Republic of the Congo risk report
Corruption is rife in the Republic of the Congo (also known as Congo-Brazzaville). Almost every sector of the economy suffers from rampant corruption. President Sassou Nguesso holds a tight grip on power, thus rendering all government institutions susceptible to political interference and patronage. The extractive industries and public procurement are particularly at risk. The government has put in place an anti-corruption regulatory framework; however, implementation remains very poor and government officials engage in corruption with impunity. The Penal Code (in French) criminalizes several forms of corruption, including passive and active bribery, extortion and abuse of office in the public sector. Gifts and facilitation payments are illegal but are widely practiced in the Republic of Congo.
Judicial system Very high risk
Corruption in the courts results in the judiciary being a high-risk sector. The courts lack funding and capacity and are undermined by political interference (FitW 2015). Traditional courts deal with property cases in rural areas, and the weakness of formal courts has given more impetus to traditional courts (HRR 2015; BTI 2016). Businesses rarely have recourse in the courts as the cases themselves are subject to corruption and interference from elites (ICS 2016).
The Republic of the Congo is a member of the convention in International Center for Settlement of Investment Disputes (ICSID) but is not a signatory to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.
Police Very high risk
The Republic of the Congo's security apparatus carries a high risk of corruption. Impunity is widespread among police officers, and there are many reports of extortion (HRR 2015). The Human Rights Commission (HRC) is responsible for investigating abuses by security forces; nevertheless, the commission is ineffective, and its members are appointed by the government (HRR 2015; BTI 2016).
Public services Very high risk
The public services sector is high-risk. Recruitment is based on ethnic and regional patronage networks rather than merit (BTI 2016). Similarly, personal contacts are said to be the most important means to get around a burdensome government bureaucracy (ICS 2016). Establishing and running a company in the Republic of the Congo is expensive and subject to regulations that lack transparency (BTI 2016). Overall, the regulatory system is difficult to navigate, and regulations lack clarity (ICS 2016; BTI 2016). Furthermore, investors struggle with routine matters due to poor and slow-functioning administrative institutions (BTI 2016). Starting a business takes 53 days at a cost of 52.3% of income per capita (DB 2016). More generally, the state administration suffers from corruption, as well as a lack of resources and professionalism (BTI 2016).
The Centre de Formalites des Entreprises (CFE) serves as a one-stop-shop for companies starting up business in the Republic of the Congo (ICS 2016). It has offices in Brazzaville, Pointe-Noire, N’kayi, Ouesso and Dolisie (ICS 2016).
Land administration Very high risk
The protection of property rights is undermined by corruption, state interference, inefficient bureaucracy and an inefficient judicial system (BTI 2016). Several companies have raised concerns related to defects in land titles and to the administration and ownership of property (ICS 2016). Nevertheless, there have been no reports of private asset expropriation (BTI 2016). Dealing with construction permits is slightly more time-consuming and more costly than regional averages, while registering property takes on average 55 days at a cost of 12% of the property's value (DB 2016).
Tax administration Very high risk
The tax administration is a high-risk sector; corruption among informal tax collectors is widespread (ICS 2016). The misapplication of the tax law is cited as a concern for investors (ICS 2016). Paying taxes in the Republic of the Congo is much more time-consuming than the regional average, taking 602 hours per year (compared to 308 in neighboring countries) (DB 2016).
Customs administration Very high risk
The customs administration carries a high corruption risk for business. Petty corruption is common among customs officials (ICS 2016). Obstacles to trading across borders include import and export quotas, restrictive import licensing rules, non-tariff barriers, inefficiency, a lack of transparency, and burdensome bureaucracy (BTI 2016). Trading across borders in the Republic of the Congo is generally more costly and more time-consuming than the regional average (DB 2016).
Public procurement Very high risk
The public procurement sector suffers from rampant corruption, presenting businesses with a very high risk. Contract terms lack transparency, and the procurement process often involves bribery (ICS 2016). Construction contracts are commonly allocated to members of the governing coalition, particularly if these involve projects that provide high-value consumption goods to the Congolese elite (BTI 2016).
Foreign companies compete with state-owned enterprises on an equal footing, and the former have at times successfully won contracts sought by the latter (ICS 2016). Tenders are regularly published (ICS 2016).
Natural resources Very high risk
Corruption is pervasive in the extractive industries, thus constituting a very high risk. The Republic of the Congo is one of the biggest producers of oil in sub-Saharan Africa, but the president and his associates hold a monopoly over the sector (BTI 2016). The president’s son, Denis Christel, holds a central position in the state-owned oil company (SNCP), and the company as a whole is under the complete influence of the president’s family (BTI 2016; FitW 2015). Evidence suggests that the SNCP has been used as a means to divert funds to close associates of the ruling elite (FitW 2015). In effect, important revenues from the oil sector have reportedly been lost due to corruption (FitW 2015). The same applies to revenues from the forestry, mining and timber industries, which have also been corruptly exploited (HRR 2015; ICS 2015). International and local NGOs allege that government officials routinely transfer revenues from the oil and forestry sectors into private overseas accounts before declaring the remaining revenues (HRR 2015).
The Republic of the Congo is compliant with the Extractive Industries Transparency Initiative (EITI).
The Republic of the Congo has an anti-corruption framework in place. However, the government does not implement the relevant laws effectively, and officials engage in corruption with impunity (HRR 2015). Corruption-related prosecutions are often politically motivated (FitW 2015). The Congolese Penal Code (in French) criminalizes active and passive bribery, promising, offering or receiving gifts for an undue advantage, facilitation payments, bribery, extortion, abuse of office, and trading in influence. These offenses are criminalized within the public sector, but the private sector can also be held accountable if the state holds interests in a given private company or if a company provides a service to a state entity. Public sector corruption is punishable by up to 15 years in prison (Transparency International, Mar. 2013). Senior and appointed officials are subject to financial disclosure laws (HRR 2015). The government has made efforts to curb the high levels of corruption by improving participation in the review process of government initiatives by diplomatic missions, international NGOs and financial institutions (ICS 2016). However, given the high-level corruption and patronage systems that exist within government structures, the commitment to anti-corruption improvements are rather superficial (BTI 2016).
The Republic of the Congo has ratified the UN Convention against Corruption (UNCAC).
Freedoms of speech and press are guaranteed under the constitution, but the government limits these rights in practice (FitW 2015). Libel is not a crime; however, there are some exceptions, meaning journalists can be at risk when reporting about corruption (FotP 2015). As a result, self-censorship is common, and journalists and media outlets critical of the government may face retaliation, intimidation and/or threats (FitW 2015; FotP 2015). In late-2014, journalist Elie Smith was attacked at his home allegedly because his reporting was believed to be sympathetic of the opposition; Smith and a journalist reporting on the events were later expelled from the country (FitW 2015). Public access to government information is guaranteed by law; however, implementation is poor and officials often delay the process of releasing information (FotP 2015). The government does not restrict internet access (FitW 2015). Overall, the media environment of the Republic of the Congo is considered "partly free" (FotP 2015).
Freedom of assembly is guaranteed by law but restricted in practice (FitW 2015). NGOs may operate independently as long as they do not fall out of favor with the ruling elite (FitW 2015). Civil society organizations have a very limited scope and only engage in low-profile political issues (BTI 2016). Internationally visible NGOs, such as Transparency International and the Observatoire Congolais des droits de l'Homme (OCDH), have been openly critical of the government, particularly in regards to the lack of transparency in the management of the country's oil revenues (BTI 2016). Nonetheless, the government has sought to crush criticism by founding sham organizations to discredit their legitimacy (BTI 2016).
- Bertelsmann Foundation: Transformation Index - Republic of the Congo 2016.
- US Department of State: Investment Climate Statement - Republic of the Congo 2016.
- World Bank & IFC: Doing Business 2016.
- Freedom House: Freedom in the World - Republic of the Congo 2015.
- Freedom House´: Freedom of the Press - Republic of the Congo 2015.
- US Department of State: Investment Climate Statement - Republic of the Congo 2015.
- US Department of State: Human Rights Practices Report - Republic of the Congo 2015.