DRC relies on IFRS accounting standards to keep pace with international banks
Starting from 2017, all commercial banks in the Democratic Republic of the Congo must adopt the International Financial Reporting Standards (IFRS) on instructions from the Central Bank. This change should open the Congolese banking sector to more international banks but above all to meet international accounting standards.
The banking sector of the Democratic Republic of the Congo (DRC) has no choice but to enter the globalization phase in terms of both accounting standards and technology. It is emerging but above all it is the only way to sustainably support the development of the national economy at a time when the DRC does not hide its ambitions of emergence by 2030.
In this perspective, the banking sector could not remain marginal. Without a strong financial sector able to effectively finance development levers such as agriculture, industrialization, small and medium-sized enterprises; such valuable goals as economic diversification, promotion of women’s and young people’s entrepreneurship or simply popularization of the use of financial services will not be achieved.
It is within this framework that the agreement signed by the Central Bank of Congo and the Association of Congolese Banks on the adoption by 2017 of all the credit institutions of the International Financial Reporting Standards (IFRS). The International Accounting Standards Board (IASB) promulgated these accounting standards as well as those applied by the major international financial institutions.
The benefits expected by the DRC
The DRC has realized that in a globalized world where capital, markets and companies are international, financial accounting must also be international in order to achieve the objective of comparing performance statements and attracting foreign investors. Since May 2012, the DRC has an accounting guide for credit institutions (ECCAS) that is fully compliant with IFRS known as ECCG-IFRS.
IFRS will provide better visibility for Congolese banks by presenting their annual report in accordance with international accounting standards. Thus, the various financial statements of the Congolese banks can be analyzed and compared with other banking institutions on the continent or the world.
The adoption of IFRS becomes a requirement of globalization. Moreover, the partner banks of the Congolese banks will also have a good grid of reading of the performances carried out in the DRC. Equally, multinationals and foreign investors looking for a partner bank for the development of their activities in the DRC will be able to assess the financial situation and its performance correctly before deciding, since this accounts provide consistent accounting information meeting international standards.