Audit and advisory firm BDO East Africa is set to start operations in the Democratic Republic of Congo (DRC) in October, joining a growing number of Kenyan firms that are setting up shop in the East Africa Community’s newest member state.
The largely untapped DRC market has recently attracted more than 20 Kenyan firms which have either set up shop or offered a commitment to make trade investments. The biggest entrant is Equity Group which acquired Banque Commerciale du Congo in 2020, having earlier taken over ProCredit in the same market to set up its EquityBCDC subsidiary.
The entry of BDO now signals that firms offering professional business support services are beginning to follow their trading and manufacturing peers to the DRC, expecting to help them navigate the legal, tax, and regulatory environment in the country.
BDO East Africa chief executive officer Sandeep Khapre said that there is a growing demand for such services by companies that are setting up trading operations in the DRC, as well as by existing Congolese businesses which have not had access to such services previously.
“We have experience in setting up operations in new territories that have made it possible for clients to access the latest in financial services solutions which are becoming increasingly necessary to assist them to navigate the ever-changing business landscape. Our soon-to-be-open Kinshasa office will offer clients these solutions,” said Mr Khapre.
BDO East Africa is part of BDO International — a worldwide network of public accountancy firms operating in 167 countries. In the East Africa region, the firm has offices in offices in Kenya, Uganda, Tanzania, Rwanda, and Ethiopia.
The move by firms to set up shop in the DRC mirrors what happened when South Sudan gained independence in 2011 and later joined the EAC, attracting regional capital as businesses sought to take advantage of the nascent market in an oil-backed economy.
However, civil strife has hurt the prospects of businesses in South Sudan, including banks that have suffered high rates on non-performing loans.
In 2014, KCB shut three branches in South Sudan after war broke out, while Equity Bank closed seven of its 12 branches in the country in 2017.
The DRC has also experienced strife but does enjoy a relative calm in most major cities and a large market of 90 million people.
Improve tax systems
In April, a trade mission organised by the Kenya and DRC governments in partnership with Equity Group saw 26 Kenyan companies commit to investing up to $1.6 billion (Sh189 billion) in the DRC .
Equity Group disclosed that Rentco Africa Limited, Optiven Group, Greenlight Planet Limited, Jumbo Foam Limited, BIDCO, Geomaps, and Nyanja Associates were among those making these commitments.
DRC President Felix Tshisekedi said his government would put in place reforms to protect investment, improve the legal and security environment and improve tax systems to allow the flow of goods in and out of DRC and access to loans for economic co-operators.