Business climate: ANAPI has released the commissioned study results on the implementation of reforms in the 26 provinces
The Agence Nationale pour la Promotion des Investissements (ANAPI) has released the results of the study it commissioned from the market research firm Target Sarl, on applying the reforms initiated in the 26 provinces, in the framework of improving the business climate in the DRC.
Below is the full ANAPI article
The DRC is resolutely engaged in a vast process of cleaning up its business environment through implementing reforms affecting all sectors of economic life to reduce, simplify and make transparent the procedures, time, and costs of administrative operations.
However, as part of its institutional prerogatives, the Agence Nationale pour la Promotion des Investissements (ANAPI), which is the technical advisor to the central and local governments on investment promotion and business climate improvement, has commissioned a study to assess the effectiveness of the reforms' implementation initiated by authorities to improve the business environment in the 26 provinces of the DRC.
The survey, conducted by Target, a polling and consulting firm based in Kinshasa, focused on five indicators, namely: the start of economic activity, taxation (land tax and rental income tax), building permits, real estate transfers, and the quality of administration and organizations (centered on the number of economic decrees, apart from budgetary decrees, issued by the provincial assemblies between 2017 and 2022). The purpose was to assess the reforms' impact on the objectives of each of the above indicators, ascertain the level of satisfaction expressed by the beneficiaries of the reforms, and rank the provinces according to the performance criteria in the reforms' implementation.
The survey data collection was organized from 20 October to 19 December 2022, mainly in the capitals of the country's 26 provinces. On Tuesday, 7 February 2023, at a workshop held at the Sultani River Hotel in Kinshasa, Cabinet Target presented the preliminary results of its study to delegates from the sectoral services and the provinces, including the provincial Ministers of Planning. Delegates validated the results of the study.
Therefore, the final results of the study indicate a general level of implementation of the reforms that are still low at the level of the provinces, coupled with an apparent disparity between the provinces in terms of both the ownership of the process of implementing the reforms initiated at the central level and the application of these reforms on the ground. At the end of the study, a final ranking of the provinces is established based on the cumulative scores of each Province on the five indicators selected. The low scores recorded can be explained in particular by the absence of provincial edicts of an economic nature in most provinces. Only the provinces of Kinshasa, Equateur, and Tshopo gained points on this indicator and obtained a score greater than or equal to 50 out of 100 in the general ranking.
Critical difficulties identified include the lack of communication and awareness of business climate reforms, administrative burdens, the absence of economic edicts affecting the business environment, and resistance to reform by the public administration, which is reflected in the failure to display the costs and procedures of various operations. All these factors hinder the growth of enterprises and limit their capacity to create jobs.
To illustrate, the indicator "economic activity start-up," which measures efforts in terms of reducing the time, costs, and procedures applicable to business creation, the survey results show that for applicants who went to the Guichet Unique de création d'entreprise (GUCE), the Tribunal de Commerce and the Tribunal de Grande Instance to obtain the administrative documents to operate, they had to spend an average of 41, 40 and 80 days respectively. Moreover, in the majority of provinces where the GUCE is installed, business creators spend between $103 and $293 for all the formalization procedures of their activities; and, on average, $289 for those who start their procedures at the TRICOM, and between $78 and $775 for those who go to the TGI.
Regarding the taxation indicator, only 11% of respondents know the tax reforms. However, 61% of respondents said they knew the property tax sub-indicator.
About the property transfer indicator, the survey results show that the vast majority of respondents have a low level of knowledge of the transfer tax rate applied in their respective provinces, and 77% of respondents say that they have paid the administrative fees directly for a property transfer operation. Regarding the building permit indicator, 33% of respondents consider that they have sufficient knowledge of the reforms on building permits.
To face the challenges highlighted by this study, ANAPI recommends a series of measures to improve the effectiveness of the implementation of the reforms underway and to strengthen the process of improving the business climate in the DRC. They include the need to strengthen the Public-Public dialogue and the Public-Private dialogue; the continuation of efforts to improve the social conditions of public agents in charge of implementing the reforms as well as the fight against corruption and other economic crimes; the setting up each Province of an appropriate institutional framework (Business Climate Unit) taken care of by the Province, and the strengthening of the capacities of the economic actors to better take advantage of the opportunities offered by the reforms.
To sum up, the publication of the results of this study is an important event for the DRC and all the actors involved in the country's economic development. The recommendations formulated within the framework of this study could contribute to improving the business climate in the DRC and strengthening the country's competitiveness on the international scene. The results of this study could enrich the national barometer on the business climate currently being implemented by the Business Climate Unit of the Presidency of the Republic and allow for better preparation of the revision of the roadmap of government reforms on the business climate currently being prepared.