Faced with pressures on the exchange market and inflation, the IMF recommends restrictive monetary and budgetary policies

2023-04-24 17:09:05

Sunday April 23, 2023

FMI

Finance Minister Nicolas Kazadi presented the report on the participation of the government delegation in the work of the Spring Meetings of the World Bank and the IMF to the attention of the board members. In addition to the working sessions with the high-level officials of these Bretton Woods institutions, the Congolese delegation had a series of meetings respectively with the Development Committee of the World Bank Group, the IMF and the last one jointly with the World Bank. and the International Finance Corporation.

According to the minutes of the 95th meeting of the Council of Ministers, it appears that the economy of the Democratic Republic of Congo is more resilient to shocks compared to other countries in Sub-Saharan Africa, macro performance economic gains achieved in 2022 in terms of real GDP growth, international reserves and revenue mobilization have been praised by both the IMF and the World Bank.

“The government was encouraged to continue investments in the infrastructure sector and reforms aimed at improving the business environment to attract more the private sector and reduce the economy’s dependence on the mining sector”, specifies the minutes of the meeting read Friday, April 21, 2023

On the subject of pressures on the exchange market and inflation, the government was recommended restrictive monetary and budgetary policies with particular emphasis on reducing expenditure on goods and services as well as operating in favor of investment expenditure. .

“In the same vein, a decision from the government has been sought with regard to the concerns raised by the IMF about the FC 30 billion increase in the liquidating state payroll for civil servants and state employees between January and April 2023 to reach FC 714 billion with the possibility of reaching FC 800 billion by the end of 2023, which is out of step with the commitments made under the IMF-supported program,” noted Finance Minister Nicolas Kazadi.

With the IMF mission staying in Kinshasa, discussions are continuing on all these issues with a view to concluding the 4th review of the government’s economic program.

“It will also be a question of agreeing on the trigger of the trust fund for resilience and sustainability, the total amount of which in favor of our country could reach up to 1 billion USD. The Minister of Finance announced to the council that under the principle of rotation, he has on behalf of the Democratic Republic of Congo taken office as the President of the Africa 2 group of the IMF and the World Bank group composed of 23 African countries. . He was supplemented on these points by the Minister of State, Minister for the Budget who was also part of the mission dispatched to Washington DC” concluded the minutes of the meeting.

Relations between Kinshasa and the Bretton Woods institutions have improved further since Felix Tshisekedi came to power. The DRC is in a program with the IMF. After the first two agreements, IMF staff reached a staff-level agreement with the Democratic Republic of Congo on the third review of the Extended Credit Facility at the end of December 2022.

Clément MUAMBA/ACTUALITE.CD