Guidance

Overseas Business Risk for DRC

Published 13 October 2023

1. General overview

DRC’s economy has vast potential. DRC has large areas of arable land, favourable agroclimatic conditions, massive mineral resources, forestry assets, hydro potential large enough to power most of Sub-Saharan Africa, and a young population. Despite this high economic, human, and agricultural potential, DRC remains one of the poorest countries in Africa.

DRC is projected to have around 70 million people living in absolute poverty by 2025 and is significantly off-track to meet the Sustainable Development Goals, with the public purse falling far short of what is needed to deliver basic services, a challenge compounded by a rapidly growing population that sees the addition of 3 million people every year.

Mineral extraction has dictated DRC’s growth performance for decades and includes minerals critical to the global energy transition. DRC accounts for over 50% of global cobalt reserves and approximately 70% of the world’s supply. DRC is, with Peru, the second largest producer of copper in the world, producing 2.2 million tonnes in 2022. It also has some of the highest quality reserves.

It possesses the world’s largest hard rock lithium deposit and some of the richest deposits of coltan. DRC’s mining exports play a critical role in its macro-stability, accounting for 99% of goods exports in 2020, almost 30% of GDP and an estimated 30% of government revenues. This high dependence renders the economy vulnerable to external shocks.

2. UK-DRC trade and investment

Economic links between the UK and DRC and UK company engagement in DRC are limited. This is due to:

• a combination of limited historical and language links
• an extremely difficult business environment that impedes companies bound by the UK Bribery Act
• relatively recent recognition of DRC’s wealth in minerals critical to the global energy transition
• some of the highest import and export transaction costs in Africa

Following the UK’s exit from the EU, DRC has retained access to tariff free, quota free trade under the Everything but Arms arrangement.

Total trade in goods and services (exports plus imports) between the UK and DRC was £698 million in 2022. Exports to DRC amounted to £121 million, of which £75 million were services, while imports from DRC amounted to £577 million, of which £374 million were services ^{[footnote 1]}. In 2021, the outward stock of FDI from the UK in DRC was £1 million. Data on inward FDI from DRC was unavailable but is likely to be negligible.

The top 5 goods exported to DRC were:

• plastics in primary forms (£7.4 million)
• cars (£6.6 million)
• beverages (£6.2 million)
• road vehicles other than cars (capital) (£4.6 million)
• toilet & cleansing preparations (£3.2 million)

The top 5 goods imported from DRC were:

• crude oil (£203 million)
• wood & cork (£180,000)
• coffee, tea, cocoa etc (£170,000)
• toilet & cleansing preparations (£110,000)
• scientific instruments (capital) (£70,000)

DRC is a member of the East African Community (EAC). A UK-Kenya Economic Partnership Agreement (EPA) was struck in December 2020. This deal recognises the importance of the wider region, and the agreement is open for other members of the East African Community to join.

3. Politics

Elections will take place in DRC for all levels of government in December 2023. President Felix Tshisekedi will run for a second term. Among civil society and opposition groups there are concerns of bias within the Electoral Commission and that these elections could be subject to fraud or serious irregularities. DRC’s political and democratic transition is continuing but progress remains fragile. Political instability could lead to civil unrest, particularly around the election period.

DRC gained independence from Belgium in 1960. This was followed by 30 years of dictatorship under President Mobutu, the two Congo wars and a long period of government by two generations of the Kabila family. Following a 2002 peace agreement, the first elections since independence were held under a new constitution in 2006. Elections in 2006 and 2011 were both won by Joseph Kabila but the elections in 2011 lacked credibility.

Elections due in 2016 were delayed by two years for party political reasons. Elections eventually held in 2018 led to a power-sharing deal between now ex-President Kabila and Felix Tshisekedi. This was DRC’s first peaceful transition of power but the result was not seen as democractic.

In late 2020, Tshisekedi ended his agreement with Kabila and formed the Union Sacrée pour la Nation (USN), a coalition of political parties that formed a new government in April 2021.

While DRC’s political scene includes over 600 political parties, political influence is concentrated among key national and local players. The media suffer from low levels of press freedom (ranked 124 out of 180 on Reporters Without Borders’ 2023 index). DRC’s at least 4,000 civil society organisations (CSOs) are a major force in advocacy and service delivery.

A widespread network of grassroots organisations are often, in remote or insecure areas, the last resort for delivering basic services. While there do exist influential regional and national networks of membership organisations, CSOs often operate without substantial funding, financial and managerial capacity, or country-wide organisation.

4. Conflict

DRC has been a post-conflict state for nearly 10 years but is dealing with a resurgence of armed groups, notably in the east. In March 2022, the armed group M23 re-emerged in eastern Congo, adding to the numerous armed groups already active in the area. This includes the group Forces Démocratiques pour la Libération du Rwanda (FDLR), whose members include Rwandese Hutu forces responsible for the 1994 Rwandan genocide, as well as a variety of other (Congolese) ethnic militia. The overall security situation deteriorated in 2022.

The root causes of conflict in DRC include communal, ethnic, land and natural resources exploitation issues. Conflict has produced one of the world’s largest and most protracted humanitarian crises and forced displacement of populations, aggravated existing human development needs, and undermined DRC’s transition to a genuine multi-party democracy.

5. Economics

At an estimated $64 billion in 2022, DRC’s economy performs well below potential, given the country’s resources and potential. This includes large areas of fertile land, favourable agroclimatic conditions, vast mineral resources, forestry assets, hydro, solar and wind potential large enough to power large parts of Sub-Saharan Africa, and a young population. Economic wealth is generally concentrated in the hands of the politically connected and small elite. 70% of people are in poverty, a number that has barely moved in the last 5 years.

Mineral extraction has dictated DRC’s growth performance for decades and includes minerals critical to the global energy transition. DRC accounts for approximately 70% of the world’s supply of cobalt and is the largest producer of copper in Africa (6% of global production). DRC’s extractives accounted for 99% of goods exports in 2021, almost 30% of GDP and an estimated 30% of government revenues. This high dependence renders the economy vulnerable to external shocks.

China is a dominant player in DRC’s economy with strong presence in its cobalt and copper sectors as well as in infrastructure and construction. Chinese-funded firms account for two thirds of DRC’s copper production and roughly half of its cobalt production. Almost all of DRC’s cobalt ores, concentrates and metal are bought by China. China also accounts for 70% of global refined cobalt production, giving it significant control over the critical mineral supply chain.

DRC has one of the most difficult business environments in the world; it is ranked 183 out of 190 countries in the Doing Business Indicators. Rules and regulatory frameworks are often constructed in order to offer opportunities for extracting payments. Corruption, illegal taxes, lack of access to finance and electricity, weak property rights, and conflict are the main drivers of the poor business environment. The effect is that value addition outside the extractives sector is very limited, with implications for job prospects. Membership of trade agreements including the EAC has so far failed to yield significant economic gains.

Limited economic diversification and low levels of investment means much of the population remain subsistence farmers and food insecurity remain high. Agriculture is the primary means of living for 70-75% of the population, and 80% of DRC’s agriculture is subsistence-based and predominantly managed by women. Agriculture comprises approximately 20% of GDP and productivity remains one of the lowest in the region.

6. Business and Human Rights

DRC is a UK Human Rights Priority Country due to concerns about the prevalence of human rights violations and abuses across the country. These include massacres, kidnappings, sexual violence and recruitment of children. There are an estimated 407,000 people in modern slavery in DRC (Global Slavery Index 2023).

DRC is signatory to various international and regional legal frameworks for the protection of women’s and girl’s rights. However, these frameworks have limited impact as laws are not well disseminated, and are rarely and subjectively enforced. Women and girls face discrimination that affects their employment and economic rights. They tend to be overly represented in informal, poorly renumerated jobs. Women and girls bear the brunt of care and domestic work.

Girls that are economically deprived, single mothers or lack education or employment opportunities, may be forced into marriage. The economic exclusion of women plays out differently in different regional and sub-regional contexts. In the south east, some cultural norms and practices explicitly disadvantage women, for example in term of land ownership and inheritance rights. In Katanga and the greater Kasai region, where mining constitutes an important activity, specific groups of women are particularly marginalised, such as women engaged in small trade and sex work around and in mining communities, women engaged in artisanal mining, transborder workers, and women in indigenous communities.

The law prohibits private, public, and semi-public companies from discriminating against qualified candidates based on disability. Despite this, many people with disabilities find it difficult to access formal jobs.

Other populations, including indigenous people, LGBTQIA+ communities, mine workers and people who use drugs also face exclusion and discrimination.

DRC has reported extensive child and bonded labour in copper and cobalt artisanal mine sites. DRC signed up to the Extractives Industries Transparency Initiative (EITI) in 2007, therefore committing to disclose information along the extractive industry value chain. In 2017, DRC established the Agency for the Prevention and Fight against Human Trafficking and the National Strategy and Action Plan to Combat Child Labour in Artisanal Mining. In May 2023, DRC became a member of the Voluntary Principles Initiative (VPI), thereby signing up to a set of principles that guide companies on providing security for their operations while protecting human rights. Implementation to date of these initiatives has been limited.

7. Bribery and corruption

Bribery is illegal. It is an offence for British nationals or someone who is ordinarily resident in the UK, a body incorporated in the UK or a Scottish partnership, to bribe anywhere in the world. In addition, a commercial organisation carrying on a business in the UK can be liable for the conduct of a person who is neither a UK national or resident in the UK or a body incorporated or formed in the UK. In this case, it does not matter whether the acts or omissions which form part of the offence take place in the UK or elsewhere. For more, read the information provided on our Bribery and corruption page.

The Tshisekedi government has used public prosecutions of high-level officials and the creation of an anti-corruption unit to improve DRC’s reputation on corruption. However, in the 2022 Transparency International Corruption Perceptions Index DRC scored 169/200, with little change since 2012, reflecting the endemic and deep rooted corruption in the country.

DRC is a signatory to the UN Anticorruption Convention and has ratified a protocol agreement with the Southern African Development Community (SADC) on Fighting Corruption. NGOs such as the group “The Congo is Not for Sale,” have an important role in revealing corrupt practices, and the law protects NGOs in a whistle-blower role.

Formal cross sector research is lacking but anecdotally business-government corruption is widespread and companies frequently encounter demands for bribes and informal payments in order to ‘get things done’. Bribery is likely to be asked throughout all phases of conducting business. Public procurement in DRC suffers from corruption amongst officials, and there are examples of bribery, single sourcing and other methods of gaining concessions and contracts without equal competition.

DRC was placed under increased monitoring (grey listing) by the Financial Action Task Force in October 2022, which means there are risks of money laundering, financial fraud and terrorism financing. Taxation treatment may also be a corruption risk and it is important to check what the formal tax requirements are before entering into business, as there are examples of companies being required to pay taxes which may not be legitimate.

8. Terrorism threat

See the Foreign, Commonwealth & Development Office (FCDO) Travel Advice for DRC for the latest information on terrorism threats.

9. Protective security advice

Visitors to DRC should always check our latest FCDO safety and security advice before travelling, bearing in mind any specific threats affecting the areas of the country you intend to visit. The FCDO advises against travel to several areas of the country. Before considering any travel to areas to which the FCDO advises against all or all but essential travel, you should take professional security advice.

FCDO advises against all travel:

• to the provinces of Kasaï Oriental, Haut-Uele, Haut Lomami, Ituri, North Kivu. South Kivu (except the city of Bukavu - see below), Maniema and Tanganyika in eastern DRC
• within 50km of the border with the Central African Republic and South Sudan

The FCDO advises against all but essential travel to:

• the city of Bukavu in South Kivu province
• the districts of N’djili and Kimbanseke in Kinshasa, both of which are south of the main access road to N’djili airport (located in Nsele district)
• the provinces of Kasaï and Kasaï Central
• the territory of Kwamouth (located in Mai-Ndombe province)
• the city of Goma in North Kivu province

While British government staff do visit areas of eastern DRC, they are not always in the area, and as with anywhere outside of Kinshasa the British Embassy’s ability to offer consular assistance is severely limited.

Foreign nationals have been detained or had their passports seized by local authorities following commercial disputes. You should be cautious when dealing with commercial disputes and seek legal advice. Foreign nationals have also been detained or had passports seized as a result of immigration offences.

Foreigners can be perceived as being wealthier than locals and may be at particular risk of kidnap for financial gain. There is a small but increasing threat of criminal “express” kidnap in DRC. There have been incidents in the first 3 months of 2023 of foreigners being targeted by individuals impersonating police in the Limete area of Kinshasa. Kidnaps are generally for financial gain or motivated by criminality.

Some gangs use girls to lure people into traps; others promise cut-price gold and diamonds, or pose as police or security forces. There remains a risk of arbitrary arrests of foreigners by security authorities who demand payment for release.

Visitors to DRC are advised to follow news reports and be alert to developments that might trigger civil unrest, as violence can erupt quickly and without warning. If you are working in DRC, you should follow your employer’s local security guidelines. You should also regularly check FCDO Travel Advice or register for email updates whilst in country.

10. Intellectual Property

Intellectual Property (IP) rights are territorial, that is, they only give protection in the countries where they are granted or registered. If you are thinking about trading internationally, then you should consider registering your IP rights in your export markets.

DRC’s IP protection stems from laws enacted in 1982 and 1986. DRC is a signatory to a range of IP-related multilateral treaties, including agreements with the World Intellectual Property Organisation and the World Trade Organisation, and is subject to the agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). DRC is also signatory to a number of Regional Economic Integration treaties that cover IP issues.

Congolese legislative action as regards intellectual property ceased in 1986 and there is still no legislation that does justice to DRC’s international obligations. Enforcement of the laws and agreements that do exist are likely to be weak due to a lack of resources.

11. Organised crime

Armed groups are especially prevalent in DRC’s eastern provinces, with more than 100 active in North and South Kivu alone. These groups are thought to engage in civilian attacks and various forms of organised crime. Urban crime gangs have also proliferated in the major cities. The level of corruption is high and state-embedded actors are involved in organised crime. Foreign criminal gangs operate alongside local actors to facilitate the trafficking of drugs, arms and wildlife, coupled with fraudulent activities in the banking sector.

Conflict and instability in governance are driven by the competition for control over the country’s vast natural resources, particularly in the eastern provinces. DRC is assessed as one of the most fragile states in the world and vulnerable to conflict. Although anti-corruption frameworks are in place, implementation and enforcement are weak.

DRC is party to a number of international treaties pertaining to organised crime. The country has legislated against organised crime, it has aimed to implement the Rome Statute and it has introduced a strategy against wildlife crimes. Regulations have also tightened in the extractive industries. However, the implementation of these laws is very poor and extortion practices are widespread, with the country falling well below the global average on rule-of-law markers.

The judicial system is underfinanced, overburdened and lacks basic resources and training. Courts primarily exist in urban areas and most of the population does not have access to judicial services. The police forces are largely ineffective, even in major cities and the capital. The police force is characterised by low salaries and poor treatment, meaning police intervention is limited and often involves illicit payments. The rule of law remains tenuous, allowing criminals to act with impunity.

Corruption, weak law enforcement, a dollarised economy and a dominant informal sector render DRC’s banking system highly vulnerable to money laundering. It is estimated that 70% of the country’s economy is informal with political instability making economic reform very difficult. Pervasive patronage networks, bureaucratic inefficiency and political instability hinder international investment prospects.

Civil-society actors are diverse and focus on both the social and economic development of local communities. There are several international initiatives aiming to improve transparency and working conditions in DRC’s minerals supply chain and respond to wider issues, such as corruption. However, civil-society organizations are also vulnerable to political manipulation and corruption themselves. Media outlets are often shut down, and in 2018, 2 journalists were murdered and 2 more disappeared.

Contact the British Embassy in Kinshasa for further information.

Useful Links:

• World Development Indicators
• Democratic Republic of Congo and the IMF
• The World Bank in DRC
• The Centre for the Protection of National Infrastructure
• Travel Advice for DRC
• Reduce risk from Terrorism while Abroad
• World Intellectual Property Organisation: Democratic Republic of the Congo

1. Data on trade in services should be interpreted with caution. The methodology for the dataset used is discussed here. ↩