Foreign direct investment (FDI) in the Democratic Republic of Congo

FDI in Figures

According to UNCTAD’s World Investment Report 2024, FDI into the Democratic Republic of the Congo declined by 11.4% y-o-y in 2023, totalling USD 1.63 billion. At the end of the same period, the FDI stock was estimated at USD 32.62 billion, around 48.5% of the country’s GDP. The extractive sector, long a key attraction for foreign investment, continues to capture investor interest, driven by the rising global demand for minerals from the DRC. Copper, cobalt, gold, coltan, diamonds, tin, and tungsten make up over 95% of the country's export revenue. The telecommunications industry, known for its competitiveness, has also seen considerable investment, alongside the energy sector, which is increasingly focusing on green sources such as hydroelectric and solar power. Additionally, significant investments have been made in breweries, bottling plants, construction companies, and limited textile production. From 2019 to 2023, the DRC attracted USD 13.56 billion in investments through 386 business projects under the Investment Code, according to the National Agency for Investment Promotion (ANAPI). The peak occurred in 2022, with USD 5.15 billion in investments. The services sector led with 44.8% of the total, followed by industry (40.7%), infrastructure (8.5%), and agriculture (5.9%). Foreign Direct Investment (FDI) made up 72.9% of these investments, mainly from China (USD 2.87 billion), Great Britain (USD 1.34 billion), Egypt (USD 1.29 billion), Mauritius (USD 590 million), and India (USD 546 million).

The country benefits from a large domestic market and is strategically located in the centre of the African continent, being also a member of the Common Market for Eastern and Southern Africa (COMESA). The Democratic Republic of Congo has rich hydroelectric and mining resources (such as diamonds, copper, cobalt, gold and uranium), which have remained largely untapped. In order to attract FDIs, the government of the DRC provides incentives which are generally negotiated with foreign investors. However, the business climate is especially poor, and foreign investors are facing a number of challenges (corruption, lengthy administrative procedures and administrative fees) in establishing their businesses in the DRC. While there are laws protecting investors in the country, the court system is often slow, so disputes can extend for years. In 2018, the mining code was amended, increasing taxes and royalties, requiring that at least 10% of the capital of mining companies be owned by indigenous citizens, and severely restricting the export of unprocessed minerals under new mining permits. In addition, the humanitarian and conflict situation in the east of the country and the stormy relations with neighbouring countries (Rwanda, Uganda and Angola) are factors which contribute to persistent insecurity in the country. In the DRC, legislation reserves small-scale commerce and retail trade exclusively for Congolese nationals. Additionally, there exists a 49% foreign ownership limit for agribusinesses, which acts as a constraint on agricultural investment. The telecommunications sector, under the new law enacted in 2022, mandates a 25% national ownership requirement. Subcontracting is restricted to companies "promoted" by Congolese nationals and headquartered in the DRC. According to Law No. 2017-01 of February 8, 2017, which outlines subcontracting regulations in the private sector, subcontracting companies must have a majority of their share capital held by Congolese nationals or entities under Congolese law. Moreover, the management teams must be predominantly composed of nationals, and the workforce must primarily consist of nationals as well. The DRC does not have a dedicated organization for screening inbound investments. Instead, this role is informally fulfilled by the Presidency and various ministries. The country ranks 163rd among the 180 economies on the Corruption Perception Index 2024 and 161 out of 184 on the latest Index of Economic Freedom.

What to consider if you invest in the Democratic Republic of Congo

Strong Points

Among the reasons to invest in the Democratic Republic of Congo:
- high growth rate of the national economy
- abundant mineral resources (copper, cobalt, diamond, gold, tin), with 80 million hectares of arable land and around 1,100 minerals in its subsoil
- the country is a member of several regional economic blocks, including the Southern African Development Community (SADC), the Common Market for Eastern and Southern Africa (COMESA), the Economic Community of Central African States (ECCAS), and the Economic Community of the Great Lakes Countries (ECGLC).
- several incentives granted to foreign investors
- huge potential in sectors like mining, energy (especially hydroelectric), and infrastructure

Weak Points

Several factors hinder the Democratic Republic of Congo’s business climate:
- a difficult business climate (predatory tax agencies, limited access to capital, difficulties enforcing contracts due to the weak judicial system, weak banking sector)
- endemic corruption at all levels of government
- a shortage of skilled labor
- political uncertainty, with ongoing armed conflict in the eastern part of the country
- weak infrastructure (transport, energy, telecommunications)
- high level of poverty
- political instability

Government Measures to Motivate or Restrict FDI

The government of the DRC provides some incentives to foreign investors. Such measures are generally negotiated during a streamlined period of approximately 30 days. Negotiated incentives can range from tax breaks to duty exemptions, and can vary according to the location and type of enterprise, the number of jobs created, the degree of training and promotion of local staff, and the export-producing potential of the operation.
Furthermore, the government created a “one-stop shop” for foreign investors, the Guichet Unique (https://www.guichetunique.cd/), that brings together all the government entities involved in the registration of a company in the DRC.
To know more about local incentives to FDI, consult the guide of the National Agency for Investment Promotion (ANAPI).