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Funds are freely convertible into any world currency. There are no limitations or waiting periods on remittances, though the Ministry of Finance must approve currency conversions above 2 million CFA approximately 3, USD. Foreign investors who have incorporated their companies in Nigeria have equal access to all financial instruments. After a strong performance in , the NSE experienced significant contractions and decline in , losing nearly 20 percent on its all-share index year-on-year.
The stark reverse in performance was mostly attributed to government regulatory uncertainty and the presidential elections. The Nigerian government has considered requiring companies in certain sectors such as telecoms, oil and gas or over a certain size to list on the NSE, as a means to encourage greater corporate participation and sectoral balance in the NSE, but those proposals have not been enacted to date. The government employs debt instruments, issuing bonds of various maturities ranging from two to 20 years.
Some state governments have issued bonds to finance development projects, while some domestic banks have used the bond market to raise additional capital. The Nigerian Securities and Exchange Commission NSEC has issued stringent guidelines for states wishing to raise funds on capital markets, such as requiring credit assessments conducted by recognized credit rating agencies.
Following a banking crisis, CBN officials intervened in eight of 24 commercial banks roughly one-third of the system by assets due to insolvency or serious undercapitalization and established the government-owned Asset Management Company of Nigeria AMCON to address bank balance sheet disequilibria via discounted purchases of non-performing loans.
The Nigerian banking sector emerged stronger from the crisis thanks to AMCON and a number of other reforms undertaken by the CBN, including the adoption of uniform year-end IFRS financial reporting to increase transparency, a stronger emphasis on risk management and corporate governance, and the nationalization of three distressed banks. Moreover, SIBs are required to maintain a higher minimum capital adequacy ratio of 15 percent. The CBN supports non-interest banking.
The CBN has issued regulations for foreign banks regarding mergers with or acquisitions of existing local banks in the country. Foreign currency for most transactions is procured through local banks in the inter-bank market. Low value foreign exchange may also be procured at a premium from foreign exchange bureaus, called Bureaus De Change. Foreign exchange demand remains high because of the dependence on foreign inputs for manufacturing and refined petroleum products. In the CBN published a list of 41 product categories which could no longer be imported using official foreign exchange channels; the number of categories has since been increased to Affected businesses American and Nigerian have complained publicly and privately that the policy in effect bans the import of some individual items and severely hampers their ability to source inputs and raw materials.
While the CBN has often referred to the list as temporary, the restriction remains in place, with an additional item added in , bringing the number to In February , the Governor of the Central Bank commented that the Bank is currently considering adding more items to the list and bringing the number as high as 50 items.
In , the CBN began providing more foreign exchange to the interbank market via wholesale and retail forward contract auctions, in order to meet some of the demand that had been forced to the parallel market. These actions satisfied some of the pent-up demand for dollars in the economy and resulted in a strengthening of the naira at the parallel market from a low of naira to the dollar in January to around naira to the dollar in April This, combined with increased oil revenue, has boosted CBN reserves and helped stabilize the foreign exchange market.
Most trade happens at the investors and exporters window, which provides the value of the naira quoted by financial markets globally, while the CBN continues to peg the official interbank rate at naira to the dollar for government transactions. The NIPC guarantees investors unrestricted transfer of dividends abroad net a 10 percent withholding tax.
Companies must provide evidence of income earned and taxes paid before repatriating dividends from Nigeria. Money transfers usually take no more than 48 hours. In , the CBN implemented restrictions on foreign exchange remittances. All such transfers must occur through banks. Such remittances may take several weeks depending on the size of the transfer and the availability of foreign exchange at the remitting bank.
Its most recent annual report calendar year reported total assets of nearly USD It was created to receive, manage, and grow a diversified portfolio that will eventually replace government revenue currently drawn from non-renewable resources, primarily hydrocarbons. The NSIA invests through three funds: the Future Generations Fund for diversified portfolio of long term growth, the Nigeria Infrastructure Fund for domestic infrastructure development, and the Stabilization Fund to act as a buffer against short-term economic instability.
NSIA does not take an active role in management of companies. The Embassy has not received any report or indication that the activities of the NSIA limit private competition. Many U. Interest rates are high for the region, banks offer predominantly short-term loans, collateral requirements can be higher than percent of the value of the loan, and Rwandan commercial banks rarely issue significant loan values.
The prime interest rate is percent. Large international transfers are subject to authorization. Investors who seek to borrow more than USD 1 million must often engage in multi-party loan transactions, usually leveraging support from larger regional banks. Only eight companies have publicly listed and traded equities in Rwanda. Rwanda Capital Market Authority was established in to regulate the capital market, commodity exchange and related contracts, collective investment schemes, and warehouse receipts.
Most capital market transactions are domestic. While offers can attract some international interests, they are rare. Rwanda is one of a few sub-Saharan African countries to have issued sovereign bonds. Four new local currency bonds for USD BNR has implemented reforms in recent years that are helping to create a secondary market for Rwandan treasury bonds. The largest, partially state-owned Bank of Kigali BoK , holds more than 30 percent of all assets.
The banking sector holds around 65 percent of total financial sector assets in Rwanda. Non-performing loans constitute 6. Foreign banks are permitted to establish operations in Rwanda, with several Kenyan-based banks in the country. BNR introduced a new monetary policy framework in , which shift its tools toward inflation-targeting monetary framework in place of a quantity-of-money framework.
The private sector has limited access to credit instruments. Prospective account holders are expected to provide proof of residency. Most Rwandan banks are conservative and risk-averse, trading in a limited range of commercial products, though additional products are becoming available as the industry matures and competition increases.
Rwanda has not lost any correspondent banking relationships in the past three years, and all banks are expected to conform to Basel prudential principles. Most financial services in Rwanda are VAT-exempt. Local banks often generate significant revenue from holding government debt and from charging a variety of fees to banking customers. Credit cards are becoming more common in major cities, especially at locations frequented by foreigners, but are not used in rural areas.
Rwandans primarily rely on cash or mobile money to conduct transactions. In , the capital adequacy ratio grew to The number of debit cards in the country grew 8 percent year over year to , only 18 percent of Rwandans have bank accounts , and the number of mobile banking customers grew 22 percent to 1,, In , the government abandoned a dollar peg and established a floating exchange rate regime, under which all lending and deposit interest rates were liberalized.
BNR publishes an official exchange rate on a daily basis, which is typically within a 2 percent range of rates seen in the local market. Some investors report occasional difficulty in obtaining foreign exchange. Rwanda generally runs a large trade deficit, estimated at 10 percent of GDP in The Rwandan franc depreciated against the U.
Transacting locally in foreign currency is prohibited in Rwanda. Regulations set a ceiling on the foreign currency that can leave the country per day. In addition, regulations specify limits for sending money outside the country; BNR must approve any transaction that exceed these limits. Most local loans are in local currency. In December , BNR issued a new directive on lending in foreign currency which requires the borrow to have a turnover of at least RWF 50 million or equivalent in foreign currency, have a known income stream in foreign currency not below percent of the total installment repayments, and the repayments must be in foreign currency.
The collateral pledged by non-resident borrowers must be valued at percent of the value of the loan. In addition, BNR requires banks to report regularly on loans granted in foreign currency. Investors can remit payments from Rwanda only through authorized commercial banks. There is no limit on the inflow of funds, although local banks are required to notify BNR of all transfers over USD 10, to mitigate the risk of potential money laundering. A withholding tax of 15 percent to repatriate profits is considered high by a number of investors given that a 30 percent tax is already charged on profits, making the whole tax burden 45 percent.
Additionally, there are some restrictions on the outflow of export earnings. Companies generally must repatriate export earnings within three months after the goods cross the border. Tea exporters must deposit sales proceeds shortly after auction in Mombasa, Kenya.
Repatriated export earnings deposited in commercial banks must match the exact declaration the exporter used crossing the border. Rwandans working overseas can make remittances to their home country without impediment. The concentrated nature of the Rwandan banking sector limits choice, and some U. In , the Rwandan government launched the Agaciro Development Fund ADF , a sovereign wealth fund that includes investments from Rwandan citizens and the international diaspora.
In November , the fund was worth USD ADF only operates in Rwanda. In addition to returns on investments, citizens and private sector voluntary contributions, and other donations, ADF receives RWF 5 billion every year from tax revenues and 5 percent of proceeds from every public asset that is privatized.
The fund also gets 5 percent of royalties from minerals and other natural resources each year. ADF invests mainly in Rwanda. Seychelles welcomes foreign portfolio investment. Listing and trading are available in U. Leadership at the exchange are reportedly considering whether to support crypto-assets and instruments issued on blockchain platforms. Portfolio investment in Seychelles is limited by the small size of the economy and banking sector. The buying and selling of sizeable positions may have an outsized impact on the Seychelles Rupee and the economy in general.
There are no restrictions on trading by foreigners. By the end of , the shares of 27 companies were listed on the three equities boards of Trop-X and total market capitalization amounted to USD million. Existing policies do facilitate the free flow of financial resources in and out of the economy. Foreign investors are able to obtain credit on the local market and through the Seychelles banking system, and a variety of credit instruments are available to both local and foreign investors.
Seychelles has a two-tier banking system that separates the central and commercial bank functions and roles. The Central Bank of Seychelles is the only administrative body responsible for receiving applications for banking licenses, whether domestic or offshore, and issuing the corresponding licenses.
SBM Bank Seychelles received its banking license in December but has not yet commenced operations. According to a report by the Central Bank of Seychelles, 94 percent of Seychellois use banks. Seychelles also has three non-banking financial institutions: the Seychelles Credit Union, a savings and credit cooperative society; the Development Bank of Seychelles, which provides flexible financing for businesses and projects to promote economic growth and employment; and the Housing Finance Corporation, a government-owned company that provides financing to Seychellois for the purchase of land, the construction of homes, and financing home improvements.
The Seychelles banking sector is generally healthy, though it is limited by small size and reliance on correspondent bank relationships. Due to concerns about money-laundering and illicit finance in the Seychellois financial sector, some local banks have lost their correspondent bank relationship with foreign banks, a phenomenon known as de-risking, making it difficult for local banks to perform international transactions.
In , the Central Bank and the Financial Services Authority visited foreign financial centers to address de-risking. The government is actively working with international experts, including the World Bank and International Monetary Fund, to ensure Seychelles is not perceived as high risk jurisdiction. According to the Central Bank, in January non-performing loans to total gross loans in the Seychelles banking sector stood at 3.
A wide range of financial services such as checking accounts, savings accounts, loans, transactions in foreign currencies, and foreign currency accounts are available in the banking system. Since the IMF reform package of , the GOS places no restrictions or limitations on foreign investors converting, transferring, or repatriating funds associated with investment.
Funds are freely converted. Foreign exchange controls were removed in and foreign investors are free to repatriate their profits and other incomes. The Embassy is unaware of any planned changes to remittance policies, time limits on remittances, or use of any legal parallel market.
Seychelles does not maintain any sovereign wealth funds. However, in his State of the Nation address in March , the President said that a law would be presented to the National Assembly later during the year to establish a sovereign wealth fund. As at March , this had not materialized. In , the DSE launched a second tier market, the Enterprise Growth Market EGM with lower listing requirements designed to attract small and medium sized companies with high growth potential.
The Capital Markets and Securities Authority CMSA Act facilitates the free flow of capital and financial resources to support the capital market and securities industry. Tanzania, however, restricts the free flow of investment in and out of the country, and Tanzanians cannot sell or issue securities abroad unless approved by the CMSA. Under the Capital Markets and Securities Foreign Investors Regulation , there is no aggregate value limitation on foreign ownership of listed non-government securities.
Even with this recent development allowing EAC participation, ownership of government securities is still limited to 40 percent of each security issued. In , Vodacom planned to offer its shares from March 9 to April 19, but lack of demand required it to extend the offering period to July Moreover, to spur demand, the GoT opened the IPO to foreign investors who purchased 40 percent of the total shares offered.
On February 24, , however, the GoT surprised the industry by amending the regulations so that the 30 percent stake had to be floated by August 23, , rather than October 7, However, some mining companies have not listed on the DSE. However, participation in the formal banking sector still remains low. In , low private sector credit growth and high non-performing loan NPL rates were persistent problems. In March , the Bank of Tanzania BoT cut its discount rate to 12 percent from 16 percent to boost lending and economic growth, the first time it had cut interest rates since These measures did not adequately spur lending, so in August , the BoT reduced its discount rate for the second time from 12 to 9 percent.
In , the BoT continued to address problems in the banking sector. In January , the BoT closed five community banks for under capitalization and gave an additional three until June to raise capital. As of March 31, , the banking sector was composed of 41 commercial banks, 6 community banks, 5 microfinance banks, 3 development financial institutions, 3 financial leasing companies and 2 credit bureaus.
Private sector companies have access to commercial credit instruments including documentary credits letters of credit , overdrafts, term loans, and guarantees. Foreign investors may open accounts and earn tax-free interest in Tanzanian commercial banks. The Banking and Financial Institution Act established a framework for credit reference bureaus, permits the release of information to licensed reference bureaus, and allows credit reference bureaus to provide to any person, upon a legitimate business request, a credit report.
Tanzanian regulations permit unconditional transfers through any authorized bank in freely convertible currency of net profits, repayment of foreign loans, royalties, fees charged for foreign technology, and remittance of proceeds. The only official limit on transfers of foreign currency is on cash carried by individuals traveling abroad, which cannot exceed USD 10, over a period of 40 days. Investors rarely use convertible instruments. In and , the Bank of Tanzania inspected all forex shops in the country and ultimately found that most of them did not meet the requirements of new laws governing the businesses.
As a result, more than ninety percent of the Forex bureaus in country were closed. The government then licensed the commercial banks and Tanzania Post Corporation to open forex shops. There are no recent changes or plans to change investment remittance policies that either tighten or relax access to foreign exchange for investment remittances. The government generally welcomes foreign portfolio investment and has put in place a legal and institutional framework to manage such investments.
Liquidity remains constrained to enter and exit sizeable positions on the USE. Capital markets are open to foreign investors and there are no restrictions for foreign investors to open a bank account in Uganda. The government imposes a 15 percent withholding tax on interest and dividends.
Foreign-owned companies may trade on the stock exchange, subject to some share issuance requirements. Credit is allocated on market terms and foreign investors are able to access credit. However, the private sector remains crowded out of domestic debt markets due to extensive domestic government borrowing.
Formal banking participation remains low, with twenty percent of Ugandans having access to deposits in bank accounts. While only some five million Ugandans hold bank accounts, some 22 million use mobile money transfers to accomplish basic financial transactions.
In , the government imposed new taxes on the use of mobile money, resulting in a drop in mobile money transactions. The Bank of Uganda regulates the banking sector. Foreign banks may establish branches in Uganda.
Uganda keeps open capital accounts, and there are no restrictions on capital transfers in and out of Uganda. Investors may convert funds associated with any form of investment into any world currency. The Ugandan shilling UGX trades on a market-based floating exchange rate. There are no restrictions for foreign investors on remittances to and from Uganda. The Financial Intelligence Authority and Bank of Uganda may delay remittances if investigating money laundering concerns or terrorist finance.
In , the government established the Uganda Petroleum Fund to receive and manage all government revenues from the oil and gas sector. By law, the government must spend a portion of proceeds from the fund on oil-related infrastructure, with parliament appropriating the remainder of revenues through the normal budget procedure. In early , the Auditor General found that the government had already made significant withdrawals from the fund without parliamentary approval as required by law.
Government policies generally facilitate the free flow of financial resources to support the entry of resources in the product and factor market. Banking supervision and regulation by the Bank of Zambia BoZ has improved slightly over the past few years. Improvements include revoking licenses of some insolvent banks, denying bailouts, limiting deposit protection, strengthening loan recovery efforts, and upgrading the training of and incentives for bank supervisors.
High domestic lending rates and the limited accessibility of domestic financing constrain business. High returns on government securities encourage commercial banks to invest heavily in government debt to the exclusion of financing productive private sector investments. The Lusaka Stock Exchange LuSE , established in , is structured to meet international recommendations for clearing and settlement system design and operations.
There are no restrictions on foreign participation in the LuSE, and foreigners may invest in stocks on the same terms as Zambians. The LuSE has offered trading in equity securities since its inception and, in March , the LuSE became the official market for selling Zambian government bonds. Investors intending to trade a listed security or government bond are now mandated to trade via the LuSE.
Secondary trading of financial instruments in the market is very low or non-existent in some areas. Existing policies facilitate the free flow of financial resources into the product and factor markets. Credit is allocated on market terms and foreign investors can get credit on the local market, although local credit is relatively expensive and most investors therefore prefer to obtain credit outside the country.
The financial sector is comprised of three sub-sectors according to financial sector supervisory authorities. The banking and financial institutions sub-sector is supervised by the BoZ, the securities sub-sector by the SEC, and the pensions and insurance sub-sector by the Pensions and Insurance Authority. There are currently 19 banks in Zambia with the largest four banks holding nearly two-thirds of total banking assets. The dominance of the four largest banks in deposits and total assets has been diluted by increased market capture of smaller banks and new industry entrants, an indication of growing competitive intensity in this segment of the banking market.
There continued to be a steady increase in electronic banking and related services over the last few years. As stated above, banking supervision and regulation by the BoZ has improved slightly over the past few years. The commercial lending rate ranged between 23 and 26 percent as of , among the highest in the region. The persistence of high interest rates led the government to urge commercial banks to reduce their lending rates in order to stimulate private sector growth and the economy as a whole.
One factor inhibiting more affordable lending is a culture of tolerating loan default, which many borrowers view as a minor transgression. Non-performing loans NPLs in the sector are growing with some estimates as high as 15 percent. The government itself is a contributor as it is in arrears of about USD 1. Lender data reporting remains erratic and credit rating information is not widely available. In addition, high returns on government securities encourage commercial banks to invest heavily in government debt, to the exclusion of financing productive private sector investments.
Banking officials acknowledge that they need to upgrade the risk assessment and credit management skills within their institutions in order to better serve borrowers. Banks provide credit denominated in foreign currency only for investments aimed at producing goods for export.
Banks provide services on a fee-based model and banking charges are generally high. Home mortgages are available from several leading Zambian banks, although interest rates are still very high. The decision to license banks lies with the Registrar. Foreign banks or branches are allowed to operate in country as long as they fulfill BoZ requirements and meet the minimum capital requirement of USD million for foreign banks and USD 20 million for local banks.
According to the BoZ, many banks in the country have correspondent banking relationships; it is difficult to assess how many there are or whether any bank has lost any correspondent banking relationships in the past three years. It is also difficult to analyze if any of those correspondent relationships are currently in jeopardy as the daily management of those relationships are carried out by the individual banks and not by the BoZ.
As key players in the financial sector, NBFIs are subject to regulatory requirements governing their prudential position, consumer protection, and market conduct in order to safeguard the overall soundness and stability of the financial system. The NBFIs comprise 8 leasing and finance companies, 3 building societies, 1 credit reference bureau, 1 savings and credit institution, 1 development finance institution, 80 bureau de change, 1 credit reference bureau, and 34 micro-finance institutions.
Private firms are open to foreign investment through mergers and acquisitions. The CCPC reviews and handles big mergers and acquisitions. The High Court of Zambia may reverse decisions made by the Commission.
Under the CCPA, foreign companies without a presence in Zambia and taking over local firms do not, however, have to notify their transactions to the Commission, as it has not established disclosure requirements for foreign companies acquiring existing businesses in Zambia. There are currently no restrictions or limitations placed on foreign investors converting or transferring funds associated with an investment including remittances of investment capital, earnings, loan repayments, and lease payments into freely usable currency and at a legal market-clearing rate.
Investors are free to repatriate capital investments, as well as dividends, management fees, interest, profit, technical fees, and royalties. Funds associated with investments can be freely converted into internationally convertible currencies. The BoZ pursues a flexible exchange rate policy, which generally allows the currency to freely float, though it has intervened heavily to support the local currency, the kwacha, in to In March , the government announced the revocation of SI Number 33 mandating use of the kwacha for domestic transactions and SI Number 55 monitoring foreign exchange transactions.
The decision to revoke the SIs was widely praised in the business community. The kwacha, however, has remained weak in historical terms against the dollar and in early April was trading between Over-the-counter cash conversion of the kwacha into foreign currency is restricted to a USD 5, maximum per transaction for account holders and USD 1, for non-account holders. No exchange controls exist in Zambia for anyone doing business as either a resident or non-resident. There are no restrictions on non-cash transactions.
There are no recent changes or plans to change investment remittance policies that tighten or relax access to foreign exchange for investment remittances. There are no restrictions on converting or transferring funds associated with an investment including remittances of investment capital, earnings, loan repayments, or lease payments into freely usable currency at the legal market clearing rate. Foreign investors can remit through a legal parallel market, including one utilizing convertible, negotiable instruments such as dollar-denominated government bonds issued in lieu of immediate payment in dollars.
There are no limitations on the inflow or outflow of funds for remittances of profits or revenue and there is no evidence to show that Zambia manipulates the currency. ESAAMLG coordinates with other international organizations concerned with combating money laundering, studying emerging regional typologies, developing institutional and human resource capacities to deal with these issues, and coordinating technical assistance where necessary. Skip to content An official website of the United States government Here's how you know Official websites use.
Share sensitive information only on official, secure websites. For current information, go to www. Report Overview. Sort by Country Sort by Section. Chad 6. Financial Sector Congo, Democratic Republic of the 6. Financial Sector Congo, Republic of the 6. Financial Sector Gabon 6. Financial Sector Kenya 6. Financial Sector Madagascar 6. Financial Sector Malawi 6. Financial Sector Niger 6. Financial Sector Nigeria 6. Financial Sector Rwanda 6.
Financial Sector Seychelles 6. Financial Sector Tanzania 6. Financial Sector Uganda 6. Financial Sector Zambia 6. Financial Sector. Foreign Exchange and Remittances Foreign Exchange The government does not restrict converting funds associated with an investment including remittances of investment capital, earnings, loan repayments, lease payments, royalties into a freely usable currency at legal market-clearing rates. Remittance Policies There are no recent changes to or plans to change investment remittance policies.
Chad does not engage in currency manipulation. Congo, Democratic Republic of the 6. Financial Sector Capital Market and Portfolio Investment The Congolese financial system continues to improve with new regulations and guidelines seeking to maintain stability and consolidate the system. Money and Banking system The Congolese financial system is growing but it remains fragile and operates primarily through the Central Bank.
Foreign Exchange and Remittance Foreign Exchange As part of broad economic reforms begun in , the DRC adopted a free-floating exchange rate policy and lifted various restrictions on business transactions, including in the mining sector.
Remittance Policies Although there is no legal restriction on converting or transferring funds related to investment, new exchange regulations will increase the time for in-country foreigners to repatriate export and re-export income from 30 to 60 days. Congo, Republic of the 6.
Financial Sector Capital Markets and Portfolio Investment ROC maintains a neutral attitude toward foreign portfolio investment and does not widely practice foreign portfolio investment. Foreign Exchange and Remittances Foreign Exchange No known legal restrictions or limitations exist against converting, transferring or repatriating funds associated with an investment, including remittances. Remittance Policies There have been no recent changes or plans to change investment remittance policies that either tighten or relax access to foreign exchange for investment remittances.
No known time limitations on remittances exist. No official sovereign wealth fund exists. Gabon 6. Money and Banking System T he banking sector is composed of seven commercial banks and is open to foreign institutions. Remittance Policies There government recently changed investment remittance policies to tighten access to foreign exchange for investment remittances. Kenya 6. Money and Banking System The Kenyan banking sector in included 47 commercial banks, one mortgage finance company, 14 microfinance banks, eight representative offices of foreign banks, 74 foreign exchange bureaus, 18 money remittance providers, and three credit reference bureaus.
Foreign Exchange and Remittances Foreign Exchange Policies Kenya has no restrictions on converting or transferring funds associated with investment. Madagascar 6. Foreign Exchange and Remittances Foreign Exchange To date, there is no restriction on capital inflows and outflows; however, justification is mandatory before sending money overseas. Remittance Policies There are no restrictions on converting or transferring funds associated with foreign investment, including remittances of investment capital, earnings, loan repayments, and lease payments.
Malawi 6. Financial Sector Capital Markets and Portfolio Investment The Malawi government recognizes the importance of foreign portfolio investment and has made efforts to provide a platform for such investment through the establishment of a Malawi Stock Exchange MSE, www. Money and Banking System According to the Institute of Bankers in Malawi, only 25 percent of the adult population in Malawi uses banking services.
Foreign Exchange and Remittances Foreign Exchange Government policy seeks to ensure the availability of foreign exchange for business transactions and remittances in order to attract investors and spur economic growth. Remittance Policies Investment remittance policies in Malawi have not changed in the past year. Niger 6. Money and Banking System Less than three percent of Nigeriens have a bank account and the debt rate of the financial sector, measured by the ratio money supply, is at Foreign Exchange and Remittances Foreign Exchange There are no restrictions or limitations placed on foreign investors in converting, transferring, or repatriating funds associated with an investment, including remittances.
Nigeria 6. Foreign Exchange and Remittances Foreign Exchange Policies Foreign currency for most transactions is procured through local banks in the inter-bank market. Remittance Policies The NIPC guarantees investors unrestricted transfer of dividends abroad net a 10 percent withholding tax.
Rwanda 6. Foreign Exchange and Remittances Foreign Exchange In , the government abandoned a dollar peg and established a floating exchange rate regime, under which all lending and deposit interest rates were liberalized. Sovereign Wealth Funds In , the Rwandan government launched the Agaciro Development Fund ADF , a sovereign wealth fund that includes investments from Rwandan citizens and the international diaspora.
Seychelles 6. Money and Banking System Seychelles has a two-tier banking system that separates the central and commercial bank functions and roles. Foreign Exchange and Remittances Foreign Exchange Since the IMF reform package of , the GOS places no restrictions or limitations on foreign investors converting, transferring, or repatriating funds associated with investment. Remittance Policies Foreign exchange controls were removed in and foreign investors are free to repatriate their profits and other incomes.
Sovereign Wealth Funds Seychelles does not maintain any sovereign wealth funds. The Democratic Republic of the Congo DRC is the second largest country in Africa and potentially one of the richest in the world in terms of natural resources. With 80 million hectares million acres of arable land and 1, minerals and precious metals, the DRC has the resources to achieve prosperity for its people, and serve as a catalyst for African economic growth. Despite its potential, however, the DRC still falls short of providing adequate security, infrastructure and health care to its estimated 81 million inhabitants, some 75 percent of whom live on less than two dollars a day.
Growing uncertainty over delayed elections — now scheduled for December — continues to deter foreign direct investment FDI. The primary sector consists of farming, mining, and logging. Agriculture is by far the largest rural employer, and is primarily of a subsistence nature. Inadequate infrastructure and predatory taxation has greatly diminished the secondary sector, with several breweries and bottlers, a number of large construction firms, and limited textiles production still active.
The tertiary sector includes retail and wholesale sales, banking, transport and communication components. Micro commerce dominates the retail sector; the banking sector is small in terms of capitalization, but diverse in terms of ownership; while the highly competitive telecommunications industry is expanding into electronic banking.
Mining, food processing, energy, banking, and telecomm attract the bulk of foreign, including U. A draconian new mining code may deter large-scale investment in the sector, while foreign investor interest in the massive 40, MW Inga III hydro project has stalled due to political uncertainty. Foreign exchange reserves rose slightly to USD million 2.
The value of the Congolese franc had remained stable between and , but depreciated approximately 24 percent against the US dollar in both and Similarly, inflation averaged 1. Approximately 90 percent of bank deposits and loans are denominated in US dollars and the prices of many goods, services and financial activities are indexed to the dollar. High dollarization also increases the systemic exposure to liquidity shocks, given that the minimum regulatory requirements of banks are defined in local currency.
Despite reforms of recent years that grant tax breaks or holidays to investors, the business climate deteriorated in Many investors still complain of heavy tax burdens and of an overly complex, duplicative, and opaque tax system. Government agencies at all levels exert significant administrative pressure on businesses with audits and inspections that often result in questionable legal fines. The GDRC the Government of the DRC is attempting to put in place policies to promote gender mainstreaming in development programs, to include gender issues in university curricula, and to promote gender-based research.
These initiatives seek to accelerate women's empowerment within the family, workplace, and community, particularly as it pertains to health, education, and political participation and leadership. While these are positive measures, the GDRC still has much to do to accomplish gender mainstreaming. Overall, businesses in the DRC face numerous challenges, including fragility of functional infrastructure, endemic corruption at all levels of government, predatory tax agencies, limited access to capital, a shortage of skilled labor, difficulties enforcing contracts, political uncertainty, a very weak judicial system, ongoing armed conflict in many parts of the eastern DRC, and the emergence of sporadic violence in other parts of the country.
The Embassy strongly urges all prospective investors to visit www. Table 1. Website Address. TI Corruption Perceptions Index. Global Innovation Index. World Bank GNI per capita. USD Policies toward Foreign Direct Investment. The DRC remains an extremely challenging environment in which to conduct business.
Current investment regulations prohibit foreign investors from engaging in informal small retail commerce, referred to locally as petit commerce, and ban foreign majority-ownership of agricultural concerns. Visas for foreign workers are limited to six consecutive months and cost between USD single entry and USD multiple-entry. Salaries paid to expatriates are taxed at a higher rate than those of locals to encourage local employment.
The DRC Constitution stipulates entitlement to own and establish a business enterprise, and to engage in all forms of remunerative activity, noting minimal restrictions related to small commerce as described in Section 1. The government has drafted foreign ownership legislation, but parliamentary debate is still pending. Although it may not be based in law, many investors note that in practice the GDRC requires foreign investors to both hire local agents and participate in a joint venture with the government or local partners.
The law restricts subcontracting activity to majority Congolese-owned and capitalized-companies whose head offices are located in the national territory. The only exception is in the case of unavailability of expertise in a specific subcontracting area. In that case, proof of lack of expertise must be provided to the competent authority to enable a non-Congolese company to be used as a subcontractor, but the activity may not exceed six months.
The law also forbids the subcontracting of more than 40 percent of the overall value of a contract; voids clauses, stipulations and contractual arrangements that violate the provisions of this law; and carries penalties of up to USD , and the risk of closure of operations for six months if certain provisions are violated.
Currently foreign businesses had a month grace period, which ended in January , to comply with the new law. As the government has yet to issue implementing regulations, however, the law has yet to come into force.
Of particular concern to mining companies, the government unilaterally removed a stability clause contained in the mining code of The stability clause protects investors from any new fees or taxes for ten years. Overall, the Mining Code sought to re-vitalize the mining sector by attracting foreign investors to DRC, which was then considered to be an extremely high-risk investment destination.
Removal of the stability clause may deter future investment in the mining sector. Other Investment Policy Reviews. The report highlighted four key points, which for the most part remain valid:. The GDRC has recently computerized the customs offices in Kinshasa, Matadi, and Haut Katanga, which generate 70 percent of customs revenue, but the transition from manual to computerized systems has been poorly managed, leading to extended delays in clearing customs.
Business Facilitation. The registration process now officially takes three days, but in practice it can take much longer. However, some businesses have reported that the Guichet Unique has considerably shortened and simplified the overall process of business registration.
Local sourcing requirements for foreign investors in the new subcontracting law discussed in Section 1. The GDRC does not provide any specific provision for equitable treatment of women or underrepresented minorities in the economy, although women and underrepresented minorities are accorded all citizen rights within the law.
Outward Investment. The GDRC does not prohibit outward investment, nor does it particularly promote it. There are no current government restrictions preventing domestic investors from investing abroad, and there are no current blacklisted countries with which domestic investors are precluded from doing business. The U. In October , the DRC and Rwanda signed an agreement on a simplified trade regime covering only small-scale commerce between the countries.
In August , Zambia and the DRC signed a bilateral taxation treaty that abolished customs taxes across their common border. Transparency of the Regulatory System. The DRC does not yet have a complete legal and regulatory framework for the orderly conduct of business and the protection of investments.
Proposed laws and regulations are rarely published in draft format for public discussion and comments; discussion is typically limited to the governmental entity that proposes the draft law and Parliament prior to enactment. By implementing the OHADA, the GDRC strengthened its legal framework in the areas of contract, company, and bankruptcy law and set up an accounting system better aligned to international standards.
The roadmap sought to achieve stakeholder consensus on a definition of beneficial ownership in the DRC context, and draft legislation requiring certain categories of businesses to disclose their beneficial owners. Unfortunately, its implementation has been so delayed that no activities were carried out during as planned.
As a result, stakeholders amended the roadmap and a revised version was published in December The annual progress report published in July indicates that, overall, the country has made meaningful progress in complying with the EITI standard, a rating that, if not improved, would fall short of the threshold for designation as EITI compliant.
International Regulatory Considerations. The Act establishes a zero rate for goods originating in COMESA member countries following a three-year graduated scale of 40 percent, 30 percent and 30 percent reductions respectively. However, the DRC is not on track to meet this goal.
In October , the WTO noted that there had been positive developments on various fronts in the DRC, including streamlining of the country's tax system, introduction of a VAT, and enactment of a new customs act, a new excise act, and a new procurement code.
The WTO further commended the adoption of new sectorial policies that have opened several economic sectors, including insurance services and hydrocarbon trade, to competition. Legal System and Judicial Independence. The DRC is a civil law country, and the main provisions of its private law can be traced to the Napoleonic Civil Code.
The general characteristics of the Congolese legal system are similar to those of the Belgian legal system, as the DRC largely received its law from its Belgian colonialists. Customary or tribal law is another aspect of the legal system. Various local customary laws regulate both personal status laws and property rights, especially the inheritance and land tenure systems in traditional communities throughout the country.
The Congolese legal system is divided into three branches: public law, private law and economic law. Public law regulates legal relationships involving the state or state authority; private law regulates relationships between private persons; and economic law regulates interactions in areas such as labor, trade, mining and investment.
These courts are designed to be led by professional judges specializing in commercial matters and exist in parallel to an otherwise inadequate judicial system. A lack of qualified personnel and a reluctance by some DRC jurisdictions to fully recognize OHADA law and institutions have precluded effective operation of the commercial courts. The European Union began funding the construction or rehabilitation of commercial courts in Boma, Butembo, Kolwezi and Kananga in , and the World Bank later supported the rehabilitation of the courts in Kinshasa, Kisangani, and Mbuji-Mayi.
Infrastructure quality issues and delays in execution have hampered these projects. The current judicial process is not procedurally reliable, as its rulings are often not respected. The national court system provides appeals mechanism, and the OHADA provides regulations and a legal framework to appeal verdicts. Laws and Regulations on Foreign Direct Investment. Mining, hydrocarbons, finance, and other sectors are also governed by sector-specific investment laws.
The GDRC deregulated the electricity and insurance sectors in , and in Parliament passed a bill to reform the hydrocarbons sector and revised the labor law. Lawmakers have authored legislation to address consumer protection, e-commerce, liberalization of prices, competition regulation, account auditing, agriculture regulation, trade courts, entrepreneurship, and free trade areas.
With the exception of the property rights legislation, all of these bills are included in the current March 15 to June 15 Parliamentary agenda. ANAPI is the DRC agency with the mandate to simplify the investment process, make procedures more transparent, assist new foreign investors, and improve the image of the country as an investment destination investindrc. The GDRC also instituted a Guichet Unique, in , which is a one-stop shop to simplify business creation, cutting processing time from five months to three days, and reducing incorporation fees from USD 3, to USD Competition and Anti-Trust Laws.
Since the DRC does not have a dedicated domestic competition law regime, the regional competition law regime is effectively the only competition law available. Expropriation and Compensation. Technically, the GDRC may only proceed with an expropriation when it benefits the public interest, and the person or entity subject to an expropriation should receive fair compensation. Some claims have been taken to arbitration, though many arbitral judgments against the GDRC are not paid in a timely manner, if at all.
Dispute Settlement. In the case of an investment dispute, the U. In the case of a dispute between a U. If the parties cannot reach agreement under the terms of the U. However, the reservation related to immovable property effectively excludes disputes relating to mining rights, which, under Congolese law, are considered immovable property. Although there are instances of ongoing corruption at every level of the DRC judicial system, several disputes between foreign investors and State Owned Enterprises SOE have been resolved in favor of the foreign investor.
International Commercial Arbitration and Foreign Courts. Arbitral awards rendered in any OHADA Member State are enforceable in any other OHADA member state, subject to obtaining an exequatur a legal document issued by a sovereign authority allowing a right to be enforced in the authority's domain of competence of the competent court of the State in which the award is to be made. Exequaturs shall, in principle, be granted unless the award clearly affects public order in that State.
Decisions granting or refusing the granting of an exequatur may be appealed to the CCJA. Bankruptcy Regulations. The OHADA Uniform Act on Insolvency Proceedings provides a comprehensive framework not only for companies encountering financial difficulties and seeking relief from the pressing demands of creditors, but also for creditors to file their claims.
Investment Incentives. Investment incentives for companies entering the DRC are generally negotiated during a streamlined period of approximately 30 days. Negotiated incentives can range from tax breaks to duty exemptions, and are dependent upon 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. Investors who wish to take advantage of customs and tax incentives in the extant Investment Code must apply to the National Agency for Investment Promotion ANAPI , which, in turn, submits applications to the Ministries of Finance and Planning for final approval.
The DRC does not have designated free trade areas or free port zones; however legislation is pending to create such zones. Currently the implementation process is on hold, however, and there is no indication of when it will resume. The GDRC has yet to take any steps to implement the agreement. Performance and Data Localization Requirements. Although there are no specific performance requirements for foreign investors, they invariably must negotiate many of the conditions of their investments with ANAPI.
The investor must also agree that all imported equipment and capital will remain in country for at least five years. The Ministry of Labor controls expatriate residence and work permits. For U. Visa, residence or work permit requirements are not discriminatory or excessively onerous, and are not designed to prevent or discourage foreigners from investing in the DRC, though corruption and bureaucratic hurdles can create serious delays in obtaining the necessary permits and visas.
GDRC enacted a new law on subcontracting in January , which requires foreign companies to use local subcontractors for subsidiary services see section 2. The DRC does not have specific legislation on data storage. However, it recognizes the need for appropriate regulation. As there is no obligatory legislation, in practice, few companies report on data storage.
Real Property. Despite this provision, the GDRC has acknowledged the lack of enforcement in the protection of property rights. Relevant draft bills have been pending before Parliament since but are not included on the current March parliamentary session agenda.
However, land registration may not fully protect property owners, as records are often incomplete and legal disputes over land deals are common. In addition, there is no specific regulation of real property lease or acquisition. Ownership interest in personal property e. Intellectual Property Rights.
Prior to independence in , IPR was regulated by multiple Belgian instruments. Both instruments remain in force, but legislative action in the area of IPR and enforcement of the existing laws has been virtually non-existent since their passage. Specifically, TRIPS requires WTO members to provide copyright rights covering content producers, including performers; producers of sound recordings and broadcasting organizations; geographical indications, including appellations of origin; industrial designs; integrated circuit layout-designs; patents; new plant varieties; trademarks; trade dress; and undisclosed or confidential information.
TRIPS also specifies enforcement procedures, remedies, and dispute resolution procedures. As a least-developed country member, DRC was given a longer transition period, through , to comply with TRIPS, but to this day it continues to be out of compliance with its international IPR obligations.
The pertinent conventions provide maximum protection of 20 years for patents, and 20 years, renewable, for trademarks, starting from the date of registration. If not used within three years, a trademark can be cancelled. By contrast, the current Congolese laws provide only 15 years of protection on a number of patents, and do not include all the means mentioned in TRIPS for enforcement of IPR rights. Capital Market and Portfolio Investment. The Congolese financial system has recovered from the crisis but is now at a crossroads.
Although reforms have been launched, the system remains small, heavily dollarized, characterized by fragile balance sheets, and cumbersome to use. The GDRC backed away from its short-lived de-dollarization program, and further reforms are needed to strengthen the financial system, support the expansion of the financial sector, and spur economic growth.
Shock resilience is undermined by inadequate risk-based controls, weak enforcement of regulations, low profitability, and excessive reliance on demand deposits. The system is also characterized by a significant concentration of credit and exposure to systemic failure in the event of the insolvency of a large borrower.
Financial inclusion is increasing, but substantial progress is needed to develop payment systems, facilitate the use of financial services, and strengthen regulation of the non-banking sector. Consolidation and strengthening of microfinance along with reform of the insurance and pension sub-sector could facilitate the expansion of financial services and attract long-term investors.
There are no stock exchanges operating in the country, although a small number of private equity firms are actively investing in the mining industry. The institutional investor base is poorly developed, with only an insurance company and a state pension fund as participants. The Central Bank of Congo BCC , developed a market for short-term bonds, but most of these bonds are bought and held by local Congolese banks. In the absence of private debt securities, the fixed-rate market is limited to government-issued treasury bonds with maturities of up to 28 days traded through commercial banks.
Access to the primary market is limited to commercial banks holding securities accounts at the BCC and all investors, including institutional and individual investors, must submit bids through banks. Commercial banks, which dominate the investor base, may trade in treasury bills in the secondary market, but in order to do so bids and prices for which they agree to trade must be transparent and publicized.
There is no market for derivatives in the country. The DRC suffers from a weak and fragile financial infrastructure. The Central Bank worked for a decade to implement reform on the national payment system via a gradual and interactive approach that identified and corrected deficiencies at each stage. This culminated with the Central Bank inaugurating in September an automated system that supports customer transfers, regulation of monetary policy operations, and the processing of transactions for the regional payment system-REPSS, set up by COMESA member countries.
The system also includes an interbank automated clearing module for check payments, collections, and bills of exchange. Borrowing options for small and medium enterprises SME are limited.
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