DR Congo wants to negotiate a new program with the IMF

2024-08-31 20:26:53

The question to be asked is whether these programs have helped to improve the economic situation of the country.

Gaston Mutamba Lucas

On 15 July 2021, the Executive Board of the IMF (International Monetary Fund) agreed to finalize the Extended Credit Facility (ECF) worth $1.5 billion. After successfully completing the FEC, the Congolese government wants to complete another program. This is according to information from the Resilience and Sustainability Facility (FRD). It is long-term financing aimed at strengthening economic resilience and sustainability. It is a question of supporting reforms that reduce the risks of climate change and pandemics with a major impact at the macroeconomic level and also of increasing the opportunity for public action and maneuvering financial reserves to the risks arising from the structural difficulties alleviate that. .

On August 23, 2021, the country benefited from a new general allocation of SDRs of $1.5 billion that helped to increase the foreign exchange reserves of the Central Bank of the Congo. The question to be asked is whether these programs have helped to improve the economic situation of the country. This resulted in relative exchange rate stability. As of December 31, 2021, the American dollar was trading on the parallel market for 2,000 francs compared to 2,850 francs today, a 30% depreciation. The inflation rate, which stood at 5.3% in 2021, rose to 13.1% in 2022 and then to 23.8% in 2023. Apart from imported inflation, the State continued to rely on financing the monetary budget deficit. In addition, the GDP growth rate remained sustained. The increase in GDP was 6.2% in 2021, 8.9% in 2022 and 8.6% in 2023. A growth rate of 4.7% is expected in 2024.

This economic growth in the country is not inclusive. It doesn’t create enough jobs. Moreover, it is mainly due to the increase in the extraction of mining products. Copper exports increased from 1,802,897 tonnes in 2021 to 2,394,630 tonnes in 2022 and then to 2,842,022 tonnes in 2023. During the same period, cobalt exports were 93,114 tonnes in 2021, 114 tonnes in 2021, 123 tonnes, 115 tonnes, 114 tonnes in 2021 , 123 tons 023. Raw gold exports were 31,803 tons in 2021, 32,337 tons in 2022 and finally 34,526 tons in 2023. Foreign trade as well as financing from the IMF and the World Bank enabled foreign exchange reserves that were, as on August 21, at $5.9 billion, or 14 months. imports of goods and services. In general, the country continues to suffer from a governance crisis. Barriers affect the economy.

On 23 August, on the recommendation of the Ministry of Finance, the Council of Ministers adopted a series of measures aimed at cleaning up the national economy. This, in addition to the prospect of receiving two budgetary supports from the World Bank in the amount of 500 million dollars each. These structural reforms will involve the establishment of a single Fund account, the digitization of public provision, the rationalization of payroll as well as the automation of the Single Window for business creation. In addition there is the restructuring of special economic zones, the strengthening of judicial security, improving the governance of public companies that are not financially viable, the revival of climate finance and the carbon market as well as improving the financial situation of SNEL and REGIDESO.

We therefore return to the same reforms that never materialized due to a lack of political will.