IMF Staff Concludes Visit to the Democratic Republic of the Congo

The 2021 economic rebound, with growth estimated at 5.7 percent, was supported by the recovery in mining and service sectors; Downside risks to the outlook have increased significantly driven by external developments. This calls for sustaining prudent macroeconomic policies; Scaling up implementation of the authorities’ reform agenda will support the recovery and increase the resilience of the economy.

An International Monetary Fund (IMF) team, led by Ms. Mercedes Vera Martin, visited Kinshasa during March 1–7 to discuss recent economic and financial developments, policy priorities, and progress with structural reforms. At the end of the visit, Ms. Vera-Martin issued the following statement:

“Preliminary data confirm the economic rebound in 2021, with GDP growth estimated at 5.7 percent, supported by a recovery in mining and services. Inflation stood at 5.3 percent at the end of 2021. With inflation expected to remain subdued, the Central Bank of Congo (BCC) reduced the policy interest rate by 100 basis points at end-2021. Preliminary estimates suggest that the current account deficit narrowed to one percent of GDP in 2021, compared to 2.2 percent of GDP in 2020, thanks to high mining exports. These favorable external developments and the end-August general SDR allocation allowed for a significant increase in gross international reserves. The 2021 overall fiscal balance is estimated to have improved due to higher revenues and lower-than-projected public investment.

“The 2022 outlook remains favorable but increased downside risks to the outlook call for building up reserves and sustaining prudent macroeconomic policies to bolster resilience to external shocks. Higher global food and energy prices from the crisis due to the Ukraine conflict and mineral price volatility pose risks to inflation and growth. Higher oil prices generate significant budgetary pressures due to untargeted fuel subsidies, reducing fiscal space for needed social and infrastructure spending. The team called for transparency in setting up fuel prices and monitoring closely the impact of the subsidy on the budget. As the 2022 budget envisages scaling up public investment spending, partially financed using the SDR allocation, the team continues to support the authorities’ efforts to strengthen the capacity and governance of the institutions in charge of project implementation, monitoring, and execution to ensure an efficient and transparent use of the funds.

“The team and the authorities discussed opportunities to scale up structural reforms to sustain the recovery. Once approved by Parliament, the new commercial banking law and the anti-money laundering law will help strengthen banking supervision. Improving governance, especially in managing extractive resources and public finances, and enhancing the business climate will support private sector-led growth. Advancing structural reforms will increase economic resilience, help diversify the economy, and improve the living standards of Congolese citizens.

“The IMF team is grateful to the authorities for open and constructive discussions during the visit. The team met with Minister of the State and of the Budget Aimé Boji, Minister of Finance Nicolas Kazadi, BCC Governor Malangu Kabedi Mbuyi, other senior officials and development partners. The team looks forward to continuing the dialogue during the visit for the 2022 Article IV consultation and the second review under the ECF arrangement, planned at end-April.”

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