity. All rights reserved. MC7204 KPMG and the KPMG logo are registered trademarks of KPMG International Cooperative (“KPMG International”), a Swiss entity. The foregoing information is for general use only. NKC does
not guarantee its accuracy or completeness nor does NKC assume any liability for any loss which may result from the reliance by any person upon such information or opinions.
15