Updated: February 28, 2021
The International Monetary Fund announced on Friday that it had reached an agreement with the Democratic Republic of Congo on financial assistance, as conflicts and epidemics worsen economic woes, and deepen poverty in one of the largest countries in central Africa.
The Congolese economy faces multiple challenges, including weakening growth, pervasive poverty, fragmented taxation system and fragile judiciary.
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“The Congolese authorities and the IMF mission reached an agreement ad-referendum on policies that would strengthen macroeconomic stability, reinforce international reserves, and advance key structural reforms to address deep-seated issues related to poor governance, a difficult business environment, and pervasive poverty,” said Mauricio Villafuerte who led an IMF team in Kinshasa November 6–15, 2019.
That reform program could be supported by the Rapid Credit Facility and a Staff-Monitored Program through end-May 2020.
IMF said the SMP would provide an opportunity for the authorities, with assistance from their partners, “to develop a deeper structural reform agenda that could eventually be implemented under a medium-term Fund-supported program”.
“The Congolese economy faces multiple challenges. GDP growth is projected to weaken to 3.2 percent in 2020 and 4.5 percent in 2019, reflecting a slowdown in mining production. However, non-extractive GDP continues to accelerate, spurred in part by increased government spending,” Villafuerte said, adding that poverty remains pervasive and is exacerbated by armed conflict and deadly epidemics in some areas of the country.
“Weaknesses of the judiciary system and fragmented taxation discourage private investment, holding back the potential of an economy that enjoys several valuable natural endowments, including a young and dynamic population,” Villafuerte added.