DEMOCRATIC REPUBLIC OF CONGO · 2019-06-29 · DRC Democratic Republic of Congo EITI Extractive...
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AFRICAN DEVELOPMENT FUND DEMOCRATIC REPUBLIC OF CONGO FINANCING OF THE PRIVATE SECTOR DEVELOPMENT AND JOB CREATION SUPPORT PROJECT (PADSP-CE) APPRAISAL REPORT OSGE DEPARTMENT May 2015 Public Disclosure Authorized Public Disclosure Authorized
Transcript of DEMOCRATIC REPUBLIC OF CONGO · 2019-06-29 · DRC Democratic Republic of Congo EITI Extractive...
AFRICAN DEVELOPMENT FUND
DEMOCRATIC REPUBLIC OF CONGO
FINANCING OF THE PRIVATE SECTOR DEVELOPMENT AND JOB CREATION SUPPORT PROJECT (PADSP-CE)
APPRAISAL REPORT
OSGE DEPARTMENT May 2015
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TABLE OF CONTENTS
Project Information Sheet .......................................................................................................... ii
Project Summary....................................................................................................................... iii
Results-based Logical Framework............................................................................................. iv
Project Implementation Schedule .............................................................................................. vi
I – Strategic Thrust and Rationale .............................................................................................. 1
1.1. Project Linkages with Country Strategy and Objectives ............................................. 1
1.2. Rationale for Bank’s Involvement ................................................................................ 2
1.3. Aid Coordination .......................................................................................................... 3
II – Project Description ............................................................................................................... 4
2.1. Project Objectives and Components ............................................................................ 4
2.2. Technical Solutions Retained and Other Alternatives Explored.................................. 8
2.3. Project Type ................................................................................................................. 9
2.4. Project Cost and Financing Arrangements ................................................................... 9
2.5. Project’s Target Area and Beneficiaries .................................................................... 10
2.6. Participatory Process for Project Identification, Design and Implementation ........... 11
2.7 Bank Group Experience and Lessons Reflected in Project Design ........................... 11
2.8. Key Performance Indicators ...................................................................................... 12
III – Project Feasibility ............................................................................................................. 13
3.1. Economic Benefits ..................................................................................................... 13
3.2. Environmental and Social Impact .............................................................................. 13
IV – Implementation ................................................................................................................. 14
4.1. Implementation Arrangements ................................................................................... 14
4.2. Monitoring and Evaluation ........................................................................................ 16
4.3. Governance ................................................................................................................ 16
4.4 Sustainability ............................................................................................................. 17
4.5. Risk Management....................................................................................................... 17
4.6. Knowledge Building .................................................................................................. 18
V – Legal Framework ............................................................................................................... 18
5.1. Legal Instrument ........................................................................................................ 18
5.2. Conditions Associated with Bank’s Intervention ..................................................... 18
5.3. Compliance with Bank Policies ................................................................................. 18
VI – RECOMMENDATION .................................................................................................... 18
LIST OF APPENDICES
Appendix I. DRC’s Selected Macroeconomic Indicators ................................................ I
Appendix I-Bis. DRC’s Comparative Socio-Economic Indicators ....................................... II
Appendix II. Table of the Bank’s Portfolio in DRC as at 30/06/13 ............................... IV
Appendix III. Map of the Project Area .............................................................................. V
Appendix IV. Interventions by the Business Climate, PPP, Invt. and Emp. Promotion .....
Inter-Donor Group ................................................................................... VI
Appendix V. Overview of the Informal Sector in DRC .............................................. VIII
Appendix VI. Justification of Counterpart Funding Waiver .............................................. X
Appendix VII. Brief Description of PADSP-CE ............................................................. XIII
LIST OF TABLES
Table 1.1 : Aid Coordination: Thematic Groups and Actors
Table 2.1 : Detailed Description of Activities by Component (in UA thousand)
Table 2.2 : Estimated Project Costs by Component [in UA thousand]
Table 2.3 : Project Sources of Financing [in UA and USD thousand]
Table 2.4.1 : Estimated Project Costs by Expenditure Category [in UA and USD thousand]
Table 2.4.2 : Summary of Estimated Project Costs by Expenditure Category [in UA and USD thousand]
Table 2.5 : Expenditure Schedule by Component [in UA thousand]
Table 3.1 : Monitoring Stages / Feedback Loop
Table 3.2 : Risks and Mitigation Measures
This report was written by A. C. TOTO SAME, Principal PFM Expert, OSGE.1, A. KESSAB, Senior Governance Specialist,
OSGE1, H. TALL, Senior Governance Specialist ORTS, S. KOLOKOTA NGAY-MOKO, Principal Social Development
Specialist CDFO/OSHD, V. LOSSOMBO, Principal Financial Management Specialist, ORPF.2/CDFO, D. MARINI, Senior
Procurement Specialist, ORPF.1/CDFO and, E. NJAMBAL Consultant, Private Sector Development Expert, OSGE
following an appraisal mission to DRC from 23 February to 6 March 2015. The report also benefitted from discussions with
Mr. S. MALIKO, Resident Representative, CDFO. Questions on this report should be referred to Mr. J. MUKETE, Acting
Director, OSGE (Extension 2120), Ms. M. KANGA, Director ORCE, (Extension 2060) and Mr. A. COULIBALY, OIC,
OSGE.1 (Extension 2536).
CURRENCY EQUIVALENTS
March 2015
UA 1 = USD 1.41
USD 1 = UA 0.71054
USD 1 = CDF 925.62
Fiscal Year
1 January to 31 December
Weights and Measures
1 metric tonne = 2204 lbs.
1 kilogramme (kg) = 2.200 lbs.
1 metre (m) = 3.28 feet
1 millimetre (mm) = 0.03937 inches
1 kilometre (km) = 0.62 miles
1 hectare (ha) = 2.471 acres
Km² = square kilometre
m3 = cubic metre
m² = square metre
lm = linear metreer
Mm3 = Million cubic metres
m3/h = cubic metre per hour
l/s = litre per second
l/pers./d = litre per person per day
i
ACRONYMS AND ABBREVIATIONS
Acronym Description
ADF African Development Fund
ANAPI National Investment Promotion Agency
CDFO AfDB Country Office in the Democratic Republic of Congo
CEPI Studies and Industrial Planning Unit
CPCAI Steering Committee for Improvement of the Business Climate and Investments in
the DRC
CSP Country Strategy Paper
DFID Department for International Development
DPSI Industrial Policy and Strategies Paper
DRC Democratic Republic of Congo
EITI Extractive Industries Transparency Initiative
EU European Union
FEC Federation of Enterprises of Congo
FPI Industrial Promotion Fund
GAP II Governance Strategic Framework and Action Plan II
PCG Partners’ Coordination Group
GUCE One-Stop-Shop for Business Registration
ICB International competitive bidding
INPP National Vocational Preparedness Institute
JICA Japan International Cooperation Agency
MET Ministry of Employment and Labour
NCB National competitive bidding
ONEM National Employment Agency
OPEC Congolese Small and Medium-sized Enterprise Promotion Agency
ORCE ADB Regional Department, Center
PAI-STATFIN Statistics and Public Finance Institutional Support Project
PMU Project Management Unit
PPP Public-private partnership
PROCER Job Creation and Income Generation Framework Programme
SME Small and medium-sized enterprises
SMIs Small and medium-sized industries
TFP Technical and Financial Partners
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PROJECT INFORMATION SHEET
DONEE : Democratic Republic of Congo
EXECUTING AGENCY : CEP-PMR-RH at the Ministry of Planning and
Implementation of the Modernity Revolution
Financing Plan
Source Amount (UA) Instrument ADF
38,000,000
Grant
Government 1,264,332
TOTAL COST 39,264,332
Key Financial Information of the AfDB
Loan/Grant currency
Units of Account
Interest* Type NA
Interest Rate Spread* NA
Commitment Charge* NA
Other Charges* NA
Tenor NA
Grace period NA
FRR, NPV (baseline scenario) NA
ERR (baseline scenario) NA
*if applicable
Timeframe – Main Milestones (expected)
Concept Note Approval
February 2015
Project Approval May 2015
Effectiveness June 2015
Last Disbursement June 2019
Completion December 2019
Last Repayment NA
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PROJECT SUMMARY
Project
Overview Despite its economic performance, characterized by the steady acceleration of economic growth and a
sharp fall in inflation since 2009, the DRC is still not able to generate enough jobs. However, over the
last five years, the country has recorded sustained economic growth of approximately 7%. In 2013,
this figure stood at 8.5% in real terms, compared to 7.2% in 2012, before climbing to 8.7% of GDP in
2014. It is projected to attain approximately 10.4% in 2015. However, DRC’s poor business
environment continues to impede private sector development and the creation of productive jobs.
Indeed, despite the country's enormous potential, the private sector is still embryonic. DRC’s current
major challenge is, therefore, to ensure that the economic performance achieved in recent years
contributes to the improvement of living conditions for its citizens and, especially, to the creation of
sustainable jobs through private sector development. Consequently, promoting an inclusive growth
has become an imperative to effectively reduce poverty. The PADSP-CE, for a total amount of UA
39,264,332 million to be implemented over June 2015 to June 2019 period is based on an integrated
and growth-oriented approach. It will enable the country to more effectively tap its economic
potential and stimulate inclusive growth for sustainable employment generation.
Needs
Assessment
The DRC faces the challenge of translating its recent economic performance into opportunities for
private sector development, sustainable job creation, improvement of youth employability and
economic empowerment for women. To that end, promoting inclusive growth is an imperative for
tackling the very high poverty rate in the DRC, where an estimated 70% of the population lives below
the poverty line and the unemployment rate is estimated at approximately 54%, despite the country’s
robust economic growth since 2009. According to the Ministry of Labour, only one million out of 12
million youths of working age are employed in income-generating activities. The unattractive
business climate continues to impede private sector development and the creation of productive jobs.
Obstacles to the creation of sustainable jobs include lack of basic infrastructure, very low human
capital, limited access to financing for SME/SMIs, weak private sector development institutions and
inadequate public-private dialogue.
Target
beneficiaries
The project area is the entire country, with special emphasis on Kasaï Occidental, Kasaï Oriental and
Kinshasa Province. The direct beneficiaries are CPCAI, GUCE, ANAPI, OPEC, INPP, the
PolytechnicFaculty of Lubumbashi, ONEM (the youth), the Ministry of Industry, Ministry of SMEs),
PROCER (women) and the pilot-incubator-nursery initiative under FEC. The indirect beneficiaries
are private sector operators and the end beneficiaries are the entire population of the country.
Bank’s
Comparative
Advantage
and Addedd
The comparative advantages of the Bank and its added-valuein this operation stem from the
experience it has garnered over the years in the design and implementation of institutional capacity-
building projects in fragile States, and especially the DRC, since resuming cooperation in 2002. The
project’s activities are in keeping with the implementation of the GPRSP-2 and the Industrial Policy
and Strategy Paper (DPSI) and therefore, complement those of other partners. The Bank's added
value lies in its integrated and growth-generatingapproach capable of creating a virtuous
dynamic that would act on the essential drivers for the creation of inclusive growth. The first
component will improve the business environment and help to consolidate the conditions conducive
to the emergence of a buoyant private sector; and the second component will help to stimulate
entrepreneurship and production as well as providethe economy with skilled labour necessary for a
strong and inclusive growth.
Knowledge
Building
The project will contribute to institutional development and knowledge-building in the DRC,
especially in the area of private sector development. Knowledge will be acquired through the transfer
of skills from experts and consultants to the staff in beneficiary institutions and businesses, especially
the youth and women. It will also be acquired through the various data and information platforms,
user manuals and several user-training programmes and workshops that will be organized. The
knowledge acquired from this project will also be disseminated within the Bank as a result of rigorous
monitoring/evaluation of expected outputs and achievements, supervision missions and the project
completion report.
iv
Results-based Logical Framework
Country and Project Name: Democratic Republic of Congo – Private Sector Development and Job Creation Support Project (PADSP-CE) Project Goal: The project’s overall goal is toto promote private sector development and entrepreneurship for inclusive and sustainable employment-creating growth
RESULTS CHAIN PERFORMANCE INDICATORS MEANS OF VERIFICATION RISKS/
MITIGATIONMEASURES
Indicator (including ISCs) Baseline Situation Target
IMP
AC
T
A dynamic private sector that
creates sustainable
employment
Private investment rate (% of GDP) 15.3% in 2014 22% in 2020 Min. of Finance/IMF Risk 1:
- Sociopolitical- Insecurity and
political instability.
Mitigation measure 1.
- Commitment of the country
and the international
community to continue
consolidating national peace
and security.
Risk 2:
- Reversibility of the
Government’s commitment to
pursue structural reforms.
Mitigation Measure 2:
- Reaffirmation of the
Government’s commitment to
continue the process of
modernizing the economy.
Risk 3:
- Limited human resources in
the structures benefitting from
the project to ensure efficient
implementation of selected
activities
.
Mitigation Measure 3:
Growth rate (as % of GDP) 8.7% in 2014 9.5% in 2020 Min. of Finance
OU
TC
OM
ES
The capacity of private sector
development and business
climate improvement support
structures is developed.
Doing Business 183rd out of 189 in 2014
(Ratio 0.968)
170th out of 189 in 2019
(Ratio 0.947) Doing Business
Number of new SMEs registered (since
creation of the One-Stop-Shop- 2013)
7100 in 2014 45,000 in 2019 CPCAI / One-stop-shop
The level of industrialization of
the economy is reinforced to
generate sustainable jobs
Share of the manufacturing industry, as
% of GDP 4.5 % in 2013 10 % in 2019 Min. of Finance
Number of jobs created
- Including women 13.552 in 2013
5%
30,000 in 2019
30% MET
OU
TP
UT
S
Component I: Consolidation of business climate improvement and private sector development institutions
Output I.1: Capacity-
building for business climate
improvement institutions
(one-stop-shop, CPCAI)
I.1.1. One-stop-shop in Lubumbashi,
Kananga, Mbuji-Mayi, Goma, Matadi,
Kisangani and Kinshasa-Est
No one-stop-shop in the
localities mentioned(2014)
1x one stop-shop per
locality mentioned
mentioned (2017) Project Unit reports
I.1.2. Number of Kinshasa one-stop-
shop employees trained 12 (2014)
100% of employees
(2019) Project Unit reports
1.1.3. Number of studies conducted by
CPCAI 3 (2014) 10 (2019) Project Unit reports
Output I.2: Capacity-
building for private sector
promotion institutions
(ANAPI, FPI, OPEC, PPP,
Ministry of Industry and
SMEs, Ministry of Gender)
1.2.1. Number of sector registers
published (ANAPI) 1 (2014) 5 (2019) Project Unit reports
1.2.2. Setting-up of PPP unit PPP unit does not exist (2014) PPP unit is set up (2007) Project Unit reports
1.2.3. Availability of a national PPP
development strategy The strategy does not exist
(2014) Strategy is formulated
(2017) Project Unit reports
I. 2.4. Number of employees trained
(OPEC) 22 (2014) 100 (2016) Project Unit reports
1.2.5. Number of employees trained
(Min. of SMEs) 31 (2014) 100 (2016) Project Unit reports
v
1.2.6. Availability of a national SME
development strategy The strategy does not exist
(2014) Strategy is formulated
(2017) Project Unit reports
- The intervention of high-level
experts to ensure training and
transfer of knowledge in these
structures will mitigate this risk
in the beneficiary structures.
Component II: Encourage the emergence of the private sector for sustained growth that generates sustainable jobs
Output II.1: Promote
business nurseries and
incubators (FEC, FEC
Women, and economic
empowerment for PROCER
women)
II.1.1. Number of SMEs benefitting
from FEC facilities No SME benefits from these
facilities (2014) 100 SMEs benefit from
the facilities (2017) Project Unit reports
Including SMEs managed by women 0 (2014) 40 (2017)
II.1.2. Number of female entrepreneurs
trained (FEC women) 52 (2014) 300 (2017) Project Unit reports
II.1.3. Number of women benefitting
from PROCER support 200 (2014) 9000 (2017) PROCER reports
Output II.2: Encourage the
emergence of a pool of
expertise to support growth
and the employability of
youths and women (Min. of
Higher Education, INPP)
II.2.1. Number of youths trained by
INPP Kinshasa 8000 (2014) 20000 (2019)
Project Unit reports
Including trained women 1000 (2014) 8000 women (2019) Project Unit reports
II.2.2. Number of young graduates
absorbed into business by ONEM Including 30% women.
250 (2014)
52 (2014)
10000 (2018)
3000 women (2018) ONEM reports
II.2.3. Number of youths trained at the
Lubumbashi Polytechnique 136 (2014) 931 (2019) Project Unit reports
Including trained women 26 (2014) 300 (2019)
KE
Y A
CT
IVIT
IES COMPONENTS
Component 1. Consolidation of the business environment and private sector promotion and support institutions. Capacity-building
for the One-Stop-Shop and creation of new one-stop-shops in the provinces; capacity-building for CPCAI; capacity-building for
ANAPI, FPI, OPEC, Ministry of SMEs, Ministry of Industry.
Component 2. Encourage the emergence of the private sector for sustained growth that generates sustainable jobs
Establishment of pilot business incubators and nurseries through FEC, training of business women (FEC women), support to
PROCER, INPP and ONEM.
Component 3. Efficient project management: This mainly entails the equipment and functioning of the Project Management Unit
This component will also be responsible for coordinating the recruitment of the external auditor.
vi
ESTIMATED PROJECT IMPLEMENTATION SCHEDULE
Years
Activities / Months J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J J F M A M J J A S O N D
Prior to Start-Up
Board Presentation
Grant Effectiveness
Establishment of Project Team
Establishment of PSC
Project Launching Mission
Works
Bidding for Works
Rehabilitation of ANAPI, OPEC,
CEPI
Fitting-out Works on ANAPI,
OPEC, CEPI
Equipment and Supplies
Bidding for Comp. Office Aut. &
Lab. Equipment
Procurement of Software
Bidding for Transport Equipment
Bidding for Other Equipment
Delivery of Goods and Start-Up
Consultants
Prep. of RFP and Est. of Shortlists
Invit. To Sub. Prop, opening of prop.,
no-objection analysis and award.,
Consulting Services
Strengthening of OPEC
Strengthening of SME Ministry
CNFE/FEC Training
Strengthening of ANAPI, CPCAI
and GUCE
Other Training Sessions
PROCER, ONEM, INPP, OPEC
Training
Operating Expenditure
Mid-Term Review
Monitoring-Evaluation
Steering Committee Meeting
Audit
Annual Audit of Accounts
20192015 2016 2017 2018
1
REPORT AND RECOMMENDATIONS OF MANAGEMENT TO THE BOARD OF
DIRECTORS REGARDING A PROPOSAL FOR A GRANT TO THE DEMOCRATIC
REPUBLIC OF CONGO (DRC) TO FINANCE THE PRIVATE SECTOR DEVELOPMENT AND
JOB CREATION SUPPORT PROJECT (PADSP-CE)
This proposal submitted to the Board for approval relates to the award of an ADF grant of UA 38
million to the Democratic Republic of Congo (DRC) to finance the Private Sector Development and Job
Creation Support Project (PADSP-CE). This is an institutional support operation which will be
implemented over the 2015-2019 period. The project aims to foster private sector development and
entrepreneurship in order to achieve inclusive growth that will create sustainable jobs.
I. STRATEGIC THRUST AND RATIONALE
1.1. Project Linkages with Country Strategy and Objectives
1.1.1 The PADSP-CE is consistent with the DRC’s Growth and Poverty Reduction Strategy Paper
(2011-2015 GPRSP) which focuses on four main pillars, namely: (i) strengthening governance and
peace-building; (ii) diversifying the economy, accelerating growth and promoting employment; (iii)
improving access to basic social services and strengthening human capital; and (iv) protecting the
environment and fighting against climate change. The project is in line with Pillar II of the
Government’s 2011-2015 GPRSP, namely: diversifying the economy, accelerating growth and
promoting employment. The project will also have an impact on Pillar III of the 2011-2015 GPRSP by
improving youth employability and promoting the economic empowerment of women. It is also in
keeping with the national policy on gender mainstreaming, promotion of the family and child protection
in the DRC. Furthermore, it is consistent with the DRC’s Industrial Policy and Strategies Paper (DPSI)
which, through its various pillars, seeks to ensure the emergence of an industrialized, diversified,
productive and competitive economy that is fully integrated into the regional and international trade
process, based on the significant development of the country’s national resources and potential by
fostering the establishment of modern, citizen-oriented, environmentally-friendly industries that will
guarantee sustainable development.
1.1.2 Moreover, the project is consistent with the priorities of the Bank's 2013-2017 Country
Strategy Paper (CSP) whose Pillar I aims to support private investment through the establishment of a
high quality infrastructure platform for inclusive growth; and Pillar II focuses on building central
government capacity in order to increase public revenue and create an incentive framework for private
investment. PADSP-CE covers the two complementary pillars of the CSP by building central
government capacity to establish an incentive framework and an enabling environment for private sector
and infrastructure development infrastructure through public-private partnerships. It also addresses the
priorities retained in the Bank’s 2013-2017 private sector development strategy. It is fully in keeping
with the AfDB’s 2013-2022 Ten-Year Strategy on supporting the economic transformation of Africa.
The PADSP-CE is also consistent with Pillar III (“Investment and business climate”) of the Governance
Strategic Framework and Action Plan for 2014-2018 (GAP II). Finally, it is in line with the Bank's
gender strategy (2014-2018) "Investing in Gender Equality for Africa’s Transformation" and
covers the three pillars of the strategy namely: Pillar 1: Legal status and property rights. The strategy
considers the legal status of women and their property rights as the cornerstones of inclusive growth and
gender equality; Pillar II “Economic empowerment” and Pillar III “Knowledge management and
capacity building”.
2
1.2. Rationale for Bank’s Involvement
1.2.1 The DRC is still a fragile State emerging from a period of political and economic
instability lasting for over two decades. The country is still faced with rebellions that threaten the
peace process, weaken central government capacity and authority, further undermine economic and
financial governance and thwart the efficient implementation of national economic and social policies.
The DRC is faced with multifaceted economic and structural factors of fragility which affect its
institutional, security, political and socio-economic environment. However, it should be noted that the
country has recorded outstanding economic performances since 2009 and its medium-and long-term
growth prospects are encouraging.
1.2.2 Despite its economic performance, characterized by the steady acceleration of economic
growth and a sharp fall in inflation since 2009, the DRC is still not able to create enough jobs,
mainly because of the nature of its economic growth which is driven by the mining sector. Over
the last five years, the country has achieved sustained growth of about 7%. In 2013, this figure stood at
8.5% in real terms, compared to 7.2 % in 2012, before climbing to 8.7% of GDP in 2014 and is
projected to reach 10.4% in 2015. This growth remains driven by the mining sector, and in particular
copper production which rose by 52% in volume in 2013. Furthermore, several mining companies have
moved from the exploration phase to the operational phase since 2013. The trade and construction
sectors have also performed well. Inflation has fallen to a historical low. It stood at less than 2% in
2014, compared to a forecast of 3.7% and was down to 1% at end-December 2013, compared to 9.7% in
2012 and 15.3% in 2011 as a result of a tight fiscal policy, the control of monetary aggregates and the
absence of major shocks on import prices. However, this economic performance was not accompanied
by the creation of sufficient jobs to sustainably reduce poverty.
1.2.3 The private sector remains embryonic despite the country’s enormous potential in the
mining sector and in agriculture, with its fertile soils and heavy rainfall. The private sector is
primarily composed of often informal, small and medium-sized enterprises.1 According to the 1-2-3
National Survey "Democratic Republic of Congo (2004-2005), Phase 2", SME/SMIs account for 80% of
the national industrial fabric. They operate in all sectors of the economy, but chiefly in trade (47%),
agriculture (22%), small-scale processing (19%) and services (11%), in urban areas. It also comprises a
limited number of large companies belonging to multinational groups, several of which operate in the
mining and telecommunications sectors. Moreover, parastatal enterprises dominate a significant segment
of the DRC economy. Consequently, the State remains the leading employer in the DRC and the private
investment rate only represented 15.3% of GDP in 2014. Since 2007, pursuant to the law on State
divestment from productive sectors, the State has identified 14 priority enterprises within its total
portfolio of 53 public enterprises and 65 parastatal enterprises. Most of the 14 identified priority
corporations were from the basic infrastructure sector, and had to be reformed and transformed into
commercial companies with a view to improving the quality of services and their productivity through
greater private sector involvement. These enterprises transformed into commercial companies thus
provided investment opportunities under public-private partnership (PPP) arrangements. Currently, the
process has stalled due, inter alia, to the absence of a legal and institutional framework governing PPPs.
It is, therefore, essential to revive it through the promotion of a sound public-private partnership
(PPP) in order to close the basic socio-economic infrastructure gap.
1.2.4 Significant strides have been made in improving the business environment. Transaction
procedures and costs were streamlined by: (i) reducing the time to start a business to 3 days, from over
150 days and guaranteeing the issuance of building permits; (ii) establishing a one-stop-shop for
business registration; (iii) establishing a one-stop-shop for customs formalities; (iv) reducing the number
corporate taxes from 118 to 30; and (iv) operationalizing commercial courts in order to simplify the
execution of contracts and settlement of trade disputes. The DRC also joined OHADA in July 2012,
which is a significant step towards better protection of investors. Nevertheless, according to a study on
1 See monograph on the informal sector in Appendix V.
3
investment constraints in the DRC conducted by the World Bank in 2012, the business environment has
very few incentives. Moreover, there are persistent constraints to the introduction of more private
sector investments in the productive sectors. Many obstacles still impede private sector development.
Moreover, it is essential to continue with Government efforts to consolidate the business environment
and promote inclusive growth that creates sustainable jobs.
1.2.5 The current major challenge for the DRC is to succeed in ensuring that the economic
performance achieved in recent years contributes to the improvement of living conditions for its
citizens and, especially, to the creation of sustainable jobs through private sector development. The
poor business climate continues to impede private sector development and the creation of productive
jobs. Obstacles to the creation of sustainable jobs include a basic infrastructure deficit, very low human
capital, limited access to financing2 for SME/SMIs, weak private sector development institutions and
inadequate public-private dialogue. It is essential to promote inclusive growth in order to tackle the
very high poverty rate in the DRC. Approximately 70%3 of the population lives below the poverty line
and the unemployment rate is estimated at approximately 54%, despite the strong economic growth
recorded since 2009. The Ministry of Labour estimates that out of the 12 million youths of working age,
only 1 million are employed in income-generating activities. With regard to gender, despite a statutory
framework that favours women in the DRC, there are still inequalities in female participation in
decision-making. Women represent about 52% of the population but are under-represented in decision-
making bodies. Legal, cultural, political, economic and historical obstacles continue to block the
emergence of female leadership. PADSP-CE, through an integrated and growth-generating
approach4 will continue to help the country to tap its economic potential more effectively in order to
generate inclusive growth that will create sustainable jobs. To that end, it will seek to improve the
business environment, build the capacity of structures that support private sector development and
especially SME/SMIs, which are the key drivers for massive job creation, improvement of youth
employability and promotion of entrepreneurship.
1.3. Aid Coordination
1.3.1 Aid coordination plays an important role in a country like DRC whose external aid needs
are immense in view of the challenges it must address. Such coordination is absolutely necessary to
create synergies and take advantage of complementarities between development partners, with a view to
helping the country to effectively address these challenges. Aid is currently coordinated through
consultative thematic groups that comprise the public sector, civil society and TFPs. These groups meet
regularly to monitor and evaluate reform implementation.
1.3.2 TFP coordination in the DRC has improved significantly in recent years. Indeed, since
2009, efforts have been made to ensure greater harmonization of TFP operations. These efforts led to the
creation of the Partners Coordination Group (PCG) in June 2012, of which the Bank is a member. The
Bank’s Country Office in Kinshasa maintains close ties with the authorities and other TFPs on the main
national themes targeted by official development assistance. Apart from joint portfolio reviews with the
World Bank, the Bank conducts joint field missions especially with TFPs operating in the same sectors.
With regard to the business environment and promotion of the private sector, donor coordination is
effected mainly through regular meetings of the “Business climate, PPP, investment and employment
promotion” thematic group, of which DFID is the lead donor, under the aegis of the Ministry of
Planning, and in which the AfDB country office is very active.
2 The issue of access to financing is addressed by a World Bank project and a DFID project.
3 Growth and Poverty Reduction Strategy Paper (GPRSP-2).
4 Indeed, PADSP-CE, given its multidimensional nature, will help to maximize synergies between the various socio-
economic dimensions of the country which contribute to the generation of inclusive growth.
4
Table 1.1
Aid Coordination: Thematic Groups and Stakeholders THEMATIC WORKING GROUP LEAD DONOR Security (army & police) EDSEC & EDPOL Justice and human rights European Union Local governance and decentralization UNDP Economic governance and public finance European Union Elections and parliament UNDP Business climate, private sector and PPP DFID Media and culture French Embassy Infrastructure AfDB Statistics, prospective studies and energy AfDB Community dynamics and vocational training Japan – JICA
Source: DRC Government
1.3.3 PADSP-CE complements the projects of other partners and particularly DFID, which
approved an allocation of GBP 100 million for the DRC over a five-year period (2014-2019) to
stimulate private sector development (PSD) in the DRC. GBP 35 million from this programme will be
channelled through a flexible mechanism that will ensure the design and implementation of operations
on: (i) business climate reforms; (ii) improvement of financial intermediation; and (iii) corruption
control, according to needs. The project alsocomplements the activities of the Japan International
Cooperation Agency (JICA) in the area of vocational training and especially its support to INPP
amounting to USD 24 million, and also those of the EU and the World Bank which are active in private
sector development support and access to financing for SMEs. During the preparation of this
institutional support, the Bank team met with the main technical and financial partners in order to
reinforce the synergies which could be developed in this operation.
II. PROJECT DESCRIPTION
2.1. Project Objectives and Components
2.1.1 The project’s overall objective is to to promote private sector development and
entrepreneurship for inclusive growth that will generate sustainable jobs. The project’s specific
objective is to foster the emergence of SME/SMIs, youth employability and the economic
empowerment of women by promoting very small enterprises managed by women.
2.1.2 Project components: The project has the following three complementary components: (i)
consolidate the business climate and the institutions which promote and support the private sector; (ii)
encourage private sector development to foster sustained growth that generates sustainable jobs; and (iii)
support efficient management of the project.
2.1.3 Detailed Project Description:5 PADSP-CE is an integrated and growth-generating
initiative which, combined with other actions of the Government, could create a virtuous dynamics
and act on the main drivers of inclusive growth. Indeed, the multidimensional character of the project
helps to maximize synergies between the various structures of the country that contribute to the
emergence of inclusive growth. Its first component will improve the business environment and
consolidate the conditions that are conducive to the emergence of a buoyant private sector. Meanwhile,
its second component will help to stimulate entrepreneurship and production as well as provide the
economy with skilled labour for inclusive growth. Finally, the third component will guarantee the
efficient implementation of the project.
5 See Appendix VI – Summary description of the project and detailed technical annexes.
5
Component I: Consolidation of the business environment and private sector promotion and
support institutions.
Sub-Component I.A – Continue with the efforts initiated to consolidate the business
climate
2.1.4.1 Essentially, this entails continuing with the efforts initiated by the Government to further
improve the business climate by consolidating the operationalization of the Kinshasa one-stop-shop for
business registration (GUCE) and its replication to begin with, in some provinces of the country. It will
also entail building the capacity of CPCAI and supporting the implementation of its action plan to
improve the business environment.
Sub-Component I.B – Assistance to private sector support and promotion structures
2.1.4.2 This mainly entails consolidating private sector support and promotion structures, finding
adequate solutions to close infrastructure gap to support the economy through PPPs; and capacity-
building, especially for the structures and institutions that support private sector development in the
DRC (ANAPI, OPEC and the Ministry of SMEs) so that they can provide better services and foster
private sector development. These structures currently find it difficult fulfil their missions, (to say the
least) because they have exceptionally weak capacity and, above all, lack the most basic equipment to
support and guide SMI/SMEs.
Key expected outcomes of Component I – the main results are described in the
logical framework. These are essentially to build the capacity of private sector
development support structures and contribute to the improvement of the business
environment, and especially ensure that: (i) the GUCE is rolled out in some provinces of
the country; (ii) the capacities of 11 CPCAI units are built up; (iii) operationalization of
the Kinshasa One-Stop-Shop is consolidated; (iv) the PPP Central Unit is established and
operational; (v) the capacity of OPEC is significantly developed to ensure that it is able to
fulfill its mission; and finally (vi) the National Development Strategy of SMEs is
prepared and adopted by the Government.
2.1.5 Component II: Encourage private sector emergence for sustained growth that will create
sustainable jobs
Sub-Component II.A – Encourage the emergence of a pool of expertise to support
growth and youth employability
2.1.5.1 According to the International Labour Organization (ILO), over 65% of the DRC population is
under the age of 25 years, and those in the 15-24 year age group represent 20% of the national
population. The number of youths was approximately 15 million in 2001, representing 52.77% of the
labour force, and is projected to rise to 38 million by 2025. It is, therefore, urgent and necessary to
promote youth employability in the DRC by providing significant capacity-building to the
National Vocational Preparedness Institute (INPP). This activity will foster the emergence of a
skilled labour force which will drive the development of the private sector and especially of the mining
sector by creating a pool of expertise and improving youth employability through capacity-building for
INPP and support to ONEM. To that end, the project will support investments in teaching material and
equipment to build the capacity of INPP, ONEM as well as the capacity of the Polytechnic Faculty of
Lubumbashi in the mining sector with a view to developing “mining sector local content”. The project
will also help to improve synergy between INPP and ONEM.
6
Sub-Component II.B - Support to the development of SMEs/SMIs through the
promotion of business incubators and nurseries and the economic empowerment of
women.
2.1.5.2 This entails supporting business development through the promotion of SME/SMIs and
especially the small-scale manufacturing industry which is the key driver for large-scale job creation. To
that end, PADSP-CE will support the establishment of incubators and nurseries, especially in the timber
industry to ensure that timber processing value-added becomes a priority in the DRC, as well as in fish
farming. It will also provide substantial support to the economic empowerment of women through two
components: (i) broad-based support to the Job Creation and Income Generation Framework Programme
for women (PROCER) whose beneficiaries will increase from 200 women in 2014 to 9000 before 2019
through the support provided to very small enterprises managed by women; and (ii) training of 300
women entrepreneurs in the 11 provinces of the country through the association of female heads of
businesses of the DRC.
The main expected results of Component 2, which seeks to foster the emergence of a
vibrant private sector with a view to achieving lasting growth that will create
sustainable jobs, are: (i) support given to 9000 women managers of very small
enterprises and 9000 direct jobs created; (ii) 10,000 young graduates without professional
experience are absorbed into enterprises; (iii) a pilot business incubator-nursery in fish
farming is operational; (iv) a pilot incubator-nursery in timber processing is operational;
(v) 300 women entrepreneurs in the 11 provinces are trained; (vi) INPP is provided with
modern equipment to improve youth employability; and finally (vii) the Polytechnic
Faculty in Lubumbashi is provided with modern equipment to promote "local content" in
the mining sector by developing expertise that will foster the emergence of entrepreneurs
and consequently the development of local content in the mining sector value-added
chain.
2.1.6 Component 3: Project Management and Coordination
Management and Coordination of Project Implementation: The project will be placed
under the oversight of the Ministry of Planning and Implementation of the Modernity
Revolution. For reasons of efficiency, the management unit of the Project to Modernize
and Revitalize Public Administration Human Resources (PMR-RH) at the Ministry of
Planning and Implementation of the Modernity Revolution is the coordination and
executing agency for PADSP-CE. Given the multi-sector nature of the project, a steering
committee, chaired by the Ministry of Planning and Implementation of the Modernity
Revolution, will be set up and be composed of heads of the structures involved in the
implementation of the project activities. This committee will be responsible for assessing
the technical and financial implementation of the project and provide guidance to ensure
the timely attainment of the project objectives.
The activities of Component 3 are: (i) implementation of a computerized system for the
accounting and financial management of the project based on an updated Procedures
Manual; (ii) establishment of the monitoring-evaluation system of the project; (iii)
preparation and regular submission of technical and financial reports; (iv) the
organization and regular attendance of project coordination meetings; and (v)
coordination of the annual audit of project accounts.
7
Table 2.1
Detailed Description of Activities by Component (in UA million) Component I: Consolidation of the business environment and private sector promotion and support institutions.
No. Project Sub-
Component
Estimated
Cost
(in UA
thousand)
Description of sub-components
I.A.
Continue with efforts
initiated to
consolidate the
business climate
(CPCAI and GUCE)
4,631,734
Continue the establishment and opening of one-stop-shops
(GUCE) in the provinces (Matadi, Kisangani and Lubumbashi
Goma and Kinshasa-Est, Kananga and Mbuji-Mayi)
Capacity-building for the 11 provincial units of CPCAI
Amend the family code by building the capacity of women
entrepreneurs to allow them more leeway in the management
of their businesses
Capacity-building for the organs involved in the liquidation of
companies
Capacity-building for CPCAI Kinshasa through continuing
training
Consolidation of the operationalization of the Kinshasa Single
Window
I.B.
Assistance to
structures that
support and promote
the private sector
(ANAPI, OPEC and
the Ministry of
Industry and SMEs)
8,261,741
Support for the establishment of the PPP Central Unit: (i)
Study for the preparation of the national PPP development
strategy; (ii) Support for the adoption of legal and regulatory
framework governing PPPs; and (iii) Capacity-building for the
PPP central unit.
Capacity-building for the National Investment Promotion
Agency (ANAPI) and opening of two branches in Kasaï
Occidental (Kananga) and Kasaï Oriental (Mbuji-Mayi) Operational capacity-building for the Small and Medium-sized
Enterprises Promotion Agency in the DRC (OPEC). PADSP-
CE will provide support for: (i) a feasibility study on the
establishment and development of business incubators in each
province depending on its economic potential; (ii) the
envisaged development of SMEs/SMIs, comprising an
upgrade programme for SME operators in the DRC, including
guidance, technical advice and technologies; (iii) institutional
capacity-building for OPEC; and finally (vi) technical
assistance.
Institutional capacity-building for the Ministry of Industry and
SMEs, through: (i) the provision of equipment and technical
assistance; (ii) support for the establishment of an SME
database; and (iii) preparation of the National SME
Development Strategy and technical assistance.
Component II: Foster the emergence of the private sector for lasting growth that will create sustainable jobs
No. Project Sub-
component
Estimated
Cost
UA thousand Description of sub-components
II.A.
Foster the emergence of
a skilled labour force
and youth employability
(INPP,
Polytechnic of
Lubumbashi and
ONEM)
13,631,828
Capacity-building for the National Vocational
Preparedness Institute (INPP) by providing (i) modern
teaching aids and equipment for vocational training
(equipment of 11 laboratories selected by INPP at the
request of enterprises): (1) refrigerationand air-
conditioning laboratory; (2) electronics laboratory; (3)
electromechanical laboratory; (4) telecommunications
laboratory; (5) civil engineering and construction
laboratory; (6) hydraulics and pneumatics laboratory; (7)
induustrial automation laboratory; (8) mechanical
manufacturing workshop; (9) welding and metal workshop
(MIG, TIG and MAG); (10) motor mechanics workshop;
8
(11) motor electricity/electronics workshop; and (ii) for
training of trainers:
Support for the development of local content in the mining
sector through capacity-building for the industrial
chemistry, mining, metallurgy and electromechanics
departments of the Polytechnic Faculty of Lubumbashi
through provision of modern laboratory equipment.
Institutional capacity-building for the National
Employment Agency (ONEM) and implementation
support for the Graduate Employment Programme (PED),
targeting 10000 young graduates who are first-time job-
seekers without any professional experience.
II.B.
Support to the
development of
SMEs/SMIs through the
promotion of business
incubators and nurseries
and the economic
empowerment of
women (PROCER)
UA 8,174,109
Support for the development of SMEs/SMIs through the
establishment of (i) the pilot business incubator-nursery in
fish farming; and (ii) the pilot business incubator-nursery
in timber processing
Training of 300 women entrepreneurs in the 11 provinces
through the association of DRC female heads of
businesses (CNFE/FEC)
Support to the Job Creation and Income Generation
Framework Programme (PROCER) to boost the economic
empowerment of women in the provinces of Kinshasa,
Kasaï Occidental and Kasaï Oriental: (i) capacity-
building for the Employment Promotion Technical
Secretariat to provide it with the resources to
implementPROCER more efficiently; and (ii)
reinforcement of PROCER field activities by enhancing
the economic empowerment of 9000 women and
promoting the micro enterprises managed by women
Component III
Project Management and Coordination No. Project Sub-
Component Estimated
Cost
Description of sub-components
III Project management
and coordination 2.342.411
Support to programme implementation
Project audit
2.2. Technical Solutions Retained and Alternative Solutions Explored
2.2.1 The technical solution retained under this project was presented in paragraphs 2.1.1, 2.1.2,
2.1.3, 2.1.4 and 2.1.5 ( 2011 2015 GPRSP). The country’s GPRSP-2 clearly identifies the major
obstacles to poverty reduction in the DRC and proposes a set of coherent measures which should lead to
economic diversification, growth acceleration and the promotion of employment. The problems which
impeding the country’s economic development are confirmed by the 2013-2017 CSP which
highlights the main constraints to the DRC’s development process, and which relate to: (i) infrastructure
services gap; (ii) poor quality of governance and a lack of institutional capacity; and (iii) an unfriendly
business environment. These same constraints were raised in the DRC’s Industrial Policy and Strategy
Paper (DPSI) which, through its different pillars, seeks to ensure the emergence of an industrialized,
diversified, productive and competitive economy that is fully integrated into the regional and
international trade process, based on the significant development of the country’s national resources and
potential by fostering the establishment of modern, citizen-oriented, environmentally-friendly industries
that will guarantee sustainable development . Since the project contributes to the improvement of the
business environment and private sector development, it targets the entire country, with emphasis on the
Centre Zone in line with the Bank’s priorities unde the CSP 2013-2017. The PADSP-CE, with its
integrated and growth-generating approach, falls within this context. In light of the foregoing, no
alternative solutions were considered.
9
2.3. Project Type
This is an institutional support project financed by an ADF grant. Preference was given to this type of
operation in order to continue providing vital support aimed at capitalizing on the achievements of
previous projects and programmes, especially the PAIM6 project, also initiated by the Bank in 2002 to
improve the institutional and regulatory framework for private sector development with a view to
generating inclusive growth that will create sustainable jobs. PADS-CE was also designed to
complement the projects implemented by DFID, World Bank, JICA and other donors (see § 1.3.3.).
2.4. Project Cost and Financing Arrangements
The total project cost, net of taxes and customs duties, is estimated at UA 39,264,332 million. The ADF
will contribute UA 38 million and the Government will make a contribution in kind equivalent to about
UA 1,264,332 million, or 3% of the total project cost. It should be noted that the DRC meets the requisite
criteria for a waiver that can lower its contribution to0%, pursuant to the provisions of paragraph 4.2.2 of
the Policy on Expenditure Eligible for Bank Group Financing: ADB/BD/2007/106/Rev.1, revised version
of 19 March 2008. The three key criteria retained under this provision are: the country’s commitment to
implement its overall development program; the financing allocated by the country to sectors targeted by
Bank assistance; and the country’s budget situation and debt level. See Appendix VI: Justification for
waiver of national counterpart contribution.
Table 2.2
Estimated Project Cost by Component (in UA thousand)
Components Costs in USD Costs in UA
As % F.E. L.C. Total F.E. L.C. Total
Component I: Consolidation of the
business environment and private
sector promotion and support
institutions.
12 476 601 5 703 199 18 179 800 8 848 653 4 044 822 12 893 475 33%
Component II: Foster the emergence
of the private sector for sustained
growth that will generate sustainable
jobs
14 188 483 13 857
887 28 046 370 10 062 754
11 743
182 21 805 936 56%
Component III: Project management
and coordination 1 098 200 2 204 600 3 302 800 778 865 1 563 546 2 342 411 6%
Total baseline cost 27 763 284 21 765
686 49 528 970 19 690 272
17 351
550 37 041 823 94%
Provision for physical contingencies
(4%) 1 110 531 870 627 1 981 159 787 611 694 062 1 481 673 4%
Provision for price escalation (2%) 555 266 435 314 990 579 393 805 347 031 740 836 2%
Total project cost 29 429 081 23 071
627 52 500 708 20 871 689
18 392
643 39 264 332 100%
Table 2.3
Sources of Financing (in USD and UA million)
Sources of Financing F.E. costs in UA L.C. Costs in UA Total costs in UA As %
ADF 19 690 272 16 158 784 35 849 057 91%
Government 0 1 192 766 1 192 766 3%
Project Base Cost 19 690 272 17 351 550 37 041 823 94%
Contingencies and inflation 1 181 416 1 041 093 2 222 509 6%
Total Project Cost 20 871 689 18 392 643 39 264 332 100%
6 Multisector Institutional Support Project.
10
Table 2.4.1
Estimated Costby Expenditure Category (in USD and UA thousand)
ADF GVT Expenditure Categories F.E. Local
currency F.E. Local
currency Total cost %
1. Works 358 298 974 326 0 0 1 332 624 3%
2. Goods 11 397 322 979 438 0 0 12 376 760 32%
3. Services 6 658 057 939 890 0 0 7 597 947 19%
4. Operation 42 553 7 557 187 0 1 192 766 7 599 740 19%
5. Training 1 234 043 4 985 816 0 0 6 219 858 16%
6. Others 0 1 914 894 0 0 1 914 894 5%
Total base cost 19 690 272 17 351 550 0 1 192 766 37 041 823 94%
Provision for contingencies and
inflation (6%) 1 181 416 1 041 093 0 71 566 2 222 509 6%
Total project cost 20 871 689 18 392 643 0 1 264 332 39 264 332 100%
Table 2.4.2
Summary of Estimated Cost by Expenditure Category (in UA thousand)
ADF
Expenditure Categories F.E. Local currency Total cost %
1. Works 358 298 974 326 1 332 624 4%
2. Goods 11 397 322 979 438 12 376 760 33%
3. Services 6 658 057 939 890 7 597 947 20%
4. Operation 42 553 6 364 421 6 406 974 17%
5. Training 1 234 043 4 985 816 6 219 858 16%
6. Others 0 1 914 894 1 914 894 5%
Total base cost 19 690 272 16 158 784 35 849 057 94%
Provision for contingencies and inflation
(6%) 1 181 416 969 527 2 150 943 6%
Total cost of contributions(ADF) 20 871 688.68 17 128 311.32 38 000 000,00 100%
Table 2.5
Expenditure Schedule by Component (in USD and UA thousand) Components 2015 2016 2017 2018 2019 Total
Component I: Consolidation of the
business environment and private
sector promotion and support
institutions.
1 031 478 3 223 369 4 512 716 2 578 695 1 547 217 12 893 475
Component II: Foster the emergence
of the private sector for sustained
growth that will create sustainable jobs 1 744 475 5 451 484 7 632 078 4 361 187 2 616 712 21 805 936
Component III: Project management
and coordination 50 355 769 504 507 518 507 518 507 518 2 342 411
Project base cost 2 826 308 9 444 356 12 652 312 7 447 400 4 671 447 37 041 823
Contingencies and inflation 169 578 566 661 759 139 446 844 280 287 2 222 509
Total 2 995 886 10 011 018 13 411 450 7 894 244 4 951 734 39 264 332
As % of total project costs 8% 25% 34% 20% 13% 100%
2.5. Project’s Target Area and Beneficiaries
Target beneficiaries: The beneficiary project area is the entire country, with special emphasis on the
Centre Zone, Kasaï Occidental, Kasaï Oriental where two one-stop-shops will be established and direct
support provided to 2000 female managers of very small enterprises, and Kinshasa province. The direct
beneficiaries of the institutional support are 10000 youths, CPCAI, GUCE, ANAPI, OPEC, INPP,
11
Polytechnic Faculty of Lubumbashi, ONEM, Ministry of Industry, Ministry of SMEs, PROCER and
Congolese SMEs/SMIs through the pilot business incubators-nurseries approach.The indirect
beneficiaries are private sector operators. Furthermore, the end beneficiaries of the project are the entire
population of the country, which will benefit from the improvement in living conditions made possible
by inclusive growth that will create sustainable private sector jobs. This project will also help to build
professional capacity and the employability of youths and women to enable them to take up skilled posts
or become self-employed to improve living standards for themselves and their families.
2.6. Participatory Process for Project Identification, Design and Implementation
During the project identification and preparation phases, a consultative process was carried out involving
discussions between the Bank and stakeholders. These were authorities at the highest level of the core
ministries – which attests to the interest and enthusiasm generated by PADSP-CE – (namely, the Office
of the DeputyPrime Minister and Ministry of Employment, Labour and Social Welfare; Ministry of
Finance; Ministry of Planning and Implementation of the Modernity Revolution; Ministry of Gender,
Family and Children's Affairs; Ministry of Small and Medium-sized Enterprises and the Middle Class;
Ministry of Industry), CPCAI, GUCE, ANAPI, OPEC, INPP, ONEM, PROCER and FEC. These
consultations continued during the appraisal mission with all partners. The mission consulted with
beneficiary institutions during project formulation. It met with civil society organizations, the federation
of networks of women’s organizations, as well as the DRC Women Entrepreneurship Platform, which is
an umbrella structure of seven associations of female entrepreneurs and businesswomen of the Congo,
organizations representing the private sector7 (FEC, COPEMECO, FENAPEC) and TFPs, especially the
European Union, World Bank and DFID. Their views were reflected in the design and formulation of the
project components.
2.7. Bank Group Experience and Lessons Reflected in Project Design
Lessons learnt: Since the resumption of cooperation with the country in 2002, the Bank has initiated a
series of operations in the area of institutional capacity-building, such as PARER8 in 2003, the Project
for Mobilization and Revitalization of the Public Administration’s Human Resources (PMR-RH),
approved in January 2011, the Public Finance Modernization Support Project (PAM-FP) approved in
April 2012 and PAI-STATFIN in 2013, and ongoing operations aimed at building the State’s
institutional capacity to manage the economy. The Bank also initiated the PAIM9
project in 2002 mainly
to improve the institutional and regulatory framework for private sector development. Lessons learnt
from PAIM’s implementation were reflected in the design of this project, namely that the project should
provide for: (i) a limited number of beneficiary structures; (ii) satisfactory risk analysis; (iii) a logical
framework indicating expected outcomes and outputs; (iv) an integrated project management unit
covering all technical, administrative and financial aspects headed by only one officer; (v)
harmonization between the timeframe for provision of IT equipment and the schedule for training of
experts to use such equipment; (vi) continuity of task managers; (vii) consultation of beneficiaries on the
type of training and training experts; (viii) definition of project implementation responsibilities; and (ix)
establishment of a monitoring-evaluation system for project results. (Also see the technical annexes).
2.7.1.1 With regard to project monitoring, a recent review of the Bank Group’s portfolio in the DRC
reveals that it is necessary to: (i) prepare an administrative, financial and accounting procedures manual
and to adopt standard software which could be adapted to project specificities; (ii) provide the
Programme and Project Monitoring Unit with adequate resources to ensure the operation of the
integrated project monitoring mechanism; (iii) provide for the participation of experts from the sector
ministries involved in project supervision within their sector; (iv) establish a mechanism for the gradual
7 FEC (Federation of Enterprises in Congo); COPEMECO (Cooperation of Small and Medium-sized Enterprises in Congo) and; FENAPEC (National
Federation of Small Enterprises in Congo). 8 Institutional Support Project for the Economic Revival and Reunification Support Programme.
9 Multi-sectoral Institutional Support Project.
12
payment of counterpart fund balances for projects that require the financial contribution of the State; (v)
take accelerated measures to recruit key project staff in order to shorten the timeframe for fulfilment of
conditions precedent to first disbursement and recruit the external auditors of the projects; (vi) closely
monitor the coordinators of project management units to ensure that they maintain an adequate schedule
for closure of the special accounts at project completion (send the final supporting documents to the
Bank, reimburse balances to the Bank and close the special account); and finally; (vii) maintain the
frequency of project steering committee meetings and ensure that the committees are involved in the
review of work programmes, annual budget and annual audit reports.
2.7.2 Consideration of lessons learnt: The abovementioned lessons were incorporated into the
design of this project. As already stated in §2.6, PADSP-CE was prepared with the involvement of TFPs
operating in the DRC and is in keeping with the implementation of GPRSP-2 by the Government and
implementation of the Bank's 2013-2017 operations strategy for the DRC. Indeed, (i) PADSP-CE will be
limited to the most relevant and indispensable structures that promote private sector development and
improvement of the business environment, and consequently, the number of beneficiary structures is
limited given the project’s scope and objectives; (ii) risk analysis was conducted in close collaboration
with CDFO; (iii) the logical framework will respect the Bank’s standards on results indicators; (iv) the
Project Management Unit, which is already managing one project funded by the Bank (PMR-RH) will
be headed by only one coordinator, and comprise professioinal staff with technical, administrative and
financial expertise; (v) training will be systematically planned after the supply of any equipment; (vi)
measures will be taken to ensure the efficient implementation of the project mainly through the
systematic preparation of an Implementation Status and Results Reports (ISR) after each mision; (vii)
the training courses will be prepared in consultation with, and on the initiative of beneficiaries; (viii)
responsibilities will be clearly defined within the institutional framework of project implementation; (ix)
regular close monitoring will be conducted by CDFO and the Bank will carry out at least two
supervisions per year. Apart from the risk mitigation measures in the area of governance (Section 4.3)
and the identified residual risks (Section 4.5), it was noted that the authorities are determined to
successfully carry out public administration reform. Furthermore, there are only three conditions
precedent to first disbursement which relate exclusively to aspects that are prerequisites for project start-
up. Finally, the lessons learnt from a recent review of the Bank Group’s portfolio were taken into
account and the necessary arrangements described in the technical annex. Also see §2.1.6 and §4.1.4.
2.7.3 Bank’s Active Portfolio in the DRC: As at 31 March 2015, the Bank’s portfolio in DRC
comprised a total of 39 operations for a cumulative amount of UA 836.37 million distributed among 19
national investment projects amounting to a total of UA 727.05 million financed by the ADF, AfDB,
RWSSI and the Forest Investment Programme (FIP). In addition to the above, there are two emergency
assistance operations amounting to a total of UA 1.34 million. This portfolio also includes 7 regional
operations amounting to UA 83.56 million financed by the ADF and the NEPAD-IPPF fund and 11
operations of the Congo Basin Forest Fund (CBFF) amounting to a total of UA 24.42 million. The
portfolio’s overall disbursement rate is 24.91%. Projects at risk (PAR) in the portfolio are: national
portfolio: 1 PAR; regional portfolio: 2 PAR; CBFF: 5 PAR. Only one study on regional operations is
considered to be ageing.
2.8. Key Performance Indicators
The logical framework will be the benchmark for the project’s monitoring/evaluation. The main
indicators adopted to monitor the effects of the project over the 2015-2019 period are: (i) GUCE is
rolled out in the main provinces, especially in Lubumbashi (ii) the PPP Central Unit is established and
operational; (iii) the National SME Development Strategy is prepared and adopted by the Government;
(iv) 9000 direct female jobs are created; (v) 10000 young graduates without any professional experience
are recruited into enterprises; (vi) a pilot incubator-nursery in fish farming and another in timber
processing are operational; (vii) 300 female entrepreneurs in 11 provinces are trained; (viii) the INPP is
provided with modern equipment to improve youth employability; and finally; (ix) the Polytechnic
Faculty of Lubumbashi is supplied with modern equipment to promote "local content" in the mining
13
industry by developing expertise that will encourage the emergence of entrepreneurs and, consequently,
local content in the mining sector value-added chain.
III. PROJECT FEASIBILITY
3.1. Economic Benefits
3.1.1 Considering that it is an institutional capacity-building project, PADSP-CE is not the type of
productive project implemented for immediate financial gain or return on investment. Hence, the type of
financial analysis usually conducted for projects is not applicable to the PADSP-CE. Institutional
capacity-building does not generate cash flows (expenditure and revenue) which would allow financial
analysis. Consequently, and given the nature and specific objectives of the Project, only economic
analysis would reveal the potential overall economic benefits of the Project and their distribution among
its various beneficiaries.
3.1.2 Ensuring private sector development by promoting entrepreneurship will help to sustain
inclusive economic growth that will create sustainable jobs and generate enough national wealth to
efficiently reduce poverty. More sustained growth will benefit the State itself in terms of increased
domestic revenue collection. This will allow the State some budgetary leeway and help to improve the
living conditions of the people through increased budget allocations to priority social sectors and,
consequently, improve access to basic social services (health and education). By supporting skills
development, the project will improve youth employability by offering them the necessary qualifications
and the opportunity of a first job in an enterprise. Implementation of this project will also contribute to
the economic empowerment of at least 9000 women managers of very small enterprises. PADSP-CE
implementation will provide a platform for promoting partnership through the pilot incubator-nursery
approach in timber processing and fish farming and will support 9000 women managers of very small
enterprises, thus leading to the creation of 9000 direct jobs for women. The project will also offer the
opportunity to recruit 10000 young graduates without any professional experience into enterprises, 30%
of whom will be women. Finally, 30% pf the business incubators and nurseries are reserved for women.
3.2. Environmental and Social Impact
3.2.1 Environment: The project will have no negative environmental impact. It is, therefore,
classified under environmental category III.
3.2.2 Climate Change: Project activities, oriented towards human and institutional capacity-
building, have no negative impact on the environment or on the climate change process.
3.2.3 Gender: Despite a regulatory framework that favours gender in the DRC, there are still
inequalities in female participation in decision-making. Women represent approximately 52% of the
population but are under-represented in decision-making bodies. They have a 9.73% representation in
parliament. Legal, cultural, political, economic and historical obstacles prevent the emergence of female
leadership and more female representation in fora that take decisions affecting their lives. The activities
adopted in this context are aimed at strengthening the legal framework, knowledge building and
capacity-building in support of gender. With a view to addressing the persistent gender shortcomings
in the DRC, PADSP-CE is fully consistent with the Bank's gender policy (2014-2018) “Investing in
Gender Equality for Africa’s Transformation” and covers the three pillars of the strategy,
namely: Pillar 1: Legal status and property rights. The strategy considers the legal status of women and
their property rights as the cornerstones of inclusive growth and gender equality. Pillar II “Economic
empowerment” and Pillar III “Knowledge management and capacity building”. More specifically: (i)
PASDP-CE will support the Family Code amendment process by building the capacity of female
entrepreneurs, and especially by removing the Article which forces women entrepreneurs to obtain
formal approval from their husbands before travelling and before opening bank accounts, which will
also improve the business environment; (ii) PADSP-CE will consolidate the economic activities of 9000
women managers of very small enterprises with a view to improving their economic empowerment.
14
Furthermore, at least 30% of the opportunities in the implementation of the pilot incubators-nurseries
will be reserved for women; and finally (iii) with regard to leadership, the project will directly support
the training of 300 female entrepreneurs in the 11 provinces of the DRC.
3.2.4 Social: As mentioned in §3.1.2, ensuring private sector development by promoting
entrepreneurship will help to sustain inclusive economic growth that will create sustainable jobs and
generate enough revenue for efficient poverty reduction. The project will help to improve youth
employability by offering them the necessary qualifications that will ultimately lead to the reduction of
youth and female unemployment. It will also provide an opportunity to recruit 10000 young graduates
without any professional experience into enterprises, 30% of of whom will be women. Finally, 30% of
the business incubators and nurseries are reserved for women. The project’s implementation will also
contribute to the economic empowerment of at least 9000 women managers of very small enterprises.
PADSP-CE implementation will provide a platform for promoting partnership through the pilot
incubator-nursery initiative in timber processing and fish farming and will support 9000 women
managers of very small enterprises thus leading to the creation of 9000 direct jobs for women. PADSP-
CE implementation will ultimately contribute to the creation of additional inclusive national wealth and
will generate new employment opportunities thereby reducing unemployment, especially among the
youth and women.
3.2.5 Involuntary Resettlement : The project will not result in any displacement of communities.
IV IMPLEMENTATION
4.1 Implementation Arrangements
4.1.1 The project will be implemented under the oversight of the Ministry of Planning and
Implementation of the Modernity Revolution. For reasons of efficiency, it is envisaged that the
management unit of the Project for the Modernization and Revitalization of the Public Administration’s
Human Resources (PMR-RH) at the Ministry of Planning and Implementation of the Modernity
Revolution will be the executing agency for the PADSP-CE. Although this unit, established within a
General Directorate of the Ministry of Planning, which is also the ministry that coordinates issues
relating to the business environment, has satisfactory experience with Bank procedures, its capacity will
be further developed through Technical Assistance. The project implementation institutional framework
will comprise:
(i) a Project Steering Committee (PSC); (ii) a project implementation unit (CEP-PMR-RH) and project
focal points (PFPs) in beneficiary structures (Ministry of Gender, Family and Children’s Affaires;
Ministry of Small and Medium-sized Enterprises and the Middle Class; Ministry of Industry, CPCAI,
GUCE, ANAPI, OPEC; INPP; ONEM; PROCER; CNFE/FEC; FEC-PME; and the Polytechnic Faculty
of Lubumbashi).
4.1.2 Steering Committee (PSC): To guarantee efficient guidance and coordination of PADSP-CE
activities, the PSC will be responsible for supervision and monitoring of implementation. In that
capacity, it will validate the budgets and status reports established by CEP-PMR-RH. The PSC will
comprise: (i) the Minister responsible for Planning who will be the chairperson; (ii) the CEP-PMR-RH
Coordinator or his/her representative; (iii) the Director of PROCER; (iv) the Director-General of
ONEM; (v) the Director-General of INPP; (vi) the representative of the Minister of Gender, Family and
Children’s Affairs; (vii) the Director-General of OPEC; (vii) the Director-General of ANAPI; (viii) the
Senior Associate of CPCAI (ix) the Director-General of GUCE Kinshasa; (x) a representative of the
Polytechnic Faculty of Lubumbashi; (xi) a representative of the Ministry of SMEs; (xii) a representative
of the Ministry of Industry; (xiii) and a representative of FEC-PME. The PSC will take the measures
deemed necessary to ensure the smooth implementation of the different project components. It will be
responsible for dealing with any problems that fall within its remit in order to ensure that project
implementation is properly coordinated. Secretarial services for PSC meetings will be provided by CEP-
PMR-RH. The establishment of this structure is a condition precedent to first disbursement of the
grant.
15
4.1.3 The PADSP-CE will be implemented by CEP-PMR-RH which will be the operational
project management structure and will be tasked with ensuring the implementation of all project
components and establishing periodic project status reports. To that end, the project management team
will comprise: (i) a project coordinator; (ii) a project officer responsible for daily management of the
project, assisting the coordinator in the performance of his/her duties and also having decision-making
powers; (iii) a procurements expert – a civil servant who will be assisted by a consultant to be recruited;
(iv) an accountant and a financial affairs officer (FAO) who will be assisted by a consultant to be
recruited; (v) a monitoring/evaluation expert to be recruited; (vi) a private sector development expert;
(vii) an administrative assistant; (viii) a messenger; and (ix) a driver. Proof of designation of the CEP-
PMR-RH as the executing agency and of appointment of its members and the focal points for each
department and beneficiary structure involved in the Project to serve as interlocutor for CEP-
PMR-RH will be considered as a condition precedent to first disbursement.
4.1.4 Financial Management: Fiduciary responsibility for the project will be assigned to DSFC,
through the PMR-RH Implementation Unit which will ensure the financial management of all project
components in collaboration with the beneficiary entities. The DFSC has qualified financial staff
deployed throughout its finance and accounting division and the internal audit division. The
performance of the financial staff in charge of PMR RH was deemed satisfactory, as concerns the
accounting clerk and the financial management assistant who had benefitted from capacity-building
through the Bank’s technical assistance and support. Consequently, these staff members will join the
financial team of PADSP-CE to serve as FAO and accountant, respectively. A decision of the Minister
responsible for planning will confirm their assignment to the project. SUCCES software will be used
for the project’s financial and accounting management, and a short-term consultant (3 months) will be
recruited locally to assist the project in configuring the accounts of PADSP-CE. The procedures manual
prepared under PMR-RH will be updated to include the specificities of PADSP-CE. The resources of the
PMR-RH project will finance the update of the manual and the recruitment of the consultant who will
configure the accounts. The internal audit division within DSFC will be used for short-term missions to
review project activities and will prepare reports for submission to the project steering committee (see
details in Annex B4).
4.1.5 Procurement Arrangements: Procurements by international competitive bidding (ICB) and
the selection of consultancy services, under this project, will be done in accordance with ADF Rules and
Procedures for Procurement of Goods and Works (May 2008 edition, revised July 2012) or where
applicable, the ADF’s Rules and Procedures for the Use of Consultants (May 2008 edition, revised July
2012), using the Bank’s relevant standard documents, and in compliance with the provisions of the
financing agreement. Under this project, procurements through national competitive bidding (NCB) and
through shopping for suppliers will be done in accordance with national public procurement laws (Act
No. 10/10 of 27 April 2010 governing public procurements), by using the country's standard
documents for competitive bidding and requests for quotations as well as provisions set out in the
financing agreement, presented in Section B5.1 of the Technical Annexes. A procurement plan (PP)
will be prepared by the country and submitted to the Bank which will ensure that it is consistent with the
grant agreement and the applicable regulations. The PP will be prepared to cover an initial period of 18
months and will be updated by the Donee every year or as required. Every PP amendment proposal shall
be approved by the Bank before it is applied. The Project Implementation Unit (PIU), reinforced with a
procurements expert, will be responsible for the procurement of goods, works, consulting services and
training as described in detail in technical annex B5.
4.1.6 Disbursements: Disbursements will be made in accordance with Bank procedures. Two
methods will be used for the disbursement of funds at the Bank: (i) the special account method for
operating expenses; (ii) the direct payment method (for payment of contracts for the procurement of
goods, services and works). A special USD account will be opened in the name of PADSP-CE, in a
commercial bank deemed acceptable by the AfDB to receive the operating resources for project. The
special account will be managed jointly by the project coordinator and the FAO, with the project officer
and the accountant acting as their respective alternates. Evidence of the opening of the special account
will be a condition precedent to first disbursement of the grant.
16
4.1.7 Audit arrangements: At appraisal, the DSFC did not have any outstanding audit reports. The
reports previously submitted to the Bank were deemed acceptable and the audit report for 2014 is
expected at the Bank by 30 June 2015. Annual audits will be conducted by an independent external audit
firm that will be recruited on a competitive basis and in accordance with the Bank’s standard terms of
reference (TORs). Recruitment of the external auditor shall be the responsibility of the DSFC and could
be carried out jointly with the Audit Office. Audit expenses shall be defrayed by the project. The TORs
of the external auditor will be adapted to include the specificities of PADSP-CE, with a view to
recruiting an independent firm with experience in the auditing of AfDB-funded projects. The audits shall
be conducted in accordance with international ISA/ISSAI norms. The financial statements audited by the
independent firm shall be submitted (see table for frequency) to the Bank no later than six months after
closure of the fiscal year concerned.
4.2. Monitoring and Evaluation
4.2.1 The monitoring/evaluation system will be based on (i) regular monitoring of activities by the
country office (CDFO); (ii) periodic supervision (two or more missions per year) and periodic reports by
the Project Management Unit (PMU) as well as audits; (iii) mid-term review to assess the
implementation performance of the project; and (iv) regular supervisions by OSGE. These supervisions
will be conducted preferably in coordination with other development partners and will end with the
systematic preparation of an implementation status and results (ISR) report after each mission. A
monitoring/evaluation mechanism will be established and it will take account the multi-sector nature of
the project. Upon project completion, a completion report will be prepared. The indicative key stages
are presented in the table below:
Table 3.1: Monitoring Stages/Feedback Loop Schedule Stages Monitoring Activities/Feedback Loop
May-15 Grant approval by Board Notification to the Government
July -15 Grant Effectiveness Signature of grant agreement and fufilment of conditions precedent to first
disbursement Sept-15 Launching mission Training for project officials Sept-15 GPN and SPN UNDB; UN Development Business; national and regional newspapers
Augustt-15 Fulfillment of conditions precedent to 1st disbursement Opening of the special account, creation and decision of members of the
CPE
Sept-15 Launching of initial activities Preparation of the work programme and establishment of Project Implementation Unit
July -15 Preparation and launching of competitive bidding Preparation by the beneficiary structures and Project Implementation Unit October -
15 Bid evaluation and award of contracts Evaluation by the Project Implementation Unit and approval by all bodies
Nov-15 Implementation of development works Executed by enterprises, verified by the Project Implementation Unit and
focal points 2015-2019 Implementation of activities, other project activities Quarterly and annual status reports 2015-2019 Launching missions and mid-term review missions
(March 2014) Mission reports
2016-
2020
Annual project audits Audit reports
June -20 Project completion Completion report
4.3. Governance
4.3.1 Project implementation could be affected by governance problems (fraud, corruption),
especially in fiduciary management. The procurement risk will be mitigated through the following
measures: for international competitive bidding and selection of consultants, the Bank shall conduct a
prior review at each stage of the process by issuing its no-objection opinions on procurement documents,
contract award proposals and contracts. For national competitive bidding and shopping for suppliers,
national regulations shall be used, taking into account the provisions of the Letter of Agreement of 27
September 2015 on the application of national procedures (§B.5.7 of the Technical Annexes). To that
end, the supervision and audit of project procurements shall be conducted to ensure an ex post review of
the records and contracts awarded. CEP-PMR-RH, which is authorized to manage the procurement
17
process, shall be supported by the Project and Public Procurements Management Unit of the Ministry of
Planning and Implementation of the Modernity Revolution. The internal administrative and technical
control mechanisms, the complaints and claims management mechanism, which are already established
and operational, will make it possible to continue with the promotion and expansion of the fraud and
corruption control mechanisms. As concerns financial governance, see the adequate measures taken on
financial and audit management (§ 4.1.4, § 4.1.6. and § 4.1.7).
4.4 Sustainability
Commitment and ownership of the project by the country and policy justifying the support: As
indicated in Section 1 of the report, the project is indeed consistent with GPRSP-2. It is also an
instrument for implementing the Industrial Policy and Strategies Paper (IPSP) of the DRC. The
beneficiary institutions of the project participated actively in the preparation and appraisal of the project,
including the highest authorities in the main sector ministries and the Office of the Prime Minister
responsible for labour and employment issues. PADSP-CE is a follow-up to the implementation of
GPRSP-2 and the DPSI and also supports implementation of the Government's programme to develop
the private sector and especially small and medium-sized enterprises. Consequently, the project is
consistent with the Government’s programme. The administration’s capacity will be built up through
sustained technical assistance that guarantees the transfer of skills. These additional resources allocated
to private sector promotion structures and institutions will help to strengthen sustainability.
Furthermore, the nature of the project, which is heavily oriented towards private sector
development, strengthens commitment to project sustainability because it entails developing
private sector businesses that generate profits. Moreover, the Government undertakes to support
development of the private sector and especially of SMEs/SMIs. This commitment is also reflected in
the recent creation of a Ministry dedicated to SMEs. It is also envisaged that the pilot business
incubator-nurseries for the timber and fish farming sub-sectors will become autonomous and contribute
to job creation.
4.5. Risk Management
Measures have been taken to mitigate the risks of poor governance (fraud, corruption) especially in the
procurement, financial management and disbursement conditions. Furthermore, the risk of reversibility
of Government commitments to reform and political instability are mitigated by the country’s
determination to continue consolidating national peace and security, with the support of the international
community and the reaffirmation of the commitment of the Government and TFPs to carry on
supporting reform implementation, especially as regards the promotion of inclusive growth.
Table 3.2
Risks and Mitigative Measures Risks Level of risk Mitigation ionMeasures
Socio-political risk – Insecurity and
political instability
Reversibility of the Government’s
commitment to pursue structural
reforms.
Limited human resources in the
structures benefitting from the project
to ensure efficient implementation of
selected activities
Moderate
Commitment of the country and the international
community to continue consolidating national
peace and security.
Reaffirmation of the Government’s commitment
to continue the process of modernizing the
economy.
The intervention of high-level experts to ensure
training and transfer of knowledge in these
structures will mitigate this risk in the beneficiary
structures.
18
4.6. Knowledge Building
The project will also help to build knowledge in the DRC, especially regarding private sector
development and the business environment. Knowledge will be acquired through the transfer of skills
from technical assistants and consultants to the staff in institutions and businesses that benefit from the
project, particularly the youth and women. It will also be acquired through the various data and
knowledge platforms, user manuals and several user-training programmes and the training of trainers,
especially female entrepreneurs, and workshops that will be organized. The knowledge acquired from
this project, as well as the outcomes, will also be disseminated within and outside the Bank as a result of
strict monitoring/evaluation of expected outcomes and outputs, supervision missions, the project
completion report as well as OPEV seminars and reports.
V. LEGAL FRAMEWORK
5.1 Legal Instrument: The proposed financial instrument is a UA 38 million grant awarded to the
Democratic Republic of Congo.
5.2. Conditions Associated with the Bank’s Intervention
A. Condition Precedent to Effectiveness of the Grant Agreement
5.2.1 The grant agreement shall become effective on its date of signature by the Don6ee and the
Fund.
B. Conditions Precedent to First Disbursement
5.2.2 In addition to effectiveness of the grant agreement, the first disbursement of the grant shall be
subject to fulfilment of the following conditions by the donee to the satisfaction of ADF:
Provide evidence of the establishment of the Project Steering Committee (PSC) and of the
appointment of its members (§ 4.1.2);
Provide evidence of the confirmation of the CEP-PMR-RH as the project implementation
structure and of the appointment of its members and of the focal points in each
Directorate involved in the project to serve as the PIU interlocutor (§ 4.1.3);
Provide evidence of the opening of the special account in a commercial bank to receive
ADF grant resources ((§ 4.1.6).
5.3 Compliance with Bank policies
This project complies with the applicable policies of the Bank, especially those relating to project
financial management, procurements, disbursements and expenditure eligibility for Bank financing. No
waiver is recommended.
VI. RECOMMENDATION
Management recommends that the Board of Directors approve the proposed ADF grant of UA 38
million to the Government of the Democratic Republic of Congo for the purpose and u n d e r t h e
c o n d i t i o n s s t i p u l a t e d i n t h i s r e p o r t .
I
Appendix I. DRC’s Selected Macroeconomic Indicators
Indicators Unit 2000 2008 2009 2010 2011 2012 2013 (e)
National Accounts
GNI at Current Prices Million US $ 4 225 9 999 10 888 11 816 12 786 15 112 ...
GNI per Capita US$ 90 170 180 190 200 230 ...
GDP at Current Prices Million US $ 4 335 19 222 18 356 20 526 23 856 27 468 37 125
GDP at 2000 Constant prices Million US $ 4 335 6 360 6 536 7 007 7 490 8 030 8 678
Real GDP Growth Rate % -5,5 6,2 2,8 7,2 6,9 7,2 8,1
Real per Capita GDP Growth Rate % -7,6 3,3 0,0 4,3 4,0 4,3 5,2
Gross Domestic Investment % GDP 3,4 11,2 14,9 12,5 12,7 12,8 13,7
Public Investment % GDP 0,5 4,2 4,1 5,3 5,5 4,6 4,9
Private Investment % GDP 3,0 7,0 10,8 7,2 7,1 8,2 8,9
Gross National Savings % GDP -0,7 4,9 7,4 15,4 9,6 16,0 14,6
Prices and Money
Inflation (CPI) % 550,0 18,0 46,2 23,5 15,5 2,7 1,1
Exchange Rate (Annual Average) local currency/US$ 21,8 559,3 809,8 905,9 919,5 919,8 919,8
Monetary Growth (M2) % ... 62,9 57,6 27,7 23,1 22,2 10,0
Money and Quasi Money as % of GDP % 45,1 14,8 16,9 17,2 18,0 19,1 15,5
Government Finance
Total Revenue and Grants % GDP 4,0 12,4 14,9 21,1 18,0 20,1 19,1
Total Expenditure and Net Lending % GDP 8,6 13,8 17,5 18,0 19,1 21,8 22,8
Overall Deficit (-) / Surplus (+) % GDP -6,0 -1,4 -2,6 3,2 -1,2 -1,7 -3,7
External Sector
Exports Volume Growth (Goods) % -6,1 8,2 -6,4 47,4 21,3 -2,0 7,0
Imports Volume Growth (Goods) % 32,5 11,8 -15,7 43,3 8,4 -17,0 7,1
Terms of Trade Growth % -9,0 -9,7 -22,1 16,0 -9,9 -18,6 -5,4
Current Account Balance Million US $ -173 -1 054 -1 124 -2 042 -1 281 -1 697 -3 370
Current Account Balance % GDP -4,0 -5,5 -6,1 -9,9 -5,4 -6,2 -9,1
External Reserves months of imports ... 0,1 1,8 1,5 1,2 1,8 1,9
Debt and Financial Flows
Debt Service % exports 83,6 3,6 3,8 2,0 1,5 1,7 2,4
External Debt % GDP 293,0 70,7 74,7 24,3 21,9 22,4 20,3
Net Total Financial Flows Million US $ 192 1 616 2 154 2 668 3 374 ... ...
Net Official Development Assistance Million US $ 177 1 766 2 357 3 543 5 522 ... ...
Net Foreign Direct Investment Million US $ 72 1 727 664 2 939 1 687 3 312 ...
Source : AfDB Statistics Department; IMF: World Economic Outlook, October 2013 and International Financial Statistics, October 2013;
AfDB Statistics Department: Development Data Portal Database, March 2014. United Nations: OECD, Reporting System Division.
Notes: … Data Not Available ( e ) Estimations Last Update: April 2014
Congo, Dem. RepublicSelected Macroeconomic Indicators
-8,0
-6,0
-4,0
-2,0
0,0
2,0
4,0
6,0
8,0
10,0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
%
Real GDP Growth Rate, 2000-2013
-100
0
100
200
300
400
500
600
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Inflation (CPI),
2000-2013
-12,0
-10,0
-8,0
-6,0
-4,0
-2,0
0,0
2,0
2 000
2 001
2 002
2 003
2 004
2 005
2 006
2 007
2 008
2 009
2 010
2 011
2 012
2 013
Current Account Balance as % of GDP,
2000-2013
II
Appendix I-Bis. DRC’s Comparative Socio-Economic Indicators
Year
Congo,
Dem.
Republic
Africa
Develo-
ping
Countries
Develo-
ped
Countries
Basic Indicators
Area ( '000 Km²) 2011 2 345 30 323 98 458 35 811Total Population (millions) 2013 67,5 1 109,0 5 909,3 1 252,8Urban Population (% of Total) 2013 35,4 40,2 47,7 78,3Population Density (per Km²) 2013 28,9 46,9 70,7 23,5GNI per Capita (US $) 2012 230 1 719 3 815 38 412Labor Force Participation - Total (%) 2012-2013 39,4 37,4 67,9 72,1Labor Force Participation - Female (%) 2012-2013 49,6 42,5 38,6 44,6Gender -Related Dev elopment Index Value 2007-2011 0,370 0,502 0,694 0,911Human Dev elop. Index (Rank among 187 countries) 2012 186 ... ... ...Popul. Liv ing Below $ 1.25 a Day (% of Population)2008-2011 87,7 40,0 20,6 ...
Demographic Indicators
Population Grow th Rate - Total (%) 2013 2,7 2,5 1,3 0,3Population Grow th Rate - Urban (%) 2013 4,3 3,4 2,5 0,6Population < 15 y ears (%) 2013 45,0 40,9 28,3 16,4Population >= 65 y ears (%) 2013 2,9 3,5 6,1 16,8Dependency Ratio (%) 2013 92,9 77,9 52,4 49,9Sex Ratio (per 100 female) 2013 98,7 100,0 103,3 94,4Female Population 15-49 y ears (% of total population) 2013 22,9 24,0 53,1 45,2Life Ex pectancy at Birth - Total (y ears) 2013 50,0 59,2 68,4 77,8Life Ex pectancy at Birth - Female (y ears) 2013 51,6 60,3 70,3 81,2Crude Birth Rate (per 1,000) 2013 42,7 34,8 21,2 11,2Crude Death Rate (per 1,000) 2013 15,4 10,4 7,6 10,4Infant Mortality Rate (per 1,000) 2013 108,1 61,9 39,8 5,5Child Mortality Rate (per 1,000) 2013 179,0 97,4 56,3 6,6Total Fertility Rate (per w oman) 2013 5,9 4,6 2,6 1,7Maternal Mortality Rate (per 100,000) 2010 540,0 415,3 240,0 16,0Women Using Contraception (%) 2013 21,9 34,9 62,6 71,3
Health & Nutrition Indicators
Phy sicians (per 100,000 people) 2004-2011 11,0 47,1 117,8 297,8Nurses (per 100,000 people)* 2004-2011 ... 132,6 202,7 842,7Births attended by Trained Health Personnel (%) 2006-2011 80,4 52,6 66,3 ...Access to Safe Water (% of Population) 2012 46,5 68,8 87,2 99,2Access to Health Serv ices (% of Population) 2000 59,0 65,2 80,0 100,0Access to Sanitation (% of Population) 2012 31,4 39,4 56,9 96,2Percent. of Adults (aged 15-49) Liv ing w ith HIV/AIDS 2012 1,1 3,9 1,2 ...Incidence of Tuberculosis (per 100,000) 2012 327,0 223,6 144,0 23,0Child Immunization Against Tuberculosis (%) 2012 78,0 83,0 81,5 96,1Child Immunization Against Measles (%) 2012 73,0 74,0 83,0 94,3Underw eight Children (% of children under 5 y ears) 2005-2012 24,2 19,7 17,0 1,4Daily Calorie Supply per Capita 1974 2 262 2 481 2 675 3 285Public Ex penditure on Health (as % of GDP) 2011-2012 2,9 2,9 3,0 7,5
Education Indicators
Gross Enrolment Ratio (%)
Primary School - Total 2012 110,9 101,9 109,4 100,9 Primary School - Female 2012 103,6 97,9 107,6 100,6 Secondary School - Total 2012 43,3 47,4 69,1 100,2 Secondary School - Female 2012 32,2 44,0 67,8 99,7Primary School Female Teaching Staff (% of Total) 2012 25,5 46,6 58,0 84,3Adult literacy Rate - Total (%) 2007-2012 61,2 62,0 80,3 99,2Adult literacy Rate - Male (%) 2007-2012 76,9 70,7 85,9 99,3Adult literacy Rate - Female (%) 2007-2012 46,1 53,7 74,9 99,0Percentage of GDP Spent on Education 2010-2012 2,5 5,3 4,3 5,5
Environmental Indicators
Land Use (Arable Land as % of Total Land Area) 2011 3,0 7,6 10,7 10,8Annual Rate of Deforestation (%) 2000-2009 0,4 0,6 0,4 -0,2Forest (As % of Land Area) 2011 67,9 23,0 28,2 35,0Per Capita CO2 Emissions (metric tons) 2010 0,0 1,2 3,0 11,6
Sources: AfDB Statistics Department Databases; last update :
United Nations Population Division, World Population Prospects: The 2012 Revision;
World Bank: World Development Indicators; UNAIDS; UNSD; WHO, UNICEF, WRI, UNDP; Country Reports.
For any given interval, the value refers to the most recent year available during the period
Note : n.a. : Not Applicable ; … : Data Not Available.
COMPARATIVE SOCIO-ECONOMIC INDICATORS
Congo, Dem. Republic
mai 2014
0
20
40
60
80
100
120
140
2005
2006
2007
2008
2009
2010
2011
2012
2013
Infant Mortality Rate( Per 1000 )
Congo, Dem. Republic Africa
0
200
400
600
800
1000
1200
1400
1600
1800
2004
2005
2006
2007
2008
2009
2010
2011
2012
GNI Per Capita US $
Congo, Dem. Republic Africa
2,12,22,32,42,52,62,72,82,93,0
2005
2006
2007
2008
2009
2010
2011
2012
2013
Population Growth Rate (%)
Congo, Dem. Republ ic Africa
111213141516171
2005
2006
2007
2008
2009
2010
2011
2012
2013
Life Expectancy at Birth (years)
Congo, Dem. Republic
Africa
III
Année
Rép.
Démocratique
du Congo
Afrique
Pays en
Dévelop-
pement
Pays
Déve-
loppés
Indicateurs de Base Superficie ('000 Km²) 2011 2 345 30 323 98 458 35 811Population totale (millions) 2012 69,6 1 070,1 5 807,6 1 244,6Population urbaine (% of Total) 2012 36,5 40,8 46,0 75,7Densité de la population (au Km²) 2012 28,9 34,5 70,0 23,4Rev enu national brut (RNB) par Habitant ($ EU) 2011 190 1 609 3 304 38 657Participation de la Population Activ e - Total (%) 2012 37,0 37,8 68,7 71,7Participation de la Population Activ e - Femmes (%) 2012 49,7 42,5 39,1 43,9Valeur de l'Indice sex ospécifique de dév elop. humain 2007-2011 0,370 0,502 0,694 0,911Indice de dév eloppement humain (rang sur 186 pay s) 2012 186 ... ... ...Population v iv ant en dessous de 1,25 $ par Jour (%) 2006-2011 87,7 40,0 22,4 ...
Indicateurs Démographiques
Taux d'accroissement de la population totale (%) 2012 2,6 2,3 1,3 0,3Taux d'accroissement de la population urbaine (%) 2012 4,5 3,4 2,3 0,7Population âgée de moins de 15 ans (%) 2012 45,8 40,0 28,5 16,6Population âée de 65 ans et plus (%) 2012 2,7 3,6 6,0 16,5Taux de dépendance (%) 2012 94,0 77,3 52,5 49,3Rapport de Masculinité (hommes pour 100 femmes) 2012 99,0 100,0 103,4 94,7Population féminine de 15 à 49 ans (%) 2012 22,8 49,8 53,2 45,5Espérance de v ie à la naissance - ensemble (ans) 2012 48,7 58,1 67,3 77,9Espérance de v ie à la naissance - femmes (ans) 2012 50,4 59,1 69,2 81,2Taux brut de natalité (pour 1000) 2012 42,3 33,3 20,9 11,4Taux brut de mortalité (pour 1000) 2012 15,9 10,9 7,8 10,1Taux de mortalité infantile (pour 1000) 2012 110,2 71,4 46,4 6,0Taux de mortalité des moins de 5 ans (pour 1000) 2012 181,5 111,3 66,7 7,8Indice sy nthétique de fécondité (par femme) 2012 5,5 4,2 2,6 1,7Taux de mortalité maternelle (pour 100000) 2010 540,0 417,8 230,0 13,7Femmes utilisant des méthodes contraceptiv es (%) 2012 19,2 31,6 62,4 71,4
Indicateurs de Santé et de Nutrition
Nombre de médecins (pour 100000 habitants) 2004-2010 11,0 49,2 112,2 276,2Nombre d'infirmières (pour 100000 habitants) 2004-2009 53,0 134,7 187,6 730,7Naissances assistées par un personnel de santé qualifié (%) 2010 79,3 53,7 65,4 ...Accès à l'eau salubre (% de la population) 2010 45,0 67,3 86,4 99,5Accès aux serv ices de santé (% de la population) 2000 59,0 65,2 80,0 100,0Accès aux serv ices sanitaires (% de la population) 2010 24,0 39,8 56,2 99,9Pourcent. d'adultes de 15-49 ans v iv ant av ec le VIH/SIDA 2011 0,0 4,6 0,9 0,4Incidence de la tuberculose (pour 100000) 2011 387,0 234,6 146,0 14,0Enfants v accinés contre la tuberculose (%) 2011 67,0 81,6 83,9 95,4Enfants v accinés contre la rougeole (%) 2011 71,0 76,5 83,7 93,0Insuffisance pondérale des moins de 5 ans (%) 2007-2011 28,2 19,8 17,4 1,7Apport journalier en calorie par habitant 2009 … 2 481 2 675 3 285Dépenses publiques de santé (en % du PIB) 2010 7,2 5,9 2,9 8,2
Indicateurs d'Education
Taux brut de scolarisation au (%)
Primaire - Total 2010-2012 96,0 101,9 103,1 106,6 Primaire - Filles 2010-2012 89,0 98,4 105,1 102,8 Secondaire - Total 2010-2012 39,8 42,3 66,3 101,5 Secondaire - Filles 2010-2012 29,4 38,5 65,0 101,4Personnel enseignant féminin au primaire (% du total) 2011 27,0 43,2 58,6 80,0Alphabétisme des adultes - Total (%) 2010 66,8 67,0 80,8 98,3Alphabétisme des adultes - Hommes (%) 2010 76,9 75,8 86,4 98,7Alphabétisme des adultes - Femmes (%) 2010 57,0 58,4 75,5 97,9Dépenses d'éducation en % du PIB 2008-2010 2,5 5,3 3,9 5,2
Indicateurs d'Environnement
Terres arables (en % de la superficie totale) 2011 3,0 7,6 10,7 10,8Taux annuel de déforestation (%) 2000-2009 0,4 0,6 0,4 -0,2Forêts (en % pourcentage de la superficie totale) 2011 67,9 23,0 28,7 40,4Emissions du CO2 par habitant (tonnes métriques) 2009 0,0 1,2 3,1 11,4
Source : Base des données du Département des Statistiques de la BAD; dernière mise à jour: Mai 2013
Banque Mondiale WDI; ONUSIDA; UNSD; OMS, UNICEF, WRI, PNUD, Rapports nationaux.
Notes: n.a. Non Applicable ; … : Données non disponibles.
Rép. Démocratique du Congo INDICATEURS SOCIO-ECONOMIQUES COMPARATIFS
0
20
40
60
80
100
120
140
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
Taux de mortalité infantile(Pour 1000 )
Rép. Démocratique du Congo
Afrique
0,0
0,5
1,0
1,5
2,0
2,5
3,0
3,5
200
4
200
5
200
6
200
7
200
8
200
9
201
0
201
1
201
2
Taux de croissance démographique (%)
Rép. Démocratique du Congo
Afrique
1
11
21
31
41
51
61
71
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
Espérance de vie à la naissance (ans)
Rép. Démocratique du Congo
Afrique
0
200
400
600
800
1000
1200
1400
1600
1800
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
RNB par Habitant $EU
Rép. Démocratique du Congo
IV
Appendix II. Table of the Bank’s Portfolio in DRC as at 31/03/2015
Project Name SAP Code Source Approval Signature EffectivenessClosing Approved Total % Disb. % Sect. Status
of FinancingDate Date Date Date Amount Disbursed
AGRICULTURE SECTOR 49,46 8,50 17,18% 6,80%
1 RURAL INFRSTRUCTURE DEV. SUPPORT PROJECT P-CD-AB0-001 ADF Grant 10/11/2011 20.01.2012 20.01.2012 31.12.2017 49,46 8,50 17,18% NPP/NPPP
TRANSPORT AND ICT SECTOR 285,63 65,97 23,10% 39,29%
2 PRIORITY AIR SAFETY PROJECT P-CD-DA0-001 ADF Grant 29/09/2010 02.11.2010 02.11.2010 31.12.2015 88,60 56,09 63,31% NPP/NPPP
3 BATSHAMBA-TSHIKAPA ROAD REHABILITATION PROJECT P-CD-DB0-002 ADF Grant 13/06/2012 07.08.2012 07.08.2012 31.12.2017 53,55 9,88 18,45% NPP/NPPP
4 BATSHAMBA ROAD-LOVUA SECTION IMPROVEMENT PROJECT P-CD-DB0-008 ADF Grant 10/12/2013 07.01.2014 07.01.2014 31.12.2019 13,26 0,00 0,00% NPP/NPPP
ADF Loan 10/12/2013 07.01.2014 31.12.2019 0,66 0,00 0,00%
ADF Grant 22/10/2014 26.03.2015 26.03.2015 31.12.2019 55,56 0,00 0,00%
5
Project for the Improvement of the Tshikapa-Mbuji Mayi Road (Tshikapa-
Kamuesha Section) and Rehabilitation of Related Rural and Agricultural
Infrastructure.
P-CD-DB0-009 ADF Grant 17/12/2014 26.03.2015 26.03.2015 31/12/2019 74,00 0,00 0,00%
NPP/NPPP
WATER AND SANITATION SECTOR 175,02 62,00 35,43% 24,07%
6 SEMI-URBAN DWSS PROJECT P-CD-EA0-004 ADF Grant 09/06/2007 09.08.2007 04.04.2008 31.12.2014 70,00 61,68 88,11% NPP/NPPP
7 PROJECT FOR THE REHAB. OF SOCIO-ECON. INFRA. IN THE CENTRAL ZONE P-CD-E00-002 ADF Grant 27/11/2013 26.03.2015 26.03.2015 31.12.2019 43,53 0,30 0,68%
ADF Loan 27/11/2013 26.03.2015 31.12.2019 1,47 0,00 0,00%
TAF Grant 27/11/2013 26.03.2015 26.03.2015 31.12.2019 55,00 0,00 0,00%
RWSSI 27/11/2013 26.03.2015 26.03.2015 31.12.2019 5,02 0,03 0,59%
PRIVATE SECTOR 39,11 0,00 0,00% 5,38%
8
NYUMBA CEMENT PLANT PROJECT
P-CD-B00-001 ADB Loan 12/02/2014 27.11.2014 39,11 0,00 0,00%
NPP/NPPP
ENERGY SECTOR 105,39 38,14 36,2% 14,50%
9
INGA HYDRO-POWER REHABILITAYION PROJECT-PMEDE
P-CD-FA0-001 ADF Grant 18/12/2007 10.04.2008 10.04.2008 30.06.2016 35,70 18,82 44,75%
PPP
10
RURAL AND PERI-URBAN ELECTRIFICATION PROJECT
P-CD-FA0-003 TAF Grant 15/12/2010 10.03.2011 10.03.2011 31.12.2015 60,00 15,93 18,12%
RURAL AND PERI-URBAN ELECTRIFICATION PROJECT P-CD-FA0-003 ADF Grant 15/12/2010 10.03.2011 10.03.2011 31.05.2015 9,69 3,39 35,00%
11
ESTABLISHMENT OF INGA SITE AUTHORITY
P-CD-FA0-005 TAS 17/04/2013 31.05.2013 31.05.2013 30.06.2015 1,99 0,00 0,00%
NPP/NPPP
12 INGA 3 DEVELOPMENT PROJECT -INGA/PATCD P-CD-FA0-009 TAS 13/05/2013 31.05.2013 31.05.2013 30.06.2015 1,5 1,13 75,18% NPP/NPPP
MULTISECTOR (GOVERNANCE) 42,78 15,23 35,6% 5,88%
13 PUBLIC FINANCE MOD. SUPPORT PROJECT P-CD-KF0-002 ADF Grant 25/04/2010 29.05.2012 29.05.2012 31.12.2015 10,00 2,98 29,77% NPP/NPPP
14 MOBILIZATION OF PUB. ADMINISTRATION'S HUMAN RES. P-CD-KZ0-004 ADF Grant 21/01/2011 04.05.2011 05.05.2011 31.12.2015 20,00 11,36 56,81% NPP/NPPP
15 STATISTICS AND PUBLIC FINANCE INSTITUTIONAL SUPPORT P-CD-K00-009 ADF Grant 23/10/2013 26.03.2015 26.03.2015 31.12.2016 10,96 0,45 4,13% NPP/NPPP
16 REFORM STEERING CAPACITY BUILDING P-CD-KF0-008 TAS 18/07/2013 06.11.2013 06.11.2013 30.06.2016 1,54 0,18 11,53% NPP/NPPP
17 HIGHER EDUCATION CAPACITY BUILDING P-CD-KF0-005 TAS 11/07/2011 24.08.2011 24.08.2011 30.06.2015 0,28 0,26 94,07%
SOCIAL 15,00 0,00 0,0% 2,06%
18
GEN. POP. CENSUS AND SOCIAL DATABASES CONSOLID. SUPPORT PROJECTP-CD-KF0-007 ADF Grant 26/11/2014 31/12/2017 15,00 0,00 0,00%
ENVIRONMENT 14,67 0,36 2,5%
19
Integrated REDD+ Project in KIS Basin
P-CD-AAD-003 FIP 11/09/2013 15.08.2014 15.08.2014 31.07.2018 14,67 0,36 2,46%
NPP/NPPP
National Operations 727,05 190,21 26,16%
EMERGENCY ASSISTANCE 1,34 0,67 50,0% 0,18%
1
EMERGENCY ASSISTANCE TO DISPLACED POPULATIONS IN KATANGA
P-CD-AA0-005 ERF 20/02/2014 20/08/2014 20/08/2014 30.06.2015 0,67 0,00 0,0%
2 EMERGENCY ASSISTANCE TO FIGHT THE EBOLA VIRUS P-CD-IBE-001 ERF 22/09/2014 30/09/2015 0,67 0,67 100,0%
CONGO BASIN FOREST FUND (CBFF) 24,42 12,12 49,6%
1 SANKURU FAIR TRADE CARBON INITIATIVE P-Z1-C00-021 CBFF 07/04/2010 14.02.2011 10.03.2011 31.12.2015 1,12 1,01 90,14% NPP/NPPP
2 CONSERVATION INTERNATIONALE FOUNDATION P-Z1-C00-025 CBFF 09/06/2010 26.07.2001 10.11.2011 30.09.2015 1,15 0,15 12,78% NPP/NPPP
3 ECOMAKALA P-Z1-C00-026 CBFF 12/07/2011 31.08.2011 31.08.2011 30.06.2016 2,12 0,65 47,61% NPP/NPPP
4 REDD AGROFORESTRY - SOUTH KWAMOUTH P-Z1-C00-027 CBFF 12/07/2011 31.08.2011 31.08.2011 30.09.2016 2,11 1,41 66,71% PPP
5 ISANGI REDD PILOT PROJECT P-Z1-C00-028 CBFF 19/05/2011 08.06.2011 17.08.2011 30.06.2016 1,95 1,36 69,90% PPP
6 CIVIL SOCIETY AND GOVERNANCE CAPACITY BUILDING P-Z1-C00-029 CBFF 13/07/2011 31.08.2011 15.10.2011 30.09.2016 2,71 0,62 22,76% PPP
7 LUKI REDD PROJECT P-Z1-C00-031 CBFF 22/07/2011 31.08.2011 31.08.2011 31.12.2016 1,98 1,08 54,75% NPP/NPPP
8 MAMBASA REDD PROJECT P-Z1-C00-032 CBFF 27/04/2011 08.06.2011 17.08.2011 30.06.2016 2,51 1,61 63,99% PPP
9VAMPEEN VALORIZATION OF AFRICAN MEDICINE P-Z1-C00-043 CBFF 16/11/2011 09.12.2011 30.12.2011 30.06.2016 1,37 0,99 74,14% NPP/NPPP
10
AGRO-FORESTRY DEVELOPMENT SUPPORT
P-CD-C00-035 CBFF 02/04/2012 12.06.2012 30.08.2012 28.02.2015 5,30 3,25 61,29%
PPP
11 Project to reduce deforest. And allev. Poverty in the VIRUNGA-HOYO Region P-CD-C00-037 CBFF 28/11/2014 2,10 0,00 0,00% NPP/NPPP
MULTINATIONAL 83,56 6,00 7,2%
1
Study on the bridge between Kinshasa (DRC) and Brazzaville (Congo) P-Z1-D00-016
ADF Grant 03/12/2008 13.05.2009 13.05.2009 31.12.2015 3,59 1,86 51,77% NPP/NPPP
2
Study on the Ousso-Bangui-Ndjaména Road and River Navigation P-Z1-D00-066
ADF Grant 01/12/2010 29.04.2011 29.04.2011 31.12.2014 0,44 0,06 12,79% PP
3 Study on the extension of the Kinshasa-Ilebo railway P-Z1-DC0-014 IPPF Grant 15/07/2012 13.08.2012 13.08.2012 30.06.2015 0,71 0,30 42,61%
4
NELSAP INTERCONNECTION PROJECT - DRC P-Z1-FA0-035
ADF Grant 27/11/2008 28.05.2010 28.05.2010 31.12.2014 27,62 1,67 6,05% PPP
5
Boali Electricity Networks Interconnections P-Z1-FA0-047
ADF Grant 19/09/2012 20.02.2013 20.02.2013 31.12.2017 5,55 0,00 0,00%
6 ADF Grant 20/11/2013 07.01.2014 07.01.2014 31.12.2019 39,40 0,00 0,00%
TAS Grant 5,00 2,11 42,17%
7 Study on the Extension of the North Kivu 220KV Transmission Line P-Z1-FAD-005 IPPF Grant 07/06/2013 20.10.2014 20.10.2014 30.06.2015 1,25 0,00 0,00%
GRAND TOTAL 836,37 209,00 24,99%
NPP/NPPP
Inga Site Development and Electricity Access Support Project P-Z1-FA0-045
DRC: Status of portfolio (approved and active projects) as at 31 March 2015 in million UA
V
Appendix III. Map of the Project Area
VI
Appendix IV: Operations of the Business climate, PPP, Investment and Employment Promotion
Inter-Donor Group
1. DFID
1. DFID approved an allocaion of GBP 100 million pounds for the DRC over a five-year period
(2014-2019) to stimulate private sector development (PSD) in the country. GBP 35 million from this
programme will be channelled through a flexible mechanism that will ensure the design and
implementation of the operations on: (i) business climate reform; (ii) improvement of financial
intermediation; and (iii) corruption control, according to needs. These operations will start with a
support programme for the Ministry of Justice and the OHADA National Commission (CNO) for
OHADA implementation. A technical assistance agreement was signed to that end between the Ministry
of Justice and DFID and, after competitive bidding, the PricewaterhouseCoopers was awarded the
contract to implement this support and management of the flexible mechanism. Two areas which could
be supported are computerization of Trade and Personal Property Credit Register (RCCM), a single
identifier for businesses since 12 September 2014, and the establishment of a One-Stop-Shop for
crossborder trade.
2. DFID also financed two studies conducted by the IFC (1), an Enterprise Survey whose
conclusions will soon be available on the World Bank website and a subsequent study on the investment
climate which will integrate the results of the Enterprise Survey with the Doing Business Report and
make recommendations (available in December).
2. SWITZERLAND
3. The Swiss Agency for Development and Cooperation supports the DRC in the mining sector on
issues of traceability and the establishment of a network of women leaders. To that end, it organized a
workshop in Lubumbashi on mining sector actors. It co-chairs the Voluntary Principles Group with
Canada. Switzerland also intends to support land sector reform.
3. EUROPEAN UNION
4. The European Union is active in the Support to Trade Programme (AIDCOM) which started in
2010 and ends in December 2014. This programme covers 4 pillars: (i) Legal and Judicial Security
which comprises support to OHADA through capacity-building for judges, support to the Permanent
Council on Accounting in Congo (CPCC) and dissemination of the Uniform Acts. The project also
supported the construction and equipment of 4 commercial courts (Boma, Kananga, Butembo and
Kolwezi). AIDCOM also supported the new Masters in OHADA Law programme in three higher
education institutions (UNIKIN, UPC and ISC); (ii) trade facilitation and customs reform by supporting
the establishment of SYDONIA WORLD at the DGDA with UNCTAD as implementing partner; (iii)
capacity building in trade policy with the Ministry of Trade through the training of a core of experts and
appropriate studies; and (iv) support to quality development of products for export through assistance to
the DRC’s Import-Export Control Authority (OCC). This concerns the provision of laboratory supplies
in the agro-food sector, the detection of counterfeit pharmaceutical products, strengthening of SMEs by
the Business Development Centre (CDE) and support to cooperatives to improve the coffee and cocoa
sub-sectors.
4. GERMAN COOPERATION
5. German-DRC Cooperation is aimed at stabilizing the financial sector and building the
capacities of financial institutions and clients. KfW support is provided at the macro (e.g. central credit
bureau), meso (e.g. FPM) and micro (e.g. refinancing of some financial institutions) levels.
6. Through its Financial Systems Development Programme (PDSF), GIZ contributes to the
development of a stable and inclusive financial sector. PDSF works mainly with the Central Bank in the
following areas: (i) financial education; (ii) consumer protection; (ii) law governing the central credit
bureau; (iv) risk management by the BCC; (v) capacity-building for the BCC in various areas.
German cooperation also supports good governance in the mining sector through the BGSM project and
VII
revival of the economies of the Maniema and South Kivu provinces through the REMAKI project.
7. It will expand its support to the DRC’s economic development from 2016. It seeks to
implement a sustainable economic development programme which includes financial sector support,
promotion of MSMEs and vocational training. The programme is envisaged to give particular focus to
the eastern part of the country. Identification missions will take place in the months ahead to define
scope and geographical coverage.
5. CANADIAN COOPERATION
8. Canada supported the government in the preparation of the Anti-Corruption Pact signed on 9
December 2013 between the Government, private sector, civil society and public administration. This
initiative is continuing with the monitoring of the appointment of members who will join the group of
volunteers. Canada is also monitoring activities closely in the mining sector where several Canadian
companies have interests.
6. USAID
9. USAID, which supports three sectors (education, health and economic growth) has just
approved its DRC assistance strategy. The main thrust of this strategy focuses on certain targeted
provinces, namely South Kivu, North Kivu, Katanga and Kinshasa for issues of high-level policy
dialogue. It is also involved in the INGA project. To that end, it financed, from mid-October, an expert
who will be assigned to the Office of the Prime Minister to assist the country in preparing this project
and to prepare, with CGI3, the regulatory framework (Electricity Code). Furthermore, a mission has
recently concluded the agricultural sector assessment. In the mining sector, USAID wishes to support
traceability as well as the potential from PPPs. It is working in partnership with BIAC to develop
agricultural sector value chains and with TMB in Katanga on mining value chains. It also intends to
support micro power stations in South Kivu.
VIII
Annex V: Overview of the Informal Sector in the DRC10
1. The second phase of the 1-2-3 survey on the informal sector piloted by the DRC's National
Institute of Statistics revealed the existence of about 2.9 million informal production units (IPUs) in all
the towns and cities of the DRC, in both the commercial and agricultural sectors. DRC towns and cities
have almost as many IPUs as households, which reflects the economic importance of informal activities
to the urban population.
2. A dominant informal sector driven by commercial activities: While these IPUs are
concentrated in the petty trading sectors where they can be easily established and require few specific
qualifications, agricultural and industrial activities still play a non-negligeable role: based on the
distribution of business activities into four major sectors, “trade” accounts for 47.3% of informal
production units, followed by "agricultural activities” with 22.2%, "industry" 19.3% and "services" with
11.2% in all DRC urban areas. The distribution of IPUs for the major sectors in Kinshasa gives 60.1%
for commercial activities, to the detriment of agricultural activities which account for only 8.5%.
3. Precarious business conditions: The informal sector is characterized by highly precarious
operating conditions. More than half of the informal production units in DRC urban centres operate
without any specific professional premises and 31.2% operate from home. The 2.9 million informal
production units generate approximately 3.4 million jobs, representing an average size of 1.3 persons for
these informal establishments. It is evident, therefore, that the informal sector is highly fragmented and
chiefly comprises micro-units (self-employed workers for the most part). Micro-units and self-employed
workers are overwhelmingly predominant. The majority of IPUs are, in fact, self-employed workers;
83.8% of them are one-person businesses. This distribution, which is highly skewed towards self-
employment, is an indicator of the weak accumulation capacity of the private sector which seems to
develop mainly through a process of extensive growth characterized by the multiplication of production
units. The labour force is not protected. The absence of social security, safety and guarantees is the
predominant characteristic of jobs proposed to the informal sector labour force.
4. A review of the characteristics of informal sector jobs held by dependent workers shows that,
although 57.7% of them enjoy the status of permanent workers, almost 96% of that number have no
written contract, which is an "informality" index of employer-employee relations in the informal sector.
Half of the jobs in the informal sector are held by women. In many respects, these female jobs are more
precarious than men’s jobs. The vast majority of women are self-employed (55.4%).
5. Working hours and remuneration: The statutory norms governing working hours do not apply
to the informal sector. The standard is 45 hours per week countrywide, whereas informal sector
operatives work for 48 hours per week, on average. However, the situation is different in Kinshasa and
other cities. The average working week exceeds 50 hours in Kinshasa and is below 47 hours for the
other cities.
There is a very wide male-female income gap in the informal sector. On average, men earn two and a
half times more income than women yet work fewer hours per week than women.
6. Employment status is highly discriminatory in terms of remuneration: Employers (as well as
partners) are at the top of the scale with an average salary of approximately CDF 193,600 and a median
income of CDF 83,300, which is ten times more than the statutory minimum wage. Self-employed
workers come second in this hierarchy with an average income of CDF 63,000 and median income of
almost CDF 20,000 per month, with very wide disparities between high and low incomes. Among the
10
Prepared in collaboration with the National Institute of Statistics in the Democratic Republic of Congo, AFRISTAT
(Economic and Statistical Observatory for Sub-Saharan Africa), DIAL (Development Institutions and Long Term
Analyses) and logistical and financial support from Paris21/ADP (Partnership in Statistics for development in the 21st
century, Accelerated Program Data).
IX
dependent workers, wage earners are poorly remunerated, with 50% of them earning less than the
statutory minimum wage. Finally, at the bottom of the scale are the apprentices and family helps whose
monthly or hourly incomes are far below the applicable minimum wage.
7. Capital is critical to the production function of economic units: total informal sector capital,
estimated in terms of replacement costs, is CDF 86 billion for all the towns and cities of the Democratic
Republic of the Congo, including CDF 21 billion in Kinshasa and CDF 65 billion in towns and cities of
the other provinces. For the most part, the informal sector capital in urban areas is composed of
equipment bought new (73.8%). However, a significant proportion of the existing capital (20% of the
total) was bought second-hand, especially professional vehicles (34%) and premises (30%). This concept
of quality does not concern land. Self-generated capital by IPUs only concerns premises (10%
constructed by IPU for self use) and tools (8%). On the whole, almost 91.3% of the capital is the
property of the IPUs which use them and only 4.8% resort to leasing, while 3.9% borrow or share.
Indeed, premises and machines are the only durables often borrowed or shared (respectively 9.8% for
land and premises, and 6.4% for machines).
8. In all the urban centres of the Democratic Republic of Congo, slightly over 50% of the capital
comes directly from family or friends, with a maximum of 64.2% in Kinshasa and a minimum of 49%
in the other urban areas. Suppliers are the second providers of capital to IPUs at 30.5%. Banks and
clients are secondary providers.
X
Appendix VI: Justification of Counterpart Funding Waiver
AFRICAN DEVELOPMENT BANK GROUP
INTER-OFFICE MEMORANDUM
Democratic Republic of Congo: Private Sector Development and Job Creation Support Project (PADSP-CE)
Justification of 10% Counterpart Funding Waiver The DRC remains a fragile State emerging from a period of political and economic instability
lasting for over two decades. The country is still faced with rebellions that threaten the peace process,
weaken central government capacity and authority, further undermine economic and financial
governance and thwart the efficient implementation of national economic and social policies. The DRC
is faced with multifaceted economic and structural factors of fragility which affect its institutional,
security, political and socio-economic environment.
This paper11
presents the analysis which underpins justification for the financing of the Private Sector
Development and Job Creation Support Project (PADSP-CE). The objective of the requested waiver is
to reduce the Government’s contribution to 3% compared to the minimum rate of 10% required by the
Policy on Expenditure Eligible for Bank Group Financing. It is based on the three criteria required by
Bank policy on cost-sharing, namely: (i) the country's commitment to implement its overall development
programme; (ii) the priority given to the sector/project by the Government; and (iii) the country’s debt
level and budget situation. Analysis of the above criteria is summarized as follows:
1. The Country’s Commitment to Implement its Development Programme
Since 2001, the Government has implemented a sound economic and structural reform programme
which, coupled with efforts to consolidate political stability, have led to economic revival after a decade
of decline. Over the last five years, the country has achieved sustained growth of about 7%. In 2013, this
figure stood at 8.5% in real terms, compared to 7.2 % in 2012, before climbing to 8.7% of GDP in 2014
and is projected to reach 10.4% in 2015. This growth remains driven by the mining sector, and in
particular copper production which rose by 52% in volume in 2013. . Furthermore, several mining
companies have moved from the exploration phase to the operation phase since 2013. In addition, since
2006, the Government has prepared and implemented two national growth and poverty reduction
strategies, including the current one which covers the 2011-2015 period. However, it should be noted
that the country’s budget position remains fragile and could be negatively affected by an unfavourable
trend in the macroeconomic situation, stemming essentially from a possible decline in demand and in
world commodity prices as well as increased spending on security as a result of the insecurity in the
eastern part of the country.
2. Priority Given by the Country to Sectors Targeted by Bank Assistance
11
Pursuant to the instructions in the internal memorandum of the First Vice-President and COO, dated 10 December 2014,
on expenditure eligibility for Bank Group financing and relating to Government counterpart contributions.
XI
The Government pays particular attention to private sector development to ensure inclusive growth, as
reflected in its Growth and Poverty Reduction Strategy Paper (2011-2015 GPRSP) which focuses on
four main pillars, namely: (i) strengthening governance and peace-building; (ii) diversifying the
economy, accelerating growth and promoting employment; (iii) improving access to basic social
services and strengthening human capital; and (iv) protecting the environment and fighting against
climate change. The project is in line with Pillar II of the Government’s 2011-2015 GPRSP, namely:
diversifying the economy, accelerating growth and promoting employment. The project will also have
an impact on Pillar III of the 2011-2015 GPRSP by improving youth employability and promoting the
economic empowerment of women. The priority given to private sector development is also emphasized
in the DRC’s Industrial Policy and Strategies Paper (DPSI) which, through its various pillars, seeks to
ensure the emergence of an industrialized, diversified, productive and competitive economy that is fully
integrated into the regional and international trade process, based on the significant development of the
country’s national resources and potential by fostering the establishment of modern, citizen-oriented,
environmentally-friendly industries that will guarantee sustainable development. The PADSP-CE is in
keeping with objective.
3. Country’s Budget Situation and Debt Level
With the exception of 2010, when the budget surplus was 3.7% of GDP following debt relief after
reaching the HIPCI completion point in July 2010 and a substantial increase in external support, the
DRC has experienced chronic public finance deficits. Over the last two years, the overall budget deficit
has deteriorated from -2.2% of GDP in 2011 to -3% in 2012, mainly due to the decline in external
contributions, coupled with heavy spending due to elections. While grants to the DRC accounted for
14.1% of GDP in 2010, they only represented 8.5% of GDP in 2011 and 2012. Furthermore, the
country’s budget situation could be negatively affected by an unfavourable trend in the macroeconomic
position, mainly due to a possible decline in demand and in world commodity prices as well as higher
spending on security.
Budget execution in 2013 and 2014 remained consistent with the budget framework. Although less
tax revenue was collected in 2013 and, to a lesser extent, in 2014, the domestic and overall primary
balances were respectively stable at 0.2% and -1.7% of GDP in 2013 and 0.2% and -2.2% in 2014. Total
revenue (net of grants) declined by 1.9 points of GDP due to lower contribution of bonuses and revenue
from the issuance of permits and authorizations in the mining and telecommunications sectors in 2013.
This trend continued in 2014. To stay within the budgetary limits, given these revenue trends,
expenditure was reduced, with the deepest cuts recorded in non-recurrent expenditure (1.1% of GDP).
Nevertheless, capital expenditure financed with own resources increased by 1% of GDP, thus generating
an overall budget deficit of 1.7% of GDP in 2013 and 2.2% in 2014.
With regard to its debt situation, the debt-service obligations of the DRC have been significantly
reduced thanks to its attainment of the completion point of the HIPC initiative, the MDRI and the current
debt policy which is based on the strict condition of concessionality for all new borrowings. Under the
HIPCI, the country benefitted from substantial external debt relief amounting to USD 10.8 billion in July
2010. However, the IMF analysis in its report of March 2013 reveals that the DRC still presented a high
risk of over indebtedness and that the DRC’s public debt situation was still characterized by significant
domestic debt arrears. However, according to the IMF's latest report after Article IV consultations of
October 2014, there was an improvement in 2014. Indeed, the DRC’s debt rating improved in 2014,
and the risk of over indebtedness is now moderate and no longer high. This improvement is
mainly due to an increase in the discount rate (from 4% to 5%) and a significant increase in the
GDP. The reinforcement of macroeconomic fundamentals in recent years has also played a role.
Although the DRC’s rating is now better than before, the IMF feels that the country should continue
borrowing at mainly concessional conditions and improve its debt management capacity, especially in a
context where domestic resource mobilization remains poor.
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4. Conclusion
Successive reviews of the DRC’s portfolio and project completion reports show that the payment of
national counterpart contributions remains a generic and recurrent constraint for all projects. This
situation impedes project implementation and also has a negative impact on portfolio performance. Since
2010, the Bank has contributed 100% to the financing of projects implemented in the DRC and
especially to the PMR-RH, PADIR, PAM-FP projects, the Batshamba-Tshikapa road project and PAI-
STATFIN. Although the risk of over indebtedness is now moderate in the DRC, it should however be
noted that the country remains a fragile state. Consequently, it is recommended that national counterpart
contributions be paid in kind.
In light of the foregoing, it is requested that the payment of 10% by the DRC be waived in favour of a
contribution in kind amounting to about 3% of the total cost of the Private Sector Development and
Job Creation Support Project (PADSP-CE). To that end, the country undertakes to provide adequate
premises in the provinces to support the establishment and opening of the one-stop-shops (GUCE) in
Matadi, Kisangani, Lubumbashi, Goma, East Kinshasa, Kananga and Mbuji-Mayi, and undertakes to
maintain the availability of the offices within CEP-PMR-RH by ensuring that they remain in the current
building and at the Government’s expense.
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Appendix VII: Brief Description of PADSP-CE
Detailed Project Description: PADSP-CE is an integrated and growth-generating initiative which
could create a virtuous dynamics and act on all main drivers of inclusive growth. Indeed, the
multidimensional character of the project helps to maximize synergies between the different socio-
economic dimensions of the country that contribute to the inclusive growth process. Its first component
will improve the business environment and consolidate the conditions that are conducive to the
emergence of a buoyant private sector. Meanwhile, its second component will help to stimulate
entrepreneurship and production as well as provide the economy with skilled labour for inclusive
growth. Finally, the third component will guarantee the efficient implementation of the project. (See
technical details in Technical Annex C).
Component I: Consolidation of the business environment and private sector promotion and
support institutions.
2.1.4 Component I: Consolidation of the business environment and private sector promotion
and support institutions.
Sub-Component I.A – Continue with the efforts initiated to consolidate the business
climate
2.1.4.1 Essentially, it was agreed to continue with the efforts initiated by the Government to further
improve the business climate through:
Institutional capacity-building and support for the implementation of CPCAI activities. The
missions of CPCAI are to identify the obstacles and stumbling blocks encountered by investors in
starting businesses and in honouring all obligations to the State and third-parties: (i) define the
policy governing improvement of the business climate and investments in the DRC and propose
the applicable specific guidelines; (ii) accelerate the implementation of reforms that provide
greater physical and judicial security to economic operators; (iii) decide on the measures to be
adopted and report on them to the Council of Ministers; and ensure monitoring/evaluation of the
implementation of adopted measures.
Capacity-building for the one-stop-shop for business registration (GUCE) in Kinshasa and
support the roll-out of the one-stop-shop in Lubumbashi, Kisangani, Matadi, Goma, East
Kinshasa, Kananga and Mbuji-Mayi. The GUCE is a public service with administrative and
financial autonomy placed under the direct authority of the Minister in charge of Justice and its
mission is to facilitate business registration formalities in the DRC. Economic operators will then
have to contact one government service to fulfil all business start-up formalities or to carry out
supplementary registration procedures (for existing businesses). The statutory period for
processing any application to the Business Registration One-Stop-Shop is 3 (three) working days,
compared to the previous time of 150 days from date of submission. Between 2013 and 2014,
7443 businesses were created through the GUCE.
Sub-Component I.B – Assistance to private sector support and promotion structures
2.1.4.2 Primarily, this entails consolidating private sector support and promotion structures; finding
adequate solutions to close the production infrastructure gap through PPPs; and capacity-building,
especially for the structures and institutions that support private sector development in the DRC
(ANAPI, OPEC and the Ministry of SMEs) so that they can provide better guidance and promote private
sector development.
The promotion of solid public-private partnership (PPP) is essential in helping to reduce the
basic infrastructure deficit which continues to impede private sector development in the DRC.
The high cost of constructing and rehabilitating development or public utility infrastructure has
led Governments to involve the private sector in the implementation of these major projects, by
establishing mechanisms that enable private sector agents to invest in or manage such
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infrastructure and community services over a given period and recover the invested capital
through a secure framework. In this regard, PADSP-CE will support the establishment of a
Central PPP Unit and the preparation of the national PPP strategy with a view to facilitating
public-private partnerships in infrastructure. The establishment of the Central PPP Unit will be
followed by the subsequent deployment of PPP units in the various regions of the country, as
decided by the Government.
Capacity-building for ANAPI. Established by Law No. 004/2002 of 21 February 2002 on the
Investment Code, as supplemented by Decree No. 065/2002 of 5 June 2002 defining its statutes,
organization and functioning, and by Decree No. 09/33 of 8 August 2009 which determines its
organizational structure, ANAPI is a technical public establishment with a legal personality and
managerial autonomy. Its main missions are to: (i) advise the Government on the investment
climate, essentially by carrying out constant advocacy with the authorities with a view to
improving the investment climate; (ii) provide useful information on the Democratic Republic of
Congo to attract investors to the DRC; (iii) provide several services and facilities to investors
before, during and after their settlement in the country; and (iv) develop proactive and
multifaceted marketing aimed at giving a good image of the Democratic Republic of Congo and
attracting investors. However, ANAPI is constrained by an insufficient workforce, a limited
operating budget, deteriorating infrastructure (its administrative headquarters and provincial
branches), the lack of external branches and above all the lack of provincial branches in
most provinces of the Republic. Despite its limited capacity, ANAPI was able, as a result of its
proactive investment promotion policy and its strategic plan, to attract from 2011 to 2013, over
419 investment projects for a total investment cost of USD 9,761,824,133. As concerns the jobs to
be created, 46,229 direct jobs and several thousand other indirect jobs were projected for this
period. Given the current difficulties of this institution, PADSP-CE will support capacity-
building for ANAPI so that it can optimally carry out its mission of investment promotion and
facilitation.
Operational capacity-building for the Congolese Small and Medium-sized Enterprise
Promotion Agency (OPEC). Despite the lofty missions of OPEC, the fact remains that this
institution lacks even the most rudimentary tools to fulfil its mandate. Established by Law No.
11/73 of 5 January 1973, as amended and supplemented by Decree No. 09/44 of 3 December
2009, OPEC is a technical public service establishment. Its statutory mission is summed up into 3
main components: (i) the conduct of general and sector studies in order to find and provide
economic, commercial and technological information on the creation and development of SMEs;
(ii) management training to build/update the entrepreneurial capacity of SME managers and their
staff; and (iii) consultancy support to SME entrepreneurs, especially on streamlining management
methods and providing adequate guidance in their search for institutional financing and the
benefits of the investment code. As part of its mission, OPEC intends to implement, with PADSP-
CE support, the strategy of reviving the middle class of Congolese entrepreneurs and thus support
the Government’s action aimed at creating conditions that are conducive to the emergence of
competitive SME/SMIs capable of creating wealth and generating sustainable and better paid
jobs. To that end, PADSP-CE will support OPEC in the following areas: (a) support in the
creation of SME/SMIs, including facilitation and incubation of SME/SMIs; (b) support for the
development of SME/SMIs, including the programme for upgrading of Congolese SME operators,
technical advice and advice on technological choices and financing guidance; and lastly (c)
institutional capacity-building for OPEC.
Institutional capacity-building for the Ministry of Industry and SMEs and preparation of
the national SME development strategy. The Ministry has no strategic document for promoting
industry and SMEs. It has extremely weak capacity and lacks the most rudimentary tools to carry
out its mission. The project will help to build the steering, coordination and consultative capacity
of the Ministry with the private sector and to provide it with a roadmap that will enable it to more
effectively fulfil its SME/SMI promotion mission.
Key expected results of Component I – the main results are described in the logical
framework. These are essentially to build the capacity of private sector development
support structures and to contribute to the improvement of the business environment, and
especially to ensure that: (i) the GUCE is deployed in some provinces of the country; (ii)
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the capacities of 11 CPCAI units are developed; (iii) operationalization of the Kinshasa
One-Stop-Shop is consolidated; (iv) the PPP Central Unit is established and finally
operational; (v) the capacity of OPEC is significantly built up to enable it to fulfil its
mission; and finally (vi) the National Development Strategy of SMEs is prepared and
adopted by the Government.
2.1.5 Component II: Foster the emergence of the private sector for sustained growth that will
generate sustainable jobs
Sub-Component II.A – Encourage the emergence of a critical pool of expertise to
support growth and youth employability
2.1.5.1 According to the International Labour Organization (ILO), over 65% of the DRC population is
under the age of 25 years, and those in the 15-24 year age group represent 20% of the national
population. The number of youths was approximately 15 million in 2001, representing 52.77% of the
labour force, and is projected to rise to 38 million by 2025. It is, therefore, urgent and necessary to
promote youth employability in the DRC by providing significant capacity-building to the
National Vocational Preparedness Institute (INPP). This activity will foster the emergence of a
skilled labour force which will drive the development of the private sector and especially of the mining
sector by creating a critical pool of expertise and improving youth employability through capacity-
building for INPP and support to ONEM. To that end, the project will support investments in teaching
materials and equipment to build the capacity of the Polytechnic Faculty of Lubumbashi in the mining
sector with a view to developing “mining sector local content”. The project will also help to improve
synergy between INPP and ONEM.
Capacity-building for the National Vocational Preparedness Institute (INPP): The
INPP was established on 29 June 1964 by Ordinance-Law No. 206 as a technical and
social public enterprise with a legal personality. Its mission is to improve the professional
quality of the labour force, mainly through: (i) vocational development for employed
workers, from labourers to managerial staff in public or private companies; (ii) vocational
retraining of workers who have to change professions or trades; (iii) selection and
vocational guidance either for recruitment or training; (iv) vocational preparation of the
beneficiaries of technical or vocational training that is academic or generic; (v) assistance
to businesses for the creation of their own training or selection and vocational guidance
centres; (vi) assistance to businesses to develop their own job classifications; and (vii)
provision to the authorities of the technical resources necessary for the formulation and
execution of a national vocational training policy. INPP is, therefore a key institution for
vocational preparedness and professional integration. In complementarity with the
actions of the Japan International Cooperation Agency (JICA) and main supporter
of the INPP, the PADSP-CE will provide equipment to 11 laboratories selected by
INPP at the request of businesses. These businesses will work in consultation with the
INPP to ensure that training programmes match private sector needs.
Invest in technical equipment to build the capacity of the Polytechnic Faculty of
Lubumbashi in order to promote “local content” in the mining sector. The country’s
mining potential is quite obvious and both the mining and oil sectors are the country’s
main investment sectors. Mining industries are very active in extracting the main minerals
of the DRC, namely: cobalt, copper, cadmium, diamonds, zinc, manganese, tin,
germanium, uranium, radium, bauxite, iron, coal, and coltan. Nevertheless, the tapping
and development of this immense potential requires skilled and abundant labour that can
develop local content in the value-added chain of the sector to ensure that it fully benefits
the local economy. Without development of this local content through sub-contracting
and the establishment of SMI/SMEs for the provision of related services in this value
chain, the mining sector will remain an "outward-looking enclave" with no significant
value-added for the local economy, apart from its impact on the trade balance. PADSP-
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CE will enable the Polytechnic Faculty of Lubumbashi to organize training geared
towards the acquisition of technical know-how in mining and the creation of businesses to
enhance employability and entrepreneurship in the mining value chain.
Capacity-building for the National Employment Agency (ONEM). ONEM is the
public service responsible for employment in the DRC.
It was established by Law No. 015/2002 on 16 October 2002 defininge the Labour Code
and is governed by Presidential Decree No. 081/2002 of 3 July 2002. Its main mission is
to promote employment and to organize the DRC labour market as effectively as possible,
in collaboration with the competent public or private bodies.Young graduate
unemployment has assumed dramatic proportions, with many social consequences. Given
this disturbing situation and as part of its youth support strategy and measures, ONEM
designed and developed the Graduate Employment Programme (PED) to facilitate the
employment of young graduates in the production chain through in-service vocational
training. PADSP-CE will contribute to the institutional capacity-building of ONEM
so that it can effectively fulfil its mission. The Project will also support the
implementation of the Graduate Employment Programme (PED), by ensuring the
recruitment of 10000 young graduates who are first time job-seekers with no
professional experience. The necessary measures will be taken in the project management
procedures manual to provide the necessary flexibility for the management of this
programme for young graduates and strengthen the consultative job-promotion
mechanisms between the authorities and the private sector.
Sub-Component II.B - Support to the development of SMEs/SMIs through the
promotion of business incubators/nurseries and economic empowerment of women.
2.1.5.2 This entails supporting business development through the promotion of SME/SMIs and
especially the small-scale manufacturing industry which is the key driver for large-scale job creation. To
that end, PADSP-CE will support the establishment of incubators and nurseries, especially in the timber
industry to ensure that timber processing value-added becomes a priority in the DRC, as well as in fish
farming. It will also provide substantial support to the economic empowerment of women through two
components: (i) broad-based support to the Job Creation and Income Generation Framework Programme
for women (PROCER) whose beneficiaries will increase from 200 women in 2014 to 9000 before 2019
through the support provided to very small enterprises managed by women; and (ii) training of 300
women entrepreneurs in the 11 provinces of the country through the association of female heads of
businesses of the DRC
Support to SME/SMI development through the promotion of business
incubators/nurseries. The DRC is a glaring paradox characterized by the striking
contrast between abundant natural resources (agriculture, forestry, mining and energy
resources) and the low level of national production (one third of food needs imported),
between poverty and the entrepreneurial spirit of the citizens and the low numerical
density of SMEs in the formal economy. In order to address this situation, and in a bid to
help boost local production, PADSP-CE intends to support the Government's policy and
promote local entrepreneurship through "incubators-nurseries for pilot enterprises", under
the supervision of the SME section of the Federation of Enterprises of Congo (FEC), a
hybrid structure comprising the Chamber of Commerce and the Employers' Association.
FEC, which is a very dynamic body, is the largest professional organization and the
uncontested network at the service of the business community. According to data from
the Customs and Excise Authority, the DRC imports 200,000 tonnes of fish per year to
meet its demand for fish estimated at 450,000 tonnes. Furthermore, the country’s exports
are essentially composed of mining products, most of which leave the country without the
slightest processing, as well as undressed timber. Given this context and, in order to boost
local production, PADSP-CE will support the establishment of: (i) an incubator-nursery
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for pilot fish-farming businesses; and (ii) an incubator-nursery for pilot timber processing
businesses.
Support for the economic empowerment of women in the DRC. The concept of
economic empowerment of women often refers to their capacity to influence the socio-
economic development of their environment. However, this is possible only if they are
provided with the resources, tools and capability to participate fully in making the
decisions that impact their lives. Consequently, training is a central aspect of this process,
especially in a country such as the DRC. Hence, through various training programmes,
coaching and business guidance, DRC women will develop the necessary skills and
expertise needed to manage their businesses and to participate actively in community
decision-making. PADSP-CE will support the implementation of training for women
entrepreneurs by supporting the National Commission of Women Entrepreneurs
(CNFE/FEC).
- Support to women managers of very small enterprises. To contribute to the
enhancement of the economic empowerment of women in the DRC through the
promotion of very small enterprises managed by women, the Job Creation and
Income Generation Framework Programme (PROCER) was set up by Decree
No. 05/006 of 23 February 2005 of the President of the Republic. However, it is
important to note that since its establishment, the resources allocated to it by the
Public Treasury fall far short of its assigned missions. The choice of women is
based on two main reasons: The first reason is the high proportion of women within
the total population. According to INS projections on the DRC population in 2014,
women represented 51% of the total population. The second reason is that women
are currently one of the main pillars of life and survival for DRC households.
Indeed, it is women who meet the needs of most households, thanks to their
activities within the informal economy. Consequently, promoting the economic
empowerment of women will lead to sustainable poverty reduction in the DRC,
while promoting female entrepreneurship and very small businesses.
- The GPRSP makes a distinction between three categories of poor women, as
follows: (i) very poor women; (ii) poor and fragile women; and (iii) poor but
stable women. Until now, PROCER has targeted only very poor women for two
reasons: (i) they are more numerous; and (ii) they are the ones who experience the
greatest difficulties in meeting the needs of their households. This programme is
being implemented in the city/province of Kinshasa and in the provinces of
Bandundu, Bas Congo, Kasaï Oriental and North Kivu. The Technical Secretariat of
PROCER intends to extend this programme to all the municipalities within the City
of Kinshasa and to the rest of the country. The possible increase of resources and
acquired experience currently enables STPE/PROCER to also include the other two
categories of women into the programme. The specific targeted objective is to
generate decent and regular incomes for the women beneficiaries of the
programme and the expected outcome is the creation of 9,000 consolidated direct
female jobs in the city of Kinshasa and in the Central Zone, especially in the two
Kasaïs (Kasaï Oriental and Kasaï Occidental). PADSP-CE will contribute to the
economic empowerment of: (i) 5,000 very poor women; (ii) 2,000 poor and
fragile women; and finally (iii) 2,000 poor but stable women. The necessary
measures will be taken in the project management procedures manual to provide all
the flexibility needed for the management of this programme for women.
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The main expected results of Component 2, which seeks to foster the emergence of
the private sector with a view to achieving lasting growth that will create sustainable
jobs, are: (i) support given to 9000 women managers of very small enterprises and 9000
direct jobs created; (ii) 10,000 young graduates without professional experience are
recruited into enterprises; (iii) a pilot business incubator-nursery in fish farming is
operational; (iv) a pilot incubator-nursery in timber processing is operational; (v) 300
women entrepreneurs in the 11 provinces are trained; (vi) INPP is provided with modern
equipment to improve youth employability; and finally (vii) the Polytechnic Faculty in
Lubumbashi is provided with modern equipment to promote "local content" in the mining
sector by developing expertise that will foster the emergence of entrepreneurs and
consequently the development of local content in the mining sector value-added chain.
2.1.6 Component 3: Project Management and Coordination
Management and Coordination of Project Implementation: The project will be placed
under the oversight of the Ministry of Planning and Implementation of the Modernity
Revolution. For reasons of efficiency, the management unit of the Project to Modernize
and Revitalize Public Administration Human Resources (PMR-RH) at the Ministry of
Planning and Implementation of the Modernity Revolution is the coordination and
executing agency for PADSP-CE. Given the multi-sector nature of the project, a steering
committee, chaired by the Ministry of Planning and Implementation of the Modernity
Revolution, will be set up and be composed of heads of the structures involved in the
implementation of project activities. This committee will be responsible for assessing the
technical and financial implementation of the project and provide guidance to ensure the
timely attainment of project objectives The activities of Component 3 are: (i)
implementation of a computerized system for the accounting and financial management
of the project based on an updated Procedures Manual; (ii) establishment of the
monitoring-evaluation system of the project; (iii) preparation and regular submission of
technical and financial reports; (iv) the organization and regular attendance of project
coordination meetings; and (v) coordination of the annual audit of project accounts.
