A team from the International Monetary Fund (IMF), which stayed in Kinshasa, the capital of the Democratic Republic of Congo DRC, from October 19 to November 2, 2022, reached a staff-level agreement on the third review of the program authorities’ economic reform program supported by the Extended Credit Facility (ECF) arrangement, according to an IMF statement released on Monday (November 21st).
“Following fruitful discussions, the Congolese authorities and the IMF team have reached a staff-level agreement on economic policies for the completion of the third review under the arrangement under the the FEC,” explains Mercedes Head of Mission Vera Martin.
She stressed that “this agreement is subject to IMF management approval and Board review, expected in December 2022. Board approval will make $152.3 million available. of SDRs (about $200 million) for balance of payments support.
Regarding the country’s current economic situation, IMF experts note that real GDP is showing resilience, with an expected growth of 6.6% in 2022, supported by higher than expected mining production. Inflation is expected to exceed 12% by the end of 2022, due to rising global food and fuel prices, exacerbated by the war in Ukraine and supply chain bottlenecks.
The current account posted a surplus in the first half, the team continues, thanks to the strength of exports, and, at the end of October, gross international reserves reached around 2 months of imports, well above the target. fixed at the start of the ECF arrangement.
The domestic fiscal balance (cash basis) is projected at 1.1 percent of GDP, which is in line with program commitments. Higher fiscal revenues thanks to favorable developments in the mining sector, helped address spending pressures resulting from the escalation of the conflict in the east, increased spending in ministries and public institutions and repayment of arrears to fuel distributors.
Still according to the mission, the outlook remains positive. IMF staff forecasts growth of 6.3 percent in 2023 amid tighter domestic economic policies and a global slowdown that are expected to weigh on growth.
Among the recommendations accompanying the team’s report, experts believe that structural and governance reforms remain essential for economic diversification and private sector-led growth.
Improving anti-corruption frameworks, simplifying the tax system, continued transparency efforts in the mining sector, and implementing procedures to publish information on the beneficial owners of public contracts should improve the climate business and mobilize investment.
By OMA Newsletter N° 945 of 23/11/2022
Article published under the direction of Dr. Najib Kettani
The OMA, NGO with an Intercontinental vocation
For the development of cultural exchanges
Valuing human potential
The promotion and consolidation of Africa’s development, and
Inter-African integration
