Democratic Republic of Congo : Reforming Public Enterprises through Improved Governance

The Democratic Republic of Congo (DRC) is endowed with natural resources, in particular for mineral development, and its large agricultural potential is still untapped, having also a considerable percentage of the world's hydroelectric potential. Yet DRC's socioeconomic indicators place the country as among the most deprived in the world. This study first reviews the country's agriculture and infrastructure sectors, to set the grounds for an inclusive private sector. It specifies the private sector has been crowded by the public enterprises taking over the economy, public enterprises which have developed outside their core business, in unrelated activities. These public enterprises are virtually bankrupt with inefficient and loss generating processes, imposing significant fiscal pressures on the state. On reviewing the political transition, the liberalization and stabilization of the economy, as well as restoration of the basis for economic growth, has proved a far-reaching program. Economic, and structural reforms included the areas of trade and prices, financial and business environment, as well as public enterprise reform. The Congolese context, with its history of mismanagement of the public enterprises, and lack of regulatory framework, requires improved governance and performance of companies. In the context of a strategy, public enterprise reform is being implemented within new sectoral policies, through a decision-making process supported by trade unions and independent third parties. These actions should lead to adopting restructuring, and divesting strategies.