End-of-Mission press releases include statements of IMF staff teams that convey preliminary findings after a visit to a country. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board. Based on the preliminary findings of this mission, staff will prepare a report that, subject to management approval, will be presented to the IMF’s Executive Board for discussion and decision.
- IMF staff and the authorities have reached a staff-level agreement on the second review under the three-year Extended Credit Facility (ECF) arrangement.
- The Congolese economy recovered in 2021, but spillover effects from the war in Ukraine are expected to weigh on the economy due to a surge in global food and fuel prices.
- Sustaining reform efforts to improve public finance management, the business climate and governance remain critical to promote inclusive growth.
Washington, DC: An International Monetary Fund (IMF) mission led by Mercedes Vera Martin visited Kinshasa from April 27 to May 9 to conduct discussions on the 2022 Article IV consultation and the second review of the Democratic Republic of the Congo’s (DRC) economic and financial program supported by the Extended Credit Facility (ECF) arrangement. The DRC’s 36-month ECF arrangement for SDR1,066 million (100 percent of quota, about US$1.52 billion) was approved by the Executive Board on July 15, 2021, to help meet financing needs associated with the COVID-19 pandemic (see Press Releases No. 21/217). The first review was completed mid-December 2021 (see Press Releases no. 21/379).
At the end of the mission, Ms. Vera-Martin issued the following statement:
The IMF staff team and the Congolese authorities reached a staff-level agreement for the second program review. This staff-level agreement is subject to IMF management approval. The Board is expected to meet on this review and Article IV consultation in late June 2022.
“Real GDP growth, estimated at 6.2 percent, rebounded in 2021 supported by mining and services, while inflation stood at 5.3 percent at the end of 2021. The current account deficit narrowed to one percent of GDP, thanks to high mining exports. A rebound in the mining sector allowed for a significant increase in gross international reserves, reaching close to US$3 billion or 6.4 weeks of imports at end-2021. The overall fiscal deficit improved to 1 percent of GDP due to higher revenues and lower-than-projected investment.
“In this context, the implementation of the ECF-supported program has remained satisfactory. Preliminary data suggests that all the end-December 2021 performance criteria were met. However, the indicative target on priority health spending was missed due to shortcomings in implementation and agency coordination. The authorities also made progress on the structural reform agenda.
“Notwithstanding significant downside risks, including those related to the war in Ukraine, the outlook for 2022 remains relatively favorable and provides opportunities to consolidate macroeconomic stability. Growth has been revised to 6.1 percent from 6.4 percent. A small current account surplus, driven by higher grants and a relatively stable trade deficit, will support further reserve accumulation. Higher global food and energy prices are expected to weight on inflation and increase current spending due to untargeted fuel subsidies. However, the fiscal deterioration is expected to be contained thanks to strong revenue performance.
“Staff welcomes the authorities’ commitment to strengthen reform efforts to contain current spending and to pace investment expenditure to absorption capacity. A gradual fuel subsidy reform will reduce fiscal pressures and create space for more effective targeted social transfers to protect the poor from future price adjustments. Containing the wage bill while providing adequate remuneration relies on a comprehensive civil service reform that streamlines personnel, revises the wage grid, and provisions for retirement. Other reforms to continue mobilize revenues, improve public investment/finance management, and fiscal governance remain critical to enhance the efficiency of public finances.
“Discussions also addressed reforms at the Central Bank of Congo to improve safeguards, strengthen the monetary policy framework, continue to increase international reserves, and improve banking supervision, while supporting financial inclusion.
“Advancing structural reforms remains critical for inclusive growth and social inclusion. Supporting economic activity will require addressing the large infrastructure needs, with strict prioritization and timely implementation of growth-enhancing investment projects. Simplifying the tax system and improving the business climate and governance remain crucial to support economic diversification, mobilize investment, and promote private sector-led growth. The global energy transition provides opportunities, including in mobilizing climate finance.
“The mission would like to thank the DRC’s authorities for their strong cooperation and the constructive discussions.”
“The mission met with President of the Republic Chief of Staff Guylain Nyembo Mbwizya, Deputy Prime Minister and Minister of Public Service Jean-Pierre Lihau Ebua, State Minister for Budget Aimé Boji, Minister of Finance Nicolas Kazadi, Minister of Mining Antoinette Nsamba Kalambayi, BCC Governor Malangu Kabedi Mbuyi, other senior officials, development partners, as well as representatives of the private sector and civil society.