Congo Brazzaville’s economic performance has not achieved the growth rate needed to achieve its 2025 development goals. Between 2011 and 2015, the economy grew at a rate of 4%, compared to the projected growth rate of 8.5% set forth in the country’s National Development Plan (NDP) due to the poor performance and low prices of the oil sector, where production fell by 5.4% over the same period and prices declined by over 50%. The non-extractive sectors’ good performances depend on mixed effects from activities in the manufacturing, electricity, gas, telecommunication sectors, and public investments in infrastructure (9.7%). In 2016, the economy posted a -0.9% growth rate. Annual inflation is under control and fell sharply between 2012 and July 2016, from 5% to 2.2%.The government opted to slow the pace of public expenditures in 2015 and 2016 in order to amend its fiscal policy following the decline in oil prices, instead of implementing optimal counter cyclical policy. The country’s reserves at the Bank of Central African States (BEAC) declined by 49% in 2015 and 75% in 2016, and can cover up to two months of prospective imports in 2016. Economic growth is expected to recover significantly, with a projected annual average growth rate of 3% over the 2016-2018 periods with the entry into production of Moho Nord field.
Why invest in Congo Brazzaville?
- The country possesses abundant arable land.
- The country is endowed with significant hydrocarbon reserves with an estimated proven 1.6 billion barrels of oil reserves and 90 billion cubed meters of natural gas reserves.
- The country is endowed in mining resources.
- The country is largely covered by the tropical forest
President Denis Sassou Nguesso was elected in elections held in March 2016 and his Prime Minister Clement Mouamba has already formed the cabinet with the objective of promoting institutional change; breaking with the past; promoting youth and technocrats; and moving towards greater gender equality. The government is engaged in the implementation of “The march towards development,” the social project of President Denis Sassou Nguesso for 2016 to 2021, and in promoting the “Living together” initiative calling for unity and national cohesion. The opposition continues to challenge the legitimacy of the president and to request the opening of a true dialogue.
The estimated population was 4.7 million people in 2015 with estimated population growth of 2.5%. Despite continuing yearly improvements in the economic performance, 46 percent of the population lives on less than $1.40 per day, putting poverty prevalence much higher than in peer oil-exporting countries. There is no apparent middle class with respect to education, skills, and material living standards. The country suffers from low education standards and little social mobility. Most of the population still operates in the informal sector of the economy.
The country with a population of about 4.7 million people is one of Africa’s most urban countries, with more than two-thirds of the population living in towns and cities. The urbanisation growth is estimated at 4% per year. The chief motor for urban growth is the concentration of public services and economic activity in the two big cities, Brazzaville and Pointe-Noire. The urban economy supplies 80% of GDP, mainly from oil production at Pointe-Noire and administration and services based in Brazzaville.
Doing business in Congo Brazzaville
The highlights of World Bank score of doing business in Congo Brazzaville is summarised as follows;
|Topics||World Bank 2017 Rank||World Bank 2016 Rank||Change in Rank|
|Starting a Business||178||177||
|Dealing with Construction Permits||124||116||
|Protecting Minority Investors||145||145||–|
|Trading across Borders||182||182|
The government is the in process of creating conducive environment for doing business.
Moody’s has downgraded the government issuer rating of the Republic of the Congo to B2 from B1. The outlook is negative.
Bank of Central Africa State (BEAC) requires banks to record and report the identity of customers engaging in large transactions. In addition the banks must maintain records of large transactions for five years. For any wire transfer in excess of $2,000 for an individual and $20,000 for a corporation a special authorization must be filed with the DGMC (Direction Générale de la Monaie et du Crédit).
The 2002 Constitution guarantees the right to property and expropriation is allowed if it conforms to the law, it is for a public purpose, and if just compensation is paid beforehand. The country is a member of the World Trade Organization (WTO) and is a party to other international treaties governing trade and commerce. Binding international arbitration of investment disputes is accepted. Public Law 6-2003, which established the country’s Investment Charter, states that investment disputes will be subject to settlement under Congolese law. However, independent settlement or conciliation procedures can be enacted by either party. The procedures are to be governed by the following:
- The convention regulating the Community Justice Court;
- The treaty of October 17, 1993, implementing the Organization for the Harmonization of Business Law in Africa (OHADA);
- The International Center for the Settlement of Investment Disputes (ICSID).
Key development challenges
- The heavy reliance on hydrocarbon resources has crowded out development of other sectors and therefore the decline in oil prices is having a negative impact on the economy.
- Inconsistent electric and water supply present the biggest hurdles for most foreign direct investment.
- The country’s road, railway and IT infrastructure is not yet delivered to the level of supporting the economic development of the country.
The country is ranked 159 out of 176 participants in the corruption perception survey conducted by Transparency International in 2016. The country got a corruption index of 20.
The security situation is not yet fully under control and people travelling to the country beyond the capital city should seek advice from competent sources.
Unemployment and skilled labour
The country’s score on the UN Human Development Index improved slightly from 0.564 in 2013 to 0.591 in 2014, but the country’s social indicators remain below those of African states with similar income levels. Unemployment is high, affecting in particular 30% of young people between the ages of 15 and 29, because of the capital-intensive nature of the oil sector and the weakness of the non-oil private sector.
Attitude to Foreign Direct Investment
The government has a strong desire to attract foreign direct investment (FDI) in all sectors and has held Foreign Investment Conference to encourage additional foreign investment. However improving doing business environment is still a major obstacle. The country is pledging to undertake further legislative, regulatory and institutional reforms to improve the investment climate in order to become an emerging market economy by 2025.
Restrictions on Foreign investment
There are no major restrictions on foreign investment. The highly centralized decision making process is however hindering FDI because of the long time it takes to make a decision.
Intellectual Property (IP) Rights
The country is a member of the Central African Economic and Monetary Community (CEMAC) and is automatically a member of the African Intellectual Property Organization (AIPO). AIPO is charged with issuing a single copyright system that is enforceable in all member states. As a member of the World Trade Organization (WTO), the Congo must ensure that its legislation conforms to trade-related aspects governing intellectual property. The Ministry of Commerce and other interested ministries work together to address issues related to counterfeit products and other items entering the country illegally.
Natural resources include petroleum, timber, potash, lead, zinc, uranium, copper, phosphates, gold, magnesium, natural gas, hydropower.
Investment Climate in Republic of Congo has been summarized to include the following
Sources of information