Updated: February 24, 2021
The executive board of the International Monetary Fund (IMF) on Monday approved the release of $368.4 million to the Democratic Republic of Congo under the Rapid Credit Facility (RCF) to enable the central African nation meet its “urgent balance of payment needs”.
In addition, the board was informed about the IMF Managing Director’s approval of a staff-monitored program (SMP) running up to May 2020.
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IMF said the SMP is intended to “guide policy implementation, provide authorities with more time to identify, prioritize, and implement reforms aimed at boosting revenue, tackling corruption, and improving governance”.
According to the IMF, the economic environment in DRC remains challenging and vulnerable to shocks.
“Real GDP growth is projected to decelerate to 4.5 percent in 2019 from 5.8 percent in 2018. The recent fall in commodity prices, new spending initiatives, and looser spending oversight during the political transition period have led to a weaker fiscal position mostly financed by the central bank. In this context, international reserves have fallen to critically low levels creating urgent balance of payment needs”.
IMF said the new government is committed to implementing measures and reforms that would strengthen macroeconomic stability, reinforce international reserves, address issues related to poor governance, a difficult business environment, and pervasive poverty.
It also intends to boost domestic revenue by restoring the functioning of the VAT and enforcing the personal income tax, while improving mining revenue forecasting. In addition, the government intends to introduce strict spending caps, increase the effectiveness of monetary policy, and foster inclusive growth and private sector development including through infrastructure projects and free basic education.