## EXECUTIVE SUMMARY ## Source details **Canonical URL:** [EXECUTIVE SUMMARY](https://www.imf.org/-/media/files/publications/cr/2026/english/1cogea2026001-source-pdf.pdf) ## Other formats - [Markdown version](/-/media/files/publications/cr/2026/english/1cogea2026001-source-pdf.pdf.md) - [Structured JSON version](/-/media/files/publications/cr/2026/english/1cogea2026001-source-pdf.pdf.json) --- ### Context and key vulnerabilities - Congo’s economic performance and outlook remain fragile, with 2025 growth well below potential due to weak public investment and energy supply disruptions weighing on the non-hydrocarbon sector. - Persistent liquidity constraints have intensified fiscal, external, and debt vulnerabilities. - Fiscal discipline weakened significantly in 2025: sizeable overspending occurred while revenues were compressed by lower oil prices, contributing to arrears accumulation and debt rollovers at unfavorable terms. - Sovereign-bank nexus vulnerabilities and liquidity tensions in regional treasury markets remain heightened. - About half of the population lives below the international poverty line of USD 2.15 per day; per capita GDP contracted by 0.8 percent during 2021–24. - Structural reform delays have hindered progress on public finance, debt management, and the business environment. ### Recent economic developments and outlook - Growth - Real GDP growth: 2.1 percent in 2024; estimated 2.4 percent in 2025. - Non-hydrocarbon growth in 2025: 2.1 percent. - Hydrocarbon growth in 2025: 3.3 percent. - Projected growth: 2.8 percent in 2026; medium-term (2027–30) average projected at 3.6 percent. - Authorities’ projections: 3.1 percent for 2025 and 3.6 percent for 2026. - Inflation - Average annual inflation: 3.1 percent in 2024. - Inflation bounced to 4.2 percent by April 2025, then eased over the remainder of 2025. - Inflation projected at 2.8 percent in 2026 and 3 percent in 2027. - External position - Current account deficits: 3 percent of GDP in 2024 and 5.8 percent of GDP in 2025. - Congo’s contribution to regional net foreign assets: CFAF 52 billion at end-2024 and projected CFAF 144 billion for end-2025. - 2025 fiscal outcomes (preliminary end-September) - 2025 non-hydrocarbon primary deficit projected at CFAF 640 billion (8.7 percent of non-hydrocarbon GDP). - Overall balance projected at a marginal surplus of CFAF 30 billion (about 0.3 percent of GDP). - Payment floats stood at CFAF 238 billion (about 2.6 percent of GDP) at end-September 2025. - Text Table 1 illustrative differences (CFAF billion): Total Revenue and grants: CR25/75 2,293; Actual 2,263; Difference -30. Hydrocarbon: CR25/75 1,223; Actual 1,213; Difference -1. Expenditure: CR25/75 2,059; Actual 1,939; Difference -120. - Debt and market operations - Total public debt projected at 97.2 percent of GDP at end-2025 (domestic debt 58.9 percent of GDP). - Total debt stock projected to exceed previous projections (CR25/75) by 6.8 percent of GDP at end-2025. - External public debt: USD 5.4 billion (37.5 percent of GDP) in 2024; rose to 38.4 percent of GDP in 2025. - External arrears include CFAF 60 billion (about 0.7 percent of GDP) to bilateral and multilateral lenders and CFAF 87 billion to commercials. - Eurobond issuances: November 2025 USD 670 million (coupon 9.875 percent; yield 13.7 percent; maturity 7 years including 2-year grace); December 2025 USD 260 million (coupon unchanged; yield 13 percent). November–December 2025 eurobonds totaled USD 930 million (6 percent of GDP). - February 2026 announcement: additional Eurobond issuance of USD 700 million (maturing in 2035 with a yield of 11.625 percent) announced by authorities (transaction not included in macro tables and DSA at report finalization). - Reprofiling in late 2024: CFAF 1,136 billion (12.7 percent of GDP) of domestic debt. - Gross issuance of new securities on the regional market remained elevated in Q4 2025, limiting easing of bank liquidity pressures. ### Risks and downside scenarios - Key downside risks - Continued weak oil prices and production shortfalls could significantly affect fiscal and debt dynamics. - Regional banks’ unwillingness to absorb Congolese treasuries could create sizeable funding gaps. - Lack of spending discipline and unfavorable debt rollover in a context of high debt service. - Energy supply disruptions or imported inflation via food and energy could reignite inflationary pressures. - Staff downside scenario (assumptions) - 10 percent oil price decline from 2026 onwards. - Bank lending capacity restricted to the existing 25 percent of assets exposure limit to the Congolese sovereign over 2025–26, before gradually fading out afterwards. - Scenario assumes no policy response. - Downside scenario impacts (staff estimates) - Additional financing needs: 3.8 and 1.9 percent of GDP over 2026–27. - Primary balance worsens by 0.8 percent of GDP in 2026 under the downside scenario. - Central bank net foreign assets projected for end-2026 would decline by 47 percent; decline narrows to 15 percent by end-2030. - More than two thirds of the 2026 additional financing needs—3 percent of GDP—stem from domestic financing constraints of a heavily exposed banking system. - Growth dampened: lower oil prices slow hydrocarbon export revenues and domestic aggregate income and demand, reducing growth in 2026 by an annual 18 to 29 bps over 2026–30. ### Fiscal stance, 2026 budget, and staff projections - 2026 fiscal targets and composition - 2026 non-hydrocarbon primary deficit target: 7.9 percent of non-hydrocarbon GDP. - Hydrocarbon receipts budgeted at 11.1 percent of GDP. - Non-hydrocarbon revenues projected at 14.1 percent of GDP. - Authorities anticipate 1.3 pp in gains from tax reforms; IMF staff projects yields of 0.8 pp. - Staff’s 2026 projection versus authorities (percent of GDP adjustments, Text Table 2 highlights) - Total Revenue and Grants: Planned 1.8 / Projected 0.6 / Difference -1.2. - Revenue: 1.4 / 0.4 / -1.0. - Non-hydrocarbon revenue: 1.3 / 0.6 / -0.6. - Expenditure: -0.3 / 1.0 / 1.3. - Interest: -1.5 / 0.6 / 2.1. - Capital expenditure: 3.0 / 2.3 / -0.7. - Overall balance, cash basis: 2.1 / -0.4 / -2.5. - Staff’s resulting projection for 2026: overall fiscal deficit of 0.1 percent of GDP versus a budgeted surplus of 2.4 percent of GDP. ### Fiscal policy recommendations (selected) - Maintain a carefully balanced fiscal consolidation underpinned by structural reforms. - Revenue mobilization - Accelerate efforts to broaden the tax base. - Streamline tax and customs exemptions. - Continue digitization of tax and customs administrations (e.g., Unique Identification Numbers, invoicing, FOUTA platform). - Expenditure rationalization - Prioritize capital and social expenditures that support sustainable and inclusive economic growth. - Tighten control of goods and services, wages, and energy subsidies. - Rationalize transfers to public entities with autonomous budgets. - Debt management and treasury operations - Strengthen public financial and debt management; fully operationalize the Treasury Single Account (TSA), SIGFIP, and reorganized debt management office (CCA). - Improve coordination to prevent arrears accumulation and manage liquidity pressures. - Financial sector policies - Intensify prudential monitoring of banks; enforce prudential concentration limits and consider gradual removal of zero risk weights on regional sovereign exposures. - Promote financial deepening and diversify the investor base away from reliance on regional treasury markets. - Governance and structural reforms - Advance transparency and governance reforms, including publishing EITI-compliant concession registers and beneficial ownership data, and strengthening legal protection for civic space and whistleblowers. - Reform SOE governance and conduct external audits of SOEs. ### Public Financial Management (PFM) and public investment - Urgent PFM measures - Strictly adhere to budget appropriation ceilings and limit recourse to exceptional procedures. - Plan for contingency funds in annual budgets. - Integrate arrears clearance into treasury planning; ensure budgets align with realistic revenue and cash-flow forecasts. - Fully leverage the treasury committee and complete rollout of the TSA (TSA formally established under BEAC–Congo agreement but operationalization constrained by technical delays). - SIGFIP - Full implementation needed; budgetary and accounting modules require finalization and integration. - Progress limited since early 2025; recruitment of international experts underway. - Public investment management and SOE reforms - Strengthen public investment management and implement forthcoming investment law. - Adopt and implement law on SOE governance; conduct external audits and strengthen monitoring of SOE fiscal risks. - Publish quarterly debt bulletin; improve debt data coverage and timeliness. ### Debt management and DSA findings - Debt classification and outlook - Overall and external debt classified as “in distress” yet “sustainable” conditional on significant and sustained fiscal adjustment. - Total public debt estimated to have reached 97.3 percent in 2025. - Domestic debt projected at about 58.8 percent of GDP in 2025. - Arrears and reprofiling - By July 2024 all legacy external arrears—except disputed and pre-HIPC claims—were resolved; temporary recurring external arrears accumulated starting in 2025 until February 2026. - Preliminary data end-February 2026: USD 103.2 million (0.66 percent of GDP) new external arrears to official creditors; USD 149.6 million (0.96 percent of GDP) arrears to commercial creditors recognized. - Reprofiling executed in 2024: CFAF 1,136 billion (12.7 percent of GDP); average maturity of exchanged treasuries extended from 2.4 years to 6.3 years. - DSA risk ratings and indicators - Risk of external debt distress: In Debt Distress. - Overall risk of debt distress: In Debt Distress. - Composite index (CI): 2.5 (weak debt carrying capacity). - PV of public debt-to-GDP indicator exceeds benchmark through 2036 in baseline; PV of external debt-to-GDP breaches threshold in 2025 (baseline). - PV of debt service-to-exports breaches threshold in 2028 (baseline) and 2026–32 (historical scenarios). - PV of debt service-to-revenue breaches threshold in 2026–29 (baseline) and 2026–32 (historical). - Recommended debt actions - Operationalize inter-institutional committees; finalize medium-term debt management strategy; align amortization, arrears clearance, and issuance plans. - Prioritize clearing domestic arrears and publish audited debt bulletins; train CCA staff and implement debt management tools (Système de Gestion et d’Analyse de la Dette). ### Financial sector risks and recommendations - Banking sector exposures and indicators - Bank assets reached 48 percent of GDP at end-October 2025. - Exposures to CEMAC sovereigns rose from 25 to 30 percent of bank assets since end-2021. - Several banks report sovereign exposures exceeding 30 percent of assets. - End-2023 NPLs: 15.2 percent of risk-weighted assets; provisioning at 65 percent. - Returns on equity (assets) averaged 37 (3.1) percent in 2024 (end-2024 preliminary data); signs of rapid softening thereafter. - Regional absorption limits - Regional banks’ exposure to the Congolese sovereign already well beyond CFAF 2 trillion; capacity to absorb additional treasuries approaching limits. - Staff recommendations - Fiscal consolidation and proactive debt management to reduce reliance on regional treasury markets. - Enforce prudential standards, enhance financial stability monitoring, and improve crisis preparedness (high-frequency prudential reporting and stress tests). - Diligently enforce prudential concentration limits and promote non-bank investor base over time. - Safeguards - BEAC’s implementation of 2022–23 safeguards recommendations has been slow; efforts under way on governance; staff continues follow-up. ### Transparency, governance, and anti-corruption - Progress and gaps - Adopted statute for Court of Accounts magistrates; released 2023 EITI report. - Delays in publishing EITI-compliant mining and forestry concession registers and beneficial ownership information due to financing constraints. - Publication of financial statements and production statistics for public enterprises and extractive projects remains outstanding. - Staff advice - Strengthen legal protection for civic space and whistleblowers; require cabinet members’ conflict-of-interest disclosures; ensure timely publication of HALC and CNTR reports. - Commission developing beneficial ownership register regulation requires financial support and technical assistance. ### Capacity to repay the Fund (CtR) - Baseline assessment - CtR assessed as adequate under the baseline scenario but subject to significant risks. - Outstanding Fund credit peak: maximum of 3 percent of GDP in 2025 (SDR 349.9 million, 216 percent of quota). - Debt service to the Fund at peak expected to reach 0.4 percent of GDP; 1.9 percent of tax revenue; 1.3 percent of exports of goods and services. - Downside scenario impact on CtR - Under downside scenario, CtR would weaken but remain adequate. - Outstanding Fund credit in 2026 would stand at 12.5 percent of tax revenue and 7.7 percent of exports of goods and services—compared with 11.9 percent and 7 percent, respectively, in the baseline. - Fund credit would continue to account for less than 10 percent of external debt. - Debt service to the Fund ratios would rise marginally: during 2028–33 they would increase by about 0.1 percentage point on average for exports and tax revenue, and by 0.5 pp for imputed gross reserves. - Key caveats - Sizeable funding gaps could challenge repayment capacity if regional bank appetite for Congolese treasuries dries up and oil prices decline considerably. - Recent deterioration in debt management and accumulation of arrears represent a significant vulnerability to repayment capacity. ### Staff appraisal and policy priorities - 2025 developments and outlook - Fiscal slippages and mounting liquidity pressures in 2025 intensified debt vulnerabilities and weakened growth prospects. - Overspending resulted in a setback to fiscal consolidation, slowing debt reduction and heightening financing challenges within a more challenging sovereign-bank nexus. - Softer-than-expected non-hydrocarbon growth and under-executed public capital spending reduced medium-term growth prospects. - Policy imperatives (priority actions) - Sustain fiscal discipline and control expenditure after 2025 slippages. - Implement revenue reforms in the 2026 budget law and reinforce spending rationalization to anchor growth-friendly fiscal prudence. - Prioritize higher revenue and high-quality capital and essential social spending to ease liquidity tensions, preserve debt sustainability, and foster inclusive growth. - Accelerate fiscal structural reforms: modernize tax and customs administrations, rationalize tax exemptions, and strengthen audit and monitoring capacity. - Improve debt management and macroprudential alertness: fully implement CCA reorganization steps; revise medium-term debt management strategy; coordinate proactively with primary dealers and intensify prudential monitoring. - Prioritize governance and transparency to improve business conditions and encourage private sector dynamism. ### Key numerical indicators and projections (selected, exact figures preserved) - Fund credit peak: maximum of 3 percent of GDP in 2025 (SDR 349.9 million, 216 percent of quota). - Projected Fund debt service peak: 0.4 percent of GDP; 1.9 percent of tax revenue; 1.3 percent of exports of goods and services. - Downside scenario shocks: 10 percent oil price decline from 2026 onwards; bank exposure limit 25 percent of assets to the Congolese sovereign over 2025–26. - Additional financing needs in downside scenario: 3.8 and 1.9 percent of GDP over 2026–27. - Primary balance impact: worsens by 0.8 percent of GDP in 2026 under the downside scenario. - Central bank net foreign assets: projected decline by 47 percent at end-2026; decline narrows to 15 percent by end-2030. - Selected Table 1 series (GDP and prices, percent): GDP at constant prices: 2.1 3.7 2.4 2.8 3.3 3.7 3.7 3.6 3.6. Consumer prices (period average): 3.1 3.3 2.6 2.8 3.0 3.0 3.0 3.0 3.0. - Total public debt (percent of GDP): 98.0 90.4 97.2 93.0 86.9 80.0 73.0 66.7 61.0 (selected years as listed). - Table 2a examples (CFAF billions): Total Revenue and Grants: 2,263 2,460 2,197 2,359 2,455 2,340 2,511 2,660 2,809 2,970 3,131. Hydrocarbon revenue (sample): 1,214 1,258 995 1,055 1,044 1,011 1,080 1,114 1,133 1,144 1,153. *Republic of Congo — International Monetary Fund* ### EXECUTIVE SUMMARY ### EXECUTIVE SUMMARY ### Context and key vulnerabilities - Congo’s economic performance and outlook remain fragile, with 2025 growth well below potential due to weak public investment and energy supply disruptions weighing on the non-hydrocarbon sector. - Persistent liquidity constraints have intensified fiscal, external, and debt vulnerabilities. - Fiscal discipline weakened significantly in 2025: sizeable overspending occurred while revenues were compressed by lower oil prices, contributing to arrears accumulation and debt rollovers at unfavorable terms. - Sovereign-bank nexus vulnerabilities and liquidity tensions in regional treasury markets remain heightened. - About half of the population lives below the international poverty line of USD 2.15 per day, while per capita GDP contracted by 0.8 percent during 2021–24. - Structural reform delays have hindered progress on public finance, debt management, and the business environment. ### Recent economic developments and outlook - Growth - Real GDP growth: 2.1 percent in 2024; estimated 2.4 percent in 2025. - Non-hydrocarbon growth in 2025: 2.1 percent (1.6 percentage point short of expectations). - Hydrocarbon growth in 2025: 3.3 percent. - Projected growth: 2.8 percent in 2026 (0.6 pp lower than expected at the 6th ECF review); medium-term (2027–30) average projected at 3.6 percent. - Authorities’ projections: 3.1 percent for 2025 and 3.6 percent for 2026 (authorities more optimistic). - Inflation - Average annual inflation: 3.1 percent in 2024 (down from 4.3 in 2023). - Inflation bounced to 4.2 percent by April 2025, then eased over the remainder of 2025. - Inflation projected at 2.8 percent in 2026 and 3 percent in 2027. - External position - Current account deficits: 3 percent of GDP in 2024 and 5.8 percent of GDP in 2025. - Congo’s contribution to regional net foreign assets: CFAF 52 billion at end-2024 and projected CFAF 144 billion for end-2025. - Fiscal outcomes (2025 preliminary end-September data indicate substantial slippages) - 2025 non-hydrocarbon primary deficit projected at CFAF 640 billion (8.7 percent of non-hydrocarbon GDP). - Overall balance projected at a marginal surplus of CFAF 30 billion (about 0.3 percent of GDP). - Payment floats stood at CFAF 238 billion (about 2.6 percent of GDP) at end-September 2025. - Text Table 1 highlights differences versus CR25/75 (examples from table): - Total Revenue and grants: CR25/75 2,293; Actual 2,263; Difference -30 (units CFAF billion). - Hydrocarbon: CR25/75 1,223; Actual 1,213; Difference -1 (CFAF billion). - Non-hydrocarbon: CR25/75 1,011; Actual 1,010; Difference -1 (CFAF billion). - Expenditure: CR25/75 2,059; Actual 1,939; Difference -120 (CFAF billion). - Non-hydrocarbon primary balance: CR25/75 -631; Actual -471; Difference 161 (CFAF billion). - Overall balance: CR25/75 234; Actual 324; Difference 89 (CFAF billion). - Debt developments - Total public debt projected at 97.2 percent of GDP at end-2025 (domestic debt 58.9 percent of GDP). - At end-2025, total debt stock projected to exceed previous projections (CR25/75) by 6.8 percent of GDP. - External public debt: USD 5.4 billion (37.5 percent of GDP) in 2024; rose to 38.4 percent of GDP in 2025. - External arrears include CFAF 60 billion (about 0.7 percent of GDP) to bilateral and multilateral lenders and CFAF 87 billion to commercials. - Eurobond issuances: November 2025 USD 670 million (coupon 9.875 percent; yield 13.7 percent; maturity 7 years including 2-year grace); December 2025 USD 260 million (coupon unchanged; yield 13 percent). Both tranches: principal repaid in five equal installments between November 7, 2028 and November 7, 2032. - November–December 2025 eurobonds totaled USD 930 million (6 percent of GDP). - February 2026 announcement: additional Eurobond issuance of USD 700 million (maturing in 2035 with a yield of 11.625 percent) announced by authorities (transaction not included in the macro tables and DSA at report finalization). - Treasury market and rollover risks - Reprofiling in late 2024: CFAF 1136 billion (12.7 percent of GDP) of domestic debt. - Debt service due in 2026 remains sizeable, reflecting shorter maturities of domestic securities. - Gross issuance of new securities on the regional market remained elevated in Q4 2025, limiting easing of bank liquidity pressures. - Sovereign-bank nexus remains elevated; financing conditions on regional treasury markets continue to be tight. ### Risks and downside scenarios - Key downside risks: - Continued weak oil prices and production shortfalls could significantly affect fiscal and debt dynamics. - Regional banks’ unwillingness to absorb Congolese treasuries could create sizeable funding gaps. - Lack of spending discipline and unfavorable debt rollover in a context of high debt service. - Energy supply disruptions or imported inflation via food and energy could reignite inflationary pressures. - Staff projects a cautious fiscal outlook with more prudent revenue assumptions than authorities and gradual rebalancing of expenditures toward investments and social spending. ### Fiscal policy recommendations - Maintain a carefully balanced fiscal consolidation underpinned by structural reforms. - Revenue mobilization - Accelerate efforts to broaden the tax base. - Streamline tax and customs exemptions. - Continue digitization of tax and customs administrations to enhance efficiency and free up resources for debt service and pro-poor spending. - Expenditure rationalization - Prioritize capital and social expenditures that support sustainable and inclusive economic growth. - Tighten control of goods and services, wages, and energy subsidies. - Rationalize transfers to public entities with autonomous budgets (noting partial offsetting effect in 2025). - Debt management and treasury operations - Strengthen public financial and debt management to improve fiscal planning and reduce vulnerabilities. - Fully operationalize the treasury single account, the financial management information system (SIGFIP), and the reorganized debt management office. - Improve coordination to prevent arrears accumulation and manage liquidity pressures. - Financial sector policies - Intensify prudential monitoring of banks and robust application of effective prudential standards to mitigate vulnerabilities from the high sovereign-bank nexus. - Promote financial deepening to diversify the financial system and reduce reliance on regional treasury markets. - Governance and structural reforms - Advance transparency and governance reforms to promote private sector investment and improve the business environment. - Address institutional weaknesses to support stronger non-hydrocarbon growth and social safety nets. ### Capacity to repay the Fund - Congo’s capacity to repay the Fund is assessed as adequate but subject to significant risks in the outer years under both the baseline and downside scenarios. - Capacity to repay is supported by: - Overall fiscal surpluses in the near term. - The authorities’ commitment to correct recent fiscal slippages and continue with consolidation. - Congo’s track record in repaying the Fund. - Sizeable funding gaps could challenge repayment capacity if regional bank appetite for Congolese treasuries dries up and oil prices decline considerably. *Executive Summary, February 27, 2026.* ### 11. Sustaining fiscal discipline is critical to safeguarding debt sustainability, strengthening ### 11. Sustaining fiscal discipline is critical to safeguarding debt sustainability, strengthening ### Fiscal stance and 2026 budget - Purpose: Restore fiscal discipline and improve spending quality through stronger non-hydrocarbon revenue mobilization and reallocation toward investment and social transfers. - 2026 non-hydrocarbon primary deficit target: 7.9 percent of non-hydrocarbon GDP (about 0.8 pp below the estimated end-2025 deficit). - Hydrocarbon receipts budgeted at 11.1 percent of GDP. - Non-hydrocarbon revenues projected at 14.1 percent of GDP. - Authorities anticipate 1.3 pp in gains from tax reforms; IMF staff projects yields of 0.8 pp. - Planned tax-reform measures: - Continued digitalization of the tax administration and invoicing, leveraging Unique Identification Numbers. - Removal of corporate income tax (CIT) exemptions. - Broadening the excise tax base alongside higher rates on selected items and reducing VAT exemptions (e.g., remove exemptions for machinery, agricultural equipment, and agropastoral and fish farming inputs). - Staff’s assessment: broadly aligned with the budget but with more conservative revenue projections, higher interest payments, and a more gradual expenditure rebalancing. - Risks to execution: - Revenue gains from tax reforms expected to materialize more gradually; elimination of CIT exemptions largely offsets the CIT rate reduction. - Adjustments to excise tax bases and rates expected to yield only modest revenue gains (0.07 percent of GDP). - Lingering election-related spending could increase goods and services outlays. - Liquidity tensions and absorption capacity constraints likely to restrain capital spending. - Staff projects a higher interest bill reflecting realistic gross financing needs and rollover conditions. - Resulting staff projection for 2026: overall fiscal deficit of 0.1 percent of GDP versus a budgeted surplus of 2.4 percent of GDP. ### 2026 Fiscal Adjustments (Text Table 2) - Planned by Authorities / Projected by IMF staff / Difference (Percent of GDP): - Total Revenue and Grants: 1.8 / 0.6 / -1.2 - Revenue: 1.4 / 0.4 / -1.0 - Hydrocarbon revenue: 0.1 / -0.2 / -0.4 - Non-hydrocarbon revenue: 1.3 / 0.6 / -0.6 - Domestic taxes: 1.0 / 0.5 / -0.5 - Direct taxes: -0.1 / - / - - Taxes on goods and services: -0.4 / - / - - Customs Receipts: 0.3 / 0.3 / 0.0 - Non-tax revenue: -0.1 / -0.3 / -0.2 - Grants: 0.5 / 0.2 / -0.2 - Expenditure: -0.3 / 1.0 / 1.3 - Current expenditure: -3.3 / -1.3 / 2.0 - Wages: -0.1 / 0.0 / 0.1 - Other primary current expenditure: -2.3 / -2.2 / 0.1 - Goods and services: -3.6 / -2.8 / 0.9 - Transfers: 1.5 / 0.9 / -0.6 - Social Transfers (Lisungi, COVID-19 and others): 1.0 / 0.5 / -0.5 - Oil-related transfers: -0.4 / -0.5 / 0.0 - Other transfers: 0.9 / 0.8 / -0.1 - Common charges: -0.2 / -0.3 / -0.1 - Annex budgets and special accounts: 0.7 / 0.4 / -0.2 - Interest: -1.5 / 0.6 / 2.1 - Domestic: -1.8 / -0.1 / 1.7 - External: 0.3 / 0.7 / 0.4 - Capital expenditure: 3.0 / 2.3 / -0.7 - Domestically financed: 2.0 / 1.3 / -0.6 - Externally financed: 1.0 / 0.9 / -0.1 - Non-hydrocarbon primary balance: 0.5 / 0.4 / -0.1 - Primary balance: 0.6 / 0.2 / -0.4 - Overall balance, cash basis: 2.1 / -0.4 / -2.5 ### Medium-term outlook and staff recommendations - Objective: Bolster debt sustainability and restore external buffers through continued prudent fiscal stance and gradual narrowing of the non-hydrocarbon primary deficit. - By end-2030 projection: non-hydrocarbon primary deficit declines to 2.4 percent of non-hydrocarbon GDP. - Key policy pillars: - Sustained efforts to boost non-hydrocarbon revenue mobilization. - Strict control of recurrent outlays and containment of the wage bill. - Further reprioritization of expenditure toward high-return capital investment and social sectors. - Streamlining energy subsidies while supporting vulnerable groups with targeted safety nets. - Strengthened public financial management. - Structural reforms needed to unlock revenue and strengthen consolidation: - Modernization of tax and customs administrations. - Rationalization of remaining tax exemptions, including those under new establishment conventions. - Enhanced audit and monitoring capacity. - Medium-term outlook caveats: highly uncertain due to fragile liquidity conditions, risks to reform implementation, and commodity price volatility. ### Public Financial Management (PFM) reforms - Urgent measures to avert fiscal deterioration: - Strictly adhere to budget appropriation ceilings. - Limit recourse to exceptional procedures and reinforce commitment controls. - Plan for contingency funds in annual budgets. - SIGFIP (Financial Management Information System) status: - Full implementation needed (budgetary and accounting modules finalization and integration). - Progress limited since early 2025; recruitment of international experts to relaunch the project is underway. - Cash management improvements: - Integrate arrears clearance into treasury planning. - Enhance procurement, commitment and cash-flow plans and their articulation. - Ensure budgets align with realistic revenue and cash-flow forecasts. - Fully leverage the treasury committee and complete rollout of the Treasury Single Account (TSA). - TSA formally established under BEAC–Congo agreement but operationalization constrained by technical delays. - Public investment management and SOE reforms: - Strengthened public investment management and the forthcoming investment law to improve investment efficiency. - Reform state-owned enterprises (SOEs) including adoption and implementation of the law on SOEs governance to mitigate fiscal risks. - Additional PFM support: Key reforms supported by UNCTAD and World Bank include modernizing the customs IT system Sydonia World; full application of reliable state accounting and a functional material accounting system encouraged. ### Debt management - Current classification: overall and external debt classified as “in distress” yet “sustainable” conditional on significant and sustained fiscal adjustment. - Arrears situation: - By July 2024 all legacy external arrears—except disputed and pre-HIPC claims—were resolved. - Temporary recurring external arrears accumulation persisted; preliminary data indicate new external arrears exceeded 1 percent of GDP starting in 2025 until February 2026. - Breach driven largely by newly recognized arrears to two private companies and newly accumulated arrears to official bilateral and multilateral creditors. - Continued accumulation of domestic arrears indicates domestic debt vulnerabilities and liquidity risks. - Debt management weaknesses: - Frequent recognition of contingent liabilities. - Recurrent accumulation of domestic and external arrears. - Weak institutional coordination and transparency gaps in debt statistics (coverage, timeliness, accuracy). - Debt management office (CCA) reorganization incomplete: internal procedures and debt management manual not fully operationalized. - Inter-institutional debt monitoring and fiscal risk assessment committees not yet fully operational. - Staff recommendations: - Urgently operationalize inter-institutional committees and finalize medium-term debt management strategy leveraging IMF and partners’ technical assistance. - Align amortization, arrears clearance, and issuance plans. - Publish quarterly debt bulletin (early 2026 bulletin expected to include SOE debt survey data). - Conduct external audits of SOEs and strengthen monitoring of fiscal risks from SOEs (Fund technical assistance requested). - Train CCA staff in debt operations and software (Système de Gestion et d’Analyse de la Dette). ### Financial sector risks and recommendations - Banking sector size and exposures: - Bank assets reached 48 percent of GDP at end-October 2025. - Exposures to CEMAC sovereigns rose from 25 to 30 percent of bank assets since end-2021. - Several Congolese banks report sovereign exposures exceeding 30 percent of assets. - Profitability and asset quality: - Returns on equity (assets) averaged 37 (3.1) percent in 2024 (end-2024 preliminary data); signs of rapid softening thereafter. - As of August 2025 banks largely adhered to prudential requirements; asset quality broadly adequate, though some banks breached maturity and individual exposure standards. - End-2023 NPLs: 15.2 percent of risk-weighted assets; provisioning at 65 percent. - Regional absorption limits: - Regional banks’ exposure to the Congolese sovereign already well beyond CFAF 2 trillion. - Capacity to absorb additional Congolese treasuries approaching limits; limits on exposures to single borrowers and pent-up demand from other CEMAC countries. - Staff recommendations to address financial stability risks: - Fiscal consolidation and proactive debt management to reduce reliance on regional treasury markets. - Enforce prudential standards, enhance financial stability monitoring, and improve crisis preparedness (including timely, high-frequency prudential reporting and stress tests). - Advocate for gradual removal of zero risk weights on regional sovereign exposures. - Diligently enforce prudential concentration limits for domestic and regional securities. - Promote financial system diversification and attract a non-bank investor base over the longer term. - Safeguards assessment: BEAC’s implementation of 2022–23 safeguards recommendations has been slow; efforts under way on governance; staff continues follow-up. ### Authorities’ views (selected) - Authorities broadly agreed with staff’s assessment and policy recommendations and reaffirmed commitment to prudent fiscal management. - Emphasized ambition of the National Development Plan 2022–26 and revenue potential from modernization of customs and tax administrations. - Noted performance contracts between Ministry of Finance and revenue administrations to set monitorable revenue targets. - Recognized uncertainty about yields from tax administration reforms and commitment to align budget execution with available resources, including supplementary budgets if needed. - Acknowledged delays in PFM reforms due to capacity and resource constraints; requested Fund-supported assessment mission on SIGFIP. - Working with partners and the Fund on treasury banking function to enable closure of public agencies’ accounts in commercial banks and centralization of funds at the treasury. - On debt management, authorities acknowledged vulnerabilities, committed to further strengthen CCA and coordination, and to clear outstanding external arrears prioritizing the oldest obligations. - On banking sector risks, authorities have intensified communication with primary dealers, targeted emissions at dealers with lower exposure, and tapped international market funding to preserve domestic bank sector stability. *Republic of Congo — International Monetary Fund* ### 25. More decisive progress toward strengthening transparency and accountability would ### 25. More decisive progress toward strengthening transparency and accountability would ### Transparency, governance, and anti-corruption reforms - Transparency gaps in natural resources management and inconsistent application of laws continue to hinder private investment. - Progress in 2024–25 action plan: - Adopted the statute for Court of Accounts (CCDB) magistrates. - Released the 2023 Extractive Industries Transparency Initiative (EITI) report. - A committee is preparing draft texts to operationalize the Transparency Code. - Outstanding actions and constraints: - Delays in publishing EITI compliant mining and forestry concession registers and beneficial ownership information, mainly due to financing constraints. - Publication of financial statements and production statistics for public enterprises and extractive projects, disaggregated by permit and site, remain outstanding. - Formalization of the planned coordination mechanism under the Prime Minister’s office is still pending despite improved data exchange through new information-sharing agreements among HALC, CCDB, CNTR, and ANIF. - Staff advice to the authorities: - Strengthen legal protection for civic space and whistleblowers. - Require cabinet members to submit conflict-of-interest disclosures. - Ensure timely publication of detailed reports by HALC and CNTR. - AML/CFT and beneficial ownership: - A commission was charged with developing the implementing regulation for a beneficial ownership register; completing this task will require financial support (as requested by SecFin Africa) and technical assistance. - Efforts to strengthen the capacity of ANIF are ongoing, including fostering engagement with designated non-financial businesses and professions to ensure compliance with regional regulations. ### Authorities’ views - The authorities remain committed to accelerating governance, transparency, and accountability reforms, viewing them as essential for fostering inclusive and sustainable growth. - They reaffirmed commitment to implementing the remaining actions under the governance action plan and indicated intention to seek additional Fund technical assistance as needed. ### Capacity to Repay (CtR) — baseline assessment and projections - CtR is assessed as adequate under the baseline scenario but subject to significant risks (Table 10). - Outstanding Fund credit developments: - After increasing more than tenfold since 2021, it reached a maximum of 3 percent of GDP in 2025 (SDR 349.9 million, 216 percent of quota), and is projected to gradually decline through 2034. - Its share in external debt remains below 10 percent. - Debt service to the Fund at peak is expected to reach: - 0.4 percent of GDP, - 1.9 percent of tax revenue, - 1.3 percent of exports of goods and services. - Projected share of Fund debt service in total external debt service is expected to increase to 14 percent in 2031 before declining again. - Risks that have worsened relative to the last staff report (CR 25/75): - Weaker CtR indicators, greater uncertainty about medium-term capacity to repay, particularly regarding external liquidity and rising total external debt service. - Possibility of further fiscal slippages, only partial repatriation of export revenues, and continuing delays in completing regional assurances. - Proposed mitigating measures (if duly implemented) include: - Fiscal consolidation planned in the 2026 budget (¶12). - Continued mobilization of revenues through rationalization of tax exemptions and ongoing reforms of the tax and customs administrations (¶12). - Sustained PFM reforms (¶13). - Further progress in strengthening debt management (¶17). - Enhanced prudential financial sector regulation (¶21). - Governance improvements (¶24). ### Downside/adverse scenario - Staff’s downside scenario shocks: - A 10 percent oil price decline from 2026 onwards—a one standard deviation of the Brent oil price during 2023–25. - Bank lending capacity restricted to the existing 25 percent of assets exposure limit to the Congolese sovereign over 2025–26, before gradually fading out afterwards. - The scenario assumes no policy response. - Resulting additional financing needs: - Sizeable: 3.8 and 1.9 percent of GDP over 2026–27 (Text Figure 2). - Lower fiscal revenues worsen the primary balance by 0.8 percent of GDP in 2026, before gradually improving over the medium term. - Macroeconomic impacts: - Shocks dampen growth over 2026–30. - Central bank net foreign assets projected for end-2026 would decline by 47 percent, reducing Congo’s contribution to regional reserves in the near term; the decline narrows to 15 percent by end-2030. - Additional financing needs could constrain mobilization of local currency resources for foreign exchange purchases to meet external debt obligations. - Delays in renewing regional policy assurances could intensify related risks. - Scenario caveats: - The scenario does not account for any compensating policy responses. - Risks for further fiscal slippages exceeding those regarded as additional risk factors in the baseline could push additional financing needs even higher. ### Downside scenario impact on capacity to repay - Under the downside scenario CtR would weaken but remain adequate (Text Figure 3, Table 11): - Outstanding Fund credit in 2026 would stand at 12.5 percent of tax revenue and 7.7 percent of exports of goods and services—compared with 11.9 percent and 7 percent, respectively, in the baseline. - Fund credit would continue to account for less than 10 percent of external debt. - Debt service to the Fund ratios would rise marginally: during 2028–33 they would increase by about 0.1 percentage point on average for exports and tax revenue, and by 0.5 pp for imputed gross reserves. - Persistent vulnerabilities: - Recent deterioration in debt management and accumulation of arrears (¶16–17) represent a significant vulnerability to repayment capacity. - Staff recommendations to authorities: - Vigilant monitoring and engagement on debt management. - Follow up on commitment to fiscal consolidation and efforts to strengthen debt management. - Authorities’ track record of repaying the Fund is an additional mitigating factor. ### Staff appraisal and policy priorities - 2025 developments and outlook: - Fiscal slippages and mounting liquidity pressures in 2025 have intensified debt vulnerabilities and weakened growth prospects. - Overspending resulted in a setback to fiscal consolidation, slowing debt reduction and heightening financing challenges within a more challenging sovereign-bank nexus. - Softer-than-expected non-hydrocarbon growth and under-executed public capital spending have reduced medium-term growth prospects. - Volatility in oil prices, technical challenges with some oil fields, and lingering issues with electricity provisioning imply additional downside risks. - Overall CtR view: - Congo’s capacity to repay the Fund is adequate, though subject to significant downside risks. - Total external debt service is projected to remain contained at its 2026 maximum of 4 percent of GDP, with debt service to the Fund representing at its peak less than a sixth of this (¶26, Table 10). - Tight regional markets and large rollover needs mean risks to capacity to repay remain significant; sizeable funding gaps could challenge repayment if regional banks’ willingness to absorb Congolese treasuries dries up and oil prices decline considerably. - Policy imperatives: - Sustaining fiscal discipline and controlling expenditure are paramount after 2025 fiscal slippages. - Implement revenue reforms foreseen in the 2026 budget law (¶9, 12) reinforced by spending rationalization to anchor a return to growth-friendly fiscal prudence. - Prioritize higher revenue and high-quality capital and essential social spending to ease liquidity tensions, preserve debt sustainability, and foster inclusive growth. - Accelerate fiscal structural reforms to enhance tax administration and public financial management efficiency. - Improve debt management and macroprudential alertness: - Fully implement steps related to the late CCA reorganization (¶17). - Revise Congo’s medium-term debt management strategy to ensure realistic arrear clearance, debt service, and emission plans (¶18). - Proactive coordination with primary dealers and intensified prudential monitoring, with robust application of effective prudential standards (¶22). - Prioritize progress on governance and transparency to improve business conditions and encourage private sector dynamism: - Improve PFM (¶13). - Increase transparency on extractive industries and SOEs (¶17, 24). - Adequately resource anti-money laundering policies. - Strengthen legal protection of the civic space (¶24). ### Key numerical indicators and projections (selected, exact figures preserved) - Fund credit peak and composition: - Maximum of 3 percent of GDP in 2025 (SDR 349.9 million, 216 percent of quota). - Projected Fund debt service peak: - 0.4 percent of GDP; 1.9 percent of tax revenue; 1.3 percent of exports of goods and services. - Downside scenario shocks: - 10 percent oil price decline from 2026 onwards. - Bank exposure limit: 25 percent of assets to the Congolese sovereign over 2025–26. - Additional financing needs in downside scenario: - 3.8 and 1.9 percent of GDP over 2026–27. - Primary balance impact: - Worsens by 0.8 percent of GDP in 2026 under the downside scenario. - Central bank net foreign assets: - Projected decline by 47 percent at end-2026; decline narrows to 15 percent by end-2030. - Republic of Congo Table 1 highlights (selected rows, exact values): - GDP at constant prices: 2.1 3.7 2.4 2.8 3.3 3.7 3.7 3.6 3.6 (2024–31 entries). - Consumer prices (period average): 3.1 3.3 2.6 2.8 3.0 3.0 3.0 3.0 3.0. - Current account balance (percent of GDP): -3.0 0.3 -5.8 -7.1 -6.0 -5.9 -5.5 -5.1 -4.3. - External public debt (percent of GDP): 37.5 31.9 38.4 34.4 31.8 28.7 25.9 23.6 21.4. - Total revenue: 32.4 32.7 29.7 29.7 29.7 29.3 28.8 28.3 27.8. - Hydrocarbon revenue (percent of total government revenue): 17.4 16.7 13.5 12.8 12.8 12.3 11.6 10.9 10.2. - Overall balance (deficit -, payment order basis, percent of GDP): 3.6 3.7 0.3 -0.1 2.9 3.9 4.5 4.7 4.7. - Total public debt (percent of GDP): 98.0 90.4 97.2 93.0 86.9 80.0 73.0 66.7 61.0. - External public debt service: 23.9 15.9 14.2 16.5 13.9 16.5 15.2 14.0 13.4. - Table 2a (selected entries, CFAF billions): - Total Revenue and Grants (2024–31 series sample): 2,263 2,460 2,197 2,359 2,455 2,340 2,511 2,660 2,809 2,970 3,131. - Hydrocarbon revenue (sample): 1,214 1,258 995 1,055 1,044 1,011 1,080 1,114 1,133 1,144 1,153. - Non-hydrocarbon revenue (sample): 1,010 1,129 1,167 1,226 1,331 1,271 1,346 1,454 1,577 1,718 1,865. - Total expenditure (sample): 1,939 2,108 2,167 2,188 2,224 2,346 2,222 2,243 2,293 2,392 2,525. *IMF staff report excerpt (Republic of Congo).* ### Annex budgets and special accounts ### Annex budgets and special accounts ### Fiscal aggregates and central government operations (levels and percent of non-hydrocarbon GDP) - Total Revenue and Grants (percent of non-hydrocarbon GDP): 32.4, 32.7, 29.7, 31.1, 29.7, 29.7, 29.3, 28.8, 28.3, 27.8 - Revenue (percent of non-hydrocarbon GDP): 31.8, 31.7, 29.3, 30.1, 28.9, 28.7, 28.3, 27.7, 27.3, 26.8 - Hydrocarbon revenue (percent of non-hydrocarbon GDP): 17.4, 16.7, 13.5, 13.2, 12.8, 12.8, 12.3, 11.6, 10.9, 10.2 - of which: oil transfers: 1.2, 0.6, 1.1, 0.6, 0.5, 0.5, 0.5, 0.4, 0.4, 0.4 - Non-hydrocarbon revenue (percent of non-hydrocarbon GDP): 14.5, 15.0, 15.8, 16.9, 16.1, 15.9, 16.0, 16.1, 16.4, 16.5 ### Expenditure composition (percent of non-hydrocarbon GDP) - Total Expenditure: 27.8, 28.0, 29.3, 28.2, 29.7, 26.3, 24.7, 23.5, 22.8, 22.4 - Current expenditure: 24.0, 22.4, 25.7, 21.1, 23.5, 20.1, 18.4, 17.4, 16.8, 16.5 - Wages: 5.8, 5.7, 5.7, 5.5, 5.6, 5.6, 5.4, 5.2, 5.0, 5.1 - Other primary current expenditure: 12.2, 11.7, 15.2, 12.0, 12.2, 10.1, 9.1, 8.8, 8.7, 8.8 - Goods and services: 2.9, 2.8, 7.6, 3.0, 4.1, 3.5, 2.7, 2.6, 2.7, 2.6 - Transfers: 8.2, 7.8, 6.3, 7.9, 7.2, 5.8, 5.5, 5.4, 5.3, 5.5 - Social Transfers (Lisungi, COVID-19 and others): 3.1, 3.1, 3.1, 4.2, 3.6, 3.6, 3.6, 3.4, 3.4, 3.6 - Oil-related transfers: 1.2, 0.6, 1.1, 0.6, 0.5, 0.5, 0.5, 0.4, 0.4, 0.4 - Other transfers: 3.9, 4.1, 2.1, 3.1, 3.0, 1.7, 1.6, 1.5, 1.5, 1.4 - Common charges: 1.1, 1.1, 1.3, 1.0, 0.9, 0.9, 0.8, 0.8, 0.8, 0.7 - Interest (percent of non-hydrocarbon GDP): 6.0, 4.4, 4.4, 2.4, 4.9, 4.2, 3.7, 3.3, 2.9, 2.5 - Domestic interest: 4.1, 3.7, 3.7, 1.5, 3.5, 3.1, 2.8, 2.5, 2.3, 1.9 - External interest: 1.9, 0.7, 0.7, 1.0, 1.4, 1.1, 1.0, 0.8, 0.7, 0.6 - Capital expenditure (percent of non-hydrocarbon GDP): 3.8, 5.5, 3.6, 7.1, 6.2, 6.2, 6.3, 6.1, 6.0, 5.9 - Domestically financed capital expenditure: 2.2, 2.9, 1.6, 3.9, 3.1, 3.1, 2.9, 2.7, 2.7, 2.6 - Externally financed capital expenditure: 1.6, 2.7, 2.0, 3.2, 3.1, 3.1, 3.5, 3.3, 3.3, 3.3 ### Balances - Non-hydrocarbon primary balance (percent of non-hydrocarbon GDP): -6.7, -7.6, -8.7, -7.9, -7.9, -5.1, -3.9, -3.1, -2.4, -2.3 - Basic non-hydrocarbon primary balance (percent of non-hydrocarbon GDP): -5.7, -5.9, -7.1, -5.7, -5.6, -3.0, -1.5, -0.7, -0.2, 0.0 - ― excluding oil-related transfers: -4.5, -5.3, -6.0, -5.1, -5.1, -2.5, -1.0, -0.3, 0.2, 0.3 - Primary balance (percent of non-hydrocarbon GDP): 10.6, 9.1, 4.8, 5.4, 4.9, 7.7, 8.3, 8.5, 8.4, 7.9 - Overall balance, payment order basis (percent of non-hydrocarbon GDP) - Excluding grants: 4.1, 3.7, -0.1, 1.9, -0.8, 2.4, 3.6, 4.3, 4.5, 4.4 - Including grants: 4.6, 4.7, 0.4, 2.9, -0.1, 3.4, 4.6, 5.3, 5.3, 5.4 - Overall balance, cash basis (percent of non-hydrocarbon GDP): 4.6, 4.7, 0.4, 2.9, -0.1, 3.4, 4.6, 5.3, 5.3, 5.4 ### Financing (percent of non-hydrocarbon GDP and levels) - Financing (overall, percent of non-hydrocarbon GDP): -5.9, -5.7, -1.4, -2.9, 0.1, -3.4, -4.6, -5.3, -5.5, -5.4 - Foreign (net, excluding budgetary support, percent of non-hydrocarbon GDP): -6.1, -4.7, 2.5, 1.5, -2.6, -2.3, -2.7, -2.5, -2.2, -1.6 - Drawings (percent of non-hydrocarbon GDP): 3.0, 1.7, 7.9, 5.2, 2.3, 2.1, 2.4, 2.3, 2.3, 2.3 - Amortization (paid, percent of non-hydrocarbon GDP): -7.1, -4.3, -3.5, -3.7, -3.3, -2.8, -3.7, -3.4, -3.1, -3.0 - Others (percent of non-hydrocarbon GDP): -2.0, -2.1, -1.9, 0.0, -1.6, -1.5, -1.5, -1.4, -1.3, -0.9 - Domestic (net, excluding IMF-ECF, percent of non-hydrocarbon GDP): 0.2, -1.0, -3.9, -4.4, 2.7, -1.1, -1.9, -2.8, -3.3, -3.7 - Banking system (net, percent of non-hydrocarbon GDP): 0.6, -0.1, -4.4, -1.6, 5.8, 2.9, 0.9, 1.5, -0.1, -1.6 - Central bank: 0.0, -2.8, -1.6, -0.2, 0.3, -1.3, -1.7, -1.9, -2.3, -2.9 - Commercial banks: 0.6, 2.7, -2.7, -1.4, 5.5, 4.2, 2.6, 3.3, 2.2, 1.3 - Nonbank financing: -0.4, -0.9, 0.4, -2.8, -3.1, -4.0, -2.8, -4.3, -3.3, -2.2 - Of which: Repayment of domestic arrears (percent of non-hydrocarbon GDP): -1.3, -2.1, -2.1, -3.7, -1.9, -2.7, -2.0, -3.7, -2.2, -1.9 ### Financing gap and IMF support (levels) - Financing gap (- = surplus) 86,767,200,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000 - Expected financing (excluding IMF) 60,494,700,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000 - IMF-ECF 26,262,500,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000 - Residual financing gap 0,0,0,0,0,0,0,0,0,0 ### Memorandum items (levels and percent of non-hydrocarbon GDP) - Stock of domestic arrears (levels): 1,761, 1,409, 1,690, 1,548, -1,549, 1,317, 1,044, 733, 448, 239 - Stock of domestic arrears (percent of non-hydrocarbon GDP): 25.2, 18.7, 22.9, -19.6, 15.6, 11.5, 7.5, 4.3, 2.1 - Of which: Social arrears (levels): 554, 441, 485, ... - Of which: Social arrears (percent of non-hydrocarbon GDP): 7.9, 5.9, 6.6, - - Stock of government deposits (levels): 129, 503, 236, 453, -198, 294, 433, 599, 823, 1,129 - Stock of government deposits (percent of non-hydrocarbon GDP): 1.8, 6.7, 3.2, -2.5, 3.5, 4.8, 6.1, 7.8, 10.0 - CEMAC Reference fiscal balance (percent of non-hydrocarbon GDP): 3.9, 4.0, 3.2, --, 0.9, 0.8, 1.4, 2.4, 3.1, 3.2 ### GDP and sectoral GDP (levels) - GDP at current market prices (CFAF billion): 8,956, 9,470, 9,063, 9,512, 9,415, 9,415, 10,007, 10,700, 11,437, 12,202, 13,015 - Non-hydrocarbon GDP at market prices (CFAF billion): 6,988, 7,533, 7,391, 7,887, 7,887, 7,887, 8,447, 9,084, 9,769, 10,494, 11,272 Sources: Congolese authorities; and IMF staff estimates and projections. ### Annex budgets and special accounts ### Annex budgets and special accounts ### Fiscal aggregates and budget composition (selected series) - Interest by year (percent of GDP or percent units as listed): 4.7 3.5 3.6 2.1 4.1 3.6 3.2 2.8 2.5 2.2 - Domestic interest: 3.2 2.9 3.0 1.2 2.9 2.6 2.4 2.1 1.9 1.7 - External interest: 1.5 0.5 0.5 0.8 1.2 1.0 0.8 0.7 0.6 0.5 - Capital expenditure (percent or units): 3.0 4.4 2.9 5.9 5.2 5.2 5.4 5.2 5.1 5.1 - Domestically financed: 1.7 2.3 1.3 3.3 2.6 2.6 2.4 2.3 2.3 2.2 - Externally financed: 1.2 2.1 1.6 2.7 2.6 2.6 2.9 2.8 2.8 2.9 - Non-hydrocarbon primary balance: -5.3 -6.1 -7.1 -6.6 -6.7 -4.3 -3.3 -2.6 -2.1 -2.0 - Basic non-hydrocarbon primary balance: -4.5 -4.7 -5.8 -4.8 -4.7 -2.5 -1.3 -0.6 -0.2 0.0 - ― excluding oil-related transfers: -3.5 -4.2 -4.9 -4.3 -4.2 -2.1 -0.9 -0.3 0.2 0.3 - Primary balance: 8.3 7.2 3.9 4.5 4.1 6.5 7.1 7.3 7.3 6.8 - Overall balance, payment order basis: - Excluding grants: 3.2 2.9 0.0 1.6 -0.7 2.0 3.0 3.6 3.8 3.8 - Including grants: 3.6 3.7 0.3 2.4 -0.1 2.9 3.9 4.5 4.7 4.7 - Overall balance, cash basis: 3.6 3.7 0.3 2.4 -0.1 2.9 3.9 4.5 4.7 4.7 ### Fiscal financing and financing gap - Financing (overall): -4.6 -4.5 -1.1 -2.4 0.1 -2.9 -3.9 -4.5 -4.7 -4.7 - Foreign (net, excluding budgetary support): -4.7 -3.7 2.1 1.2 -2.2 -1.9 -2.3 -2.1 -1.9 -1.4 - Drawings: 2.4 1.4 6.5 4.4 2.0 1.8 2.1 2.0 2.0 2.0 - Amortization (paid): -5.5 -3.5 -2.9 -3.1 -2.8 -2.4 -3.1 -2.9 -2.7 -2.6 - Others: -1.6 -1.6 -1.6 0.0 -1.4 -1.3 -1.2 -1.2 -1.1 -0.8 - Domestic (net, excluding IMF-ECF): 0.2 -0.8 -3.2 -3.7 2.3 -1.0 -1.6 -2.4 -2.9 -3.2 - Banking system (net): 0.5 0.0 -3.6 -1.3 4.8 2.4 0.8 1.3 0.0 -1.3 - Central bank: 0.0 -2.2 -1.3 -0.2 0.2 -1.1 -1.4 -1.6 -2.0 -2.5 - Commercial banks: 0.4 2.2 -2.2 -1.2 4.6 3.5 2.2 2.9 1.9 1.1 - Nonbank financing: -0.3 -0.7 0.4 -2.4 -2.6 -3.4 -2.4 -3.7 -2.8 -1.9 - Of which: Repayment of domestic arrears: -1.0 -1.6 -1.7 -3.1 -1.6 -2.3 -1.7 -3.1 -1.9 -1.6 - Financing gap (- = surplus): 1.0 0.8 0.8 0.0 0.0 0.0 0.0 0.0 0.0 0.0 - Expected financing (excluding IMF): 0.7 0.5 0.5 0.0 0.0 0.0 0.0 0.0 0.0 0.0 - IMF-ECF: 0.3 0.3 0.3 0.0 0.0 0.0 0.0 0.0 0.0 0.0 - Residual financing gap: 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 ### Memorandum fiscal items - Stock of domestic arrears: 19.7 14.9 18.6 -16.5 13.2 9.8 6.4 3.7 1.8 - Of which: Social arrears: 6.2 4.7 5.3 - - Stock of government deposits: 1.4 5.3 2.6 -2.1 2.9 4.0 5.2 6.7 8.7 - CEMAC Reference fiscal balance: 3.0 3.2 2.6 -- -0.8 0.7 1.2 2.1 2.6 2.7 - GDP at current market prices (CFAF billions): 8,956 9,470 9,063 9,415 9,415 10,007 10,700 11,437 12,202 13,015 - Non-hydrocarbon GDP at market prices (CFAF billions): 6,988 7,533 7,391 7,887 7,887 8,447 9,084 9,769 10,494 11,272 *Sources: Congolese authorities; and IMF staff estimates and projections.* ### Medium-Term Balance of Payments highlights (Table 3, selected items; Billions of CFA francs) - Current account: -270 27 -522 -665 -596 -636 -625 -625 -559 (2024–2031 series as listed) - Of which non-hydrocarbon: -1,947 -1,162 -1,735 -1,733 -1,783 -1,847 -1,916 -1,975 -2,031 - Trade balance: 2,112 2,543 1,676 1,390 1,429 1,381 1,372 1,362 1,341 - Exports, f.o.b.: 4,718 4,622 4,031 3,631 3,724 3,829 3,914 3,992 4,072 - Hydrocarbon sector exports: 4,430 4,197 3,724 3,296 3,358 3,419 3,477 3,509 3,539 - Non-hydrocarbon sector exports: 288 425 307 335 365 410 438 483 533 - Imports, f.o.b.: -2,606 -2,080 -2,355 -2,242 -2,294 -2,448 -2,543 -2,629 -2,731 - Hydrocarbon sector imports: -860 -970 -800 -686 -684 -762 -794 -809 -836 - Government imports: -332 -444 -358 -329 -337 -362 -372 -393 -415 - Non-hydrocarbon private sector imports: -1,414 -665 -1,197 -1,227 -1,273 -1,324 -1,377 -1,428 -1,479 - Balance of services: -1,479 -1,741 -1,464 -1,391 -1,387 -1,334 -1,290 -1,286 -1,163 - Hydrocarbon sector services: -1,030 -1,266 -1,010 -919 -886 -798 -717 -680 -522 - Non-hydrocarbon sector services: -449 -475 -454 -472 -502 -536 -573 -606 -641 - Income: -938 -858 -772 -725 -727 -779 -811 -815 -856 - Labor income: -13 -12 -10 -8 -8 -9 -9 -9 -9 - Investment income: -925 -847 -762 -718 -719 -771 -802 -806 -846 - Current transfers (net): 358 438 628 897 105 114 119 - Capital account: 407 334 588 492 99 108 113 - Official grants: 407 334 588 492 99 108 113 - Financial account: 172 -835 345 885 495 816 366 886 35 - Direct investment (net): 442 496 461 580 565 576 627 662 509 - Portfolio investment: 149 142 61 42 44 168 176 182 175 - Other investment: -419 -721 -542 -234 -183 -170 -173 -149 -49 - Medium and long term: -338 -277 -223 -146 -106 -145 -140 -135 -88 - Public sector: -446 -354 -285 -207 -192 -247 -242 -228 -184 - Drawings: 691 291 151 85 178 222 262 382 58 - Amortization: -428 -327 -259 -263 -240 -336 -332 -328 -337 - Net change in arrears: 530 0 0 0 0 0 0 0 0 - Others: -140 -156 -141 -128 -130 -132 -135 -138 -105 - Overall balance of payments: -581 746 -183 737 111 172 189 - Financing: - Reserve financing (- = increase): -28 -87 -112 23 -22 13 -26 -79 -89 - Exceptional financing: 0 -6 -5 -5 -15 -50 -85 -93 0 - Financing gap (- = surplus): 86 67 2 0 0 0 0 0 0 - Expected financing (excluding IMF): 60 49 47 0 0 0 0 0 0 - IMF-ECF: 26 26 25 0 0 0 0 0 0 - Residual financing gap: 0 0 0 0 0 0 0 0 0 *Sources: Bank of Central African States (BEAC) and IMF staff estimates and projections.* ### Monetary Survey (Table 4, selected items; Billions of CFA francs) - Net foreign assets (total): 403 401 343 301 317 531 531 565 659 781 944 1,201 1,485 (quarterly/annual sequence) - Central bank: 52 147 -85 -67 -144 144 144 126 163 200 311 483 673 - Deposit money banks: 351 254 429 368 462 386 386 439 496 580 633 717 812 - Net domestic assets: 2,792 3,146 2,943 2,981 2,867 2,541 2,541 3,054 3,364 3,493 3,664 3,697 3,566 - Net domestic credit: 3,252 3,496 3,319 3,383 3,359 3,001 3,001 3,515 3,824 3,953 4,124 4,158 4,026 - Net credit to the public sector: 1,724 1,883 1,736 1,682 1,601 1,422 1,422 1,872 2,099 2,130 2,189 2,091 1,815 - Net credit to the Government: 1,725 1,929 1,734 1,676 1,587 1,423 1,423 1,873 2,101 2,132 2,190 2,092 1,816 - Central bank claims and deposits series (selected): Claims 1,038 1,094 1,052 1,007 1,006 1,044 1,044 1,024 994 928 828 719 602; Use of IMF Credit 267 280 285 272 268 287 287 282 267 217 132 39 -61; Deposits -129 -503 -112 -141 -103 -236 -236 -198 -294 -433 -599 -823 -1,129 - Deposit money banks claims: 816 1,338 793 811 684 615 615 1,047 1,401 1,636 1,962 2,196 2,343 - Credit to the economy: 1,528 1,613 1,583 1,702 1,757 1,579 1,579 1,643 1,725 1,823 1,935 2,067 2,211 - Credit to the private sector: 1,296 1,337 1,320 1,372 1,423 1,333 1,333 1,380 1,444 1,520 1,610 1,717 1,836 - Other items, net: -460 -350 -376 -402 -491 -460 -460 -460 -460 -460 -460 -460 -460 - Broad money (M2): 3,195 3,547 3,287 3,282 3,184 3,072 3,072 3,620 4,023 4,273 4,608 4,898 5,050 - Currency outside banks: 544 582 520 516 526 523 523 616 685 727 784 833 859 - Demand deposits: 1,828 2,031 1,802 1,821 1,675 1,756 1,756 2,075 2,311 2,456 2,651 2,820 2,909 - Time deposits: 791 910 908 917 965 760 760 896 996 1,058 1,140 1,212 1,250 - Growth/changes (selected): - Broad money growth (percent): 16.5 5.8 2.9 2.7 -0.3 -3.9 -3.9 17.8 11.2 6.2 7.8 6.3 3.1 - Net foreign assets (percent change): 7.0 3.3 -1.9 -3.2 -2.7 4.0 4.0 1.1 2.6 3.0 3.8 5.6 5.8 - Net domestic assets (percent change): 9.5 2.5 4.7 5.9 2.4 -7.9 -7.9 16.7 8.6 3.2 4.0 0.7 -2.7 - Credit to the economy (percent change): 2.4 4.4 2.5 13.2 20.0 3.3 3.3 3.4 5.0 5.7 6.2 6.8 7.0 - Credit to the private sector (percent change): 3.6 3.8 -3.5 5.2 14.0 2.9 2.9 3.5 4.6 5.3 5.9 6.7 6.9 - Velocity (Non-hydrocarbon GDP/average M2): 2.4 2.1 2.4 2.2 2.1 2.1 2.4 2.2 2.1 2.1 2.1 2.1 2.2 - Total nominal GDP growth (percent): 4.2 4.9 1.2 3.9 6.3 6.9 1.2 3.9 6.3 6.9 6.9 6.7 6.7 - Memorandum item: Gross imputed official reserves (CFA billion): 560 663 402 401 331 672 672 649 671 658 684 764 853 - In months of imports: 1.7 2.0 2.1 2.0 2.0 2.0 2.1 2.0 2.0 2.0 2.0 2.2 2.4 *Sources: BEAC; and IMF staff estimates and projections.* ### Financial Soundness Indicators for the Banking Sector (Table 5, selected indicators, percent) - Regulatory capital to risk-weighted assets: 19.5 19.1 22.8 24.9 29.6 18.8 21.8 23.1 17.4 - Nonperforming loans net of provisions to capital: 15.4 28.3 53.1 71.8 74.6 11.1 30.2 27.9 26.4 - Nonperforming loans to total gross loans: 5.0 8.0 16.2 22.5 27.5 21.0 16.9 16.8 15.2 - Provisions to nonperforming loans: 51.9 38.6 35.8 36.7 35.9 53.0 64.2 62.4 65.5 - Return on assets: 2.1 1.6 1.5 1.2 0.6 1.1 2.2 4.3 3.1 - Return on equity: 16.2 8.0 7.2 4.6 1.2 6.3 12.0 13.0 19.4 - Liquid assets to total assets: 21.1 16.7 22.7 26.8 23.8 26.9 27.2 30.9 32.1 - Liquid assets to short-term liabilities: 116.1 104.4 146.6 176.6 176.0 152.0 174.4 175.9 173.6 - Large exposures to capital: 187.2 154.2 157.5 157.2 133.6 126.0 104.7 107.8 97.1 - Customer deposits to total (noninterbank) loans: 125.5 102.8 93.6 91.5 104.3 112.1 111.2 133.1 144.6 - FX loans to total loans: 2.4 2.2 5.0 3.0 0.7 0.1 0.1 0.1 0.0 *Source: IMF Financial Soundness Indicators.* ### Gross Fiscal Financing Needs (Table 6; Billions of CFA francs) - A. Overall fiscal balance (cash basis) [-=surplus]: -324 -306 -289 -417 -516 -578 -606 (2024–2031 series as listed) - B. Financing needs (annual): 200 227 531 736 204 421 912 416 264 726 85 - Amortization (including arrears): 189 0 248 51 626 179 919 1900 2094 2265 2252 - External amortization: 53 22 59 263 240 336 332 328 337 - Of which: Amortization due: 58 42 59 263 240 336 332 328 337 - Domestic amortization due: 126 92 072 1213 1326 1362 1382 1404 1673 1706 (as listed) - Repayment of domestic arrears: 88 155 150 232 182 357 264 209 - BEAC: -46 121 -23 1 11 15 41 82 24 403 23 (as listed) - Change in government deposits (+ = an increase): -46 107 -38 9 61 39 16 72 23 30 6 - Commercial banks change in government deposits: -84 5 5 5 5 5 5 - Other external financing: 140 141 128 130 132 135 138 105 - Errors and omissions: 102 0 0 0 0 0 0 0 0 0 - C = A + B Total financing needs: 167 827 231 742 1756 1774 1900 2069 2079 (as listed) - D. Identified sources of financing: 159 226 511 742 1756 1774 1900 2069 2079 - External identified: 247 587 185 178 222 226 238 258 - Of which: Project financing: 72 115 185 178 222 262 382 58 - Domestic identified: 134 520 641 558 1578 1552 1675 1831 1821 - Commercial bank and non-bank financing included: 138 819 801 549 1577 1552 1698 1874 1821 - E = C - D Financing gap (-=overfinancing): 86 7 200 0 0 0 0 0 0 - F. Exceptional external financing (excl. IMF): 60 ... 470 0 0 0 0 (multilateral 48; bilateral 11 where listed) - G = E - F Residual financing needs: 262 500 0 0 0 0 - IMF-ECF: 262 500 000 0 0 0 0 *Sources: Congolese authorities; and IMF staff estimates and projections.* ### Public Debt by Creditor (Table 7; year-end, Millions of USD and percent of total debt / percent GDP where listed) - Total debt (USD millions): 14,026 (100.0 percent) - External debt (USD millions / percent total debt): 5,362 (38.2 percent / 37.5 percent) with memo entries for 2024–2026 USD million and percent GDP series listed. - Multilateral creditors (USD millions): 1,724 (12.3 percent) - IMF: 374 (2.7 percent) - World Bank: 734 (5.2 percent) - ADB/AfDB/IADB: 495 (3.5 percent) - Other multilaterals: 121 (0.9 percent) - o/w: BDEAC: 83 (0.6 percent) - IFAD: 2 (0.2 percent) - Bilateral creditors: 2,442 (17.4 percent) - Paris Club: 462 (3.3 percent) - o/w France: 274 (2.0 percent) - Non-Paris Club: 1,980 (14.1 percent) - o/w China: 1,593 (11.4 percent) - India: 770 (0.5 percent) (as listed) - Commercial creditors: 1,196 (8.5 percent) - o/w Bonds: 179 (1.3 percent) - Other international creditors: 1,017 (7.3 percent) - Domestic debt: 866 (6.2 percent) - T-Bills and Bonds: 426 (3.0 percent) - Loans: 149 410.7 10.4 (entries listed) - Memo: Nominal GDP: 14,774 (USD million or local-currency memo as listed) - Contingent liabilities and collateralized debt (selected): Other explicit contingent liabilities: 257 ... 1.8 (as listed) (Note: Table 7 presents detailed creditor breakdowns and percent-of-GDP indicators across 2024–2026 series.) ### External arrears (Tables 8 and 9; selected snapshots) - Total external arrears (various end-of-period stocks): - December 2022 stock: 312.4 CFAF billion / 504.3 USD million / 3.6 percent of GDP - December 2023 stock: 297.8 CFAF billion / 495.1 USD million / 3.5 percent of GDP - December 2024 stock: 355.3 CFAF billion / 567.6 USD million / 4.0 percent of GDP - September 2025 stock: 449.5 CFAF billion / 773.2 USD million / 5.0 percent of GDP - September 2025 (Excl. unrestructured pre-HIPC arrears): 167.9 CFAF billion / 288.8 USD million / 1.9 percent of GDP - Composition highlights (December 2024 and September 2025 where available): - Bilateral arrears series (CFAF billion / USD million / percent of GDP): e.g., 86.7 / 140.0 / 1.0 (Dec 2022), 72.2 / 120.0 / 0.8 (Dec 2023), 110.4 / 176.4 / 1.2 (Dec 2024), 127.2 / 218.8 / 1.4 (Sep 2025), 62.4 / 107.3 / 0.7 (Sep 2025 excl. pre-HIPC) - Private creditors and suppliers form a large share (e.g., Suppliers: 225.7 / 364.3 / 2.6 (Dec 2022); 312.6 / 537.8 / 3.4 (Dec 2024); 95.8 / 164.8 / 1.1 (Sep 2025 excl. pre-HIPC)) - External arrears to official creditors (March 2025–February 2026, Billions of CFAF): - Total: 60.0 - Multilateral: 21.8 - World Bank: 4.6 - AfDB: 3.1 - BDEAC: 12.4 - IFAD: 0.9 - Bilateral: 38.2 - EXIMBANK India: 9.9 - France: 2.2 - Brazil: 5.0 - Belgium: 12.5 - Libya: 1.3 - Turkey: 6.1 *Source: Congolese authorities and IMF staff estimates.* ### Indicators of Capacity to Repay the IMF — Baseline and Downside Scenarios (Tables 10–11; Millions of SDRs and CFAF billions, selected series) - IMF obligations based on existing credit — Baseline scenario (SDR millions): - Charges and interest (annual): 9.0 6.9 6.1 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 - Principal (annual): 0.0 6.5 6.5 19.4 38.9 58.3 61.6 64.8 51.8 32.4 13.0 3.2 0.0 0.0 0.0 - SDR millions total series: 9.0 13.4 12.5 25.5 44.9 64.4 67.7 70.8 57.9 38.4 19.0 9.3 6.0 6.0 6.0 - CFAF billions equivalent series (selected): 7.3 10.5 9.7 19.8 35.0 50.2 53.0 55.4 45.3 30.1 14.9 7.3 4.7 4.7 4.7 - Percent of exports of goods and services (selected): 0.2 0.3 0.3 0.5 0.9 1.2 1.3 1.3 1.0 0.7 0.3 0.2 0.1 0.1 0.1 - Percent of quota (selected): 5.6 8.3 7.7 15.7 27.7 39.7 41.7 43.7 35.7 23.7 11.7 4.5 2.9 2.9 2.9 - Baseline memorandum items (selected): - Exports of goods and services (CFAF billions): 4,853 4,167 3,771 3,869 3,981 4,074 4,163 4,257 4,370 4,456 4,550 4,548 4,458 4,331 4,238 - External Debt service (CFAF billions): 627 307 376 327 418 407 394 395 393 257 230 247 260 282 294 - External Debt (CFAF billions): 3,357 3,476 3,240 3,193 2,979 2,770 2,583 2,399 2,231 2,394 2,599 2,794 2,951 3,091 3,217 - Nominal GDP (CFAF billions): 8,956 9,063 9,415 10,007 10,700 11,437 12,202 13,015 13,886 14,815 15,866 16,945 18,061 19,246 20,546 - Tax revenue (CFAF billions): 2,160 2,082 2,222 2,363 2,508 2,646 2,795 2,965 3,156 3,342 3,556 3,789 3,980 4,174 4,399 - Imputed gross official reserves (CFAF billions, selected): 560 672 649 681 672 702 787 885 1,016 1,361 1,246 136 114 711 602 1749 (table lists multi-year series) - Downside scenario: parallel series of principal, charges, SDR millions, CFAF billions and percent metrics are presented and mirror the baseline structure with scenario-specific numeric projections as listed in Table 11. *Sources: IMF staff estimates and projections.* *Sources: Congolese authorities; and IMF staff estimates and projections.* ### Annex I. Risk Assessment Matrix ### Annex I. Risk Assessment Matrix ### Conjunctural risks — Key risks, likelihood, impact, and policy responses - Fiscal vulnerabilities and higher long-term interest rates - Likelihood: High - Impact if Realized: High - Summary of risk: Rising public debt and deficit levels may put upward pressure on long-term interest rates and increase the risk of sovereign bond market disruptions, amplify capital flow volatility, tighten financial conditions, threaten sovereign debt sustainability, and trigger global spillovers; market imbalances (such as reduced investor capacity to absorb sovereign debt) could emerge, exacerbating risks from a close sovereign-financial nexus. - Country-specific note: Congo’s limited fiscal spaces and recent fiscal slippages threaten to weaken the country’s fiscal medium-term discipline. Incomplete implementation of the currently committed fiscal consolidation path would very likely exacerbate debt vulnerabilities, threaten debt sustainability, and deteriorate the country’s capacity to repay the Fund. - Policy Response: - Mitigation efforts should focus on broadening the revenue base, improving spending efficiency, and strengthening debt management, while advancing PFM and governance reforms to bolster confidence and resilience. - Priority should also be given to fiscal and structural reforms aimed at preserving debt sustainability, enhancing competitiveness, deepening regional integration, and improving the business environment to strengthen investor confidence. - Commodity price volatility - Likelihood: High - Impact if Realized: High - Summary of risk: Shifts in supply and demand—driven by geopolitical tensions and conflicts, OPEC+ actions, or the green transition—may fuel commodity price swings, intensifying external and fiscal pressures, social unrest, and macroeconomic instability. Given Congo’s heavy reliance on oil revenue and export proceeds, weaker than expected commodity prices are a downside risk; conversely, higher oil prices are an upside risk. - Policy Response: - Strengthen non-oil revenue mobilization and further rationalize non-priority spending. - Leverage high oil revenues: (i) to build up fiscal buffers and accelerate structural reforms to diversify the economy, enhance competitiveness, and deepen regional integration; and (ii) continue with reform measures that reduce Congo’s vulnerabilities and attract investments to the country. - Bolster social assistance programs to help the most vulnerable cope with food inflation. - Geopolitical tensions - Likelihood: High - Impact if Realized: High - Summary of risk: Intensification of conflicts and weakening multilateralism may trigger commodity price volatility, increase migration pressures, reignite inflation, and weigh on growth via undermined confidence, investment, tourism, trade, and supply chains; security issues in the Central African region could generate further fiscal pressures. - Policy Response: - Accelerate fiscal and structural reforms to reduce external imbalances, build buffers, enhance competitiveness, deepen regional integration, and effectively allocate resources to safeguard the most vulnerable populations. - Escalating trade measures and prolonged uncertainty - Likelihood: High - Impact if Realized: Medium - Summary of risk: Rising trade barriers and policy uncertainty could reduce trade, investment, and growth, and reintroduce inflationary pressures—especially in countries imposing tariffs—amplified by global value chain bottlenecks. - Policy Response: - Strengthen efficiency and prioritization of public spending by enhancing procurement practices and improving resource allocation to sectors most affected by shortages. - Renew efforts to diversify the economy and improve inventories and distribution management to reduce reliance on imports. - Improve efficiency of customs administration and ease bottlenecks at borders to help lower trade costs. - Decline in International Aid - Likelihood: High - Impact if Realized: Medium - Summary of risk: A sharp reduction in international financial assistance could severely affect low-income and fragile countries, straining public finances, worsening current accounts, increasing debt vulnerabilities, and deteriorating living conditions and food security. - Policy Response: - Continue fiscal and structural reforms to free up fiscal space needed to roll out targeted social programs and leverage remittances to fund and promote development projects. ### Structural risks — Climate and longer-term vulnerabilities - Climate change - Likelihood: Medium - Impact if Realized: Medium/ High - Summary of risk: Extreme climate events and rising temperatures could cause loss of life, damage to infrastructure, food insecurity, supply disruptions, and heighten economic and financial instability; lower domestic agricultural production, forced population displacement, diversion of development resources to emergency response, weakened capacity to repay the Fund, and adverse implications for food security and incomes. - Policy Response: - Strengthen food security and rural development programs. - Promote investment in climate-resilient infrastructure and address infrastructure gaps and income disparities among regions, while establishing shock-responsive social safety nets. - Engage in prevention, preservation, and make budgetary room for catastrophe contingency planning. - Promote economic diversification and carefully consider public investment in the hydrocarbon sector. --- ### Annex II. Downside Scenario — Assumptions, impacts, and policy options ### Scenario assumptions - Oil prices: 10 percent lower oil prices relative to the January 2026 World Economic Outlook update assumptions, starting in 2026 through the medium term. - Banking exposure limits and holdings: - Banks expand exposure to the Congolese sovereign only up to 25 percent of assets. - Bank assets will grow over September 2025 to December 2026 at the nominal GDP growth rate. - 66 percent of Congo’s domestic sovereign debt is held by non-resident regional banks. - Scenario builds on historical volatility of the Brent oil price in 2023–25 and constraints on the regional banking system’s capacity to absorb Congo’s debt. ### Quantified impacts and outcomes - Additional financing needs: - Resulting additional financing needs are 3.8 percent in 2026, and 1.9 percent in 2027. - More than two thirds of the 2026 additional financing needs—3 percent of GDP—stem from domestic financing constraints of a heavily exposed banking system. - Growth and fiscal effects: - Lower oil prices slow hydrocarbon export revenues and domestic aggregate income and demand, reducing growth in 2026 by an annual 18 to 29 bps over 2026–30. - The decline in public revenues would deteriorate the primary fiscal balance by 0.8 pp of GDP in 2026 compared to the baseline, with the effect moderating subsequently. - Reserves and banking effects: - Central bank net foreign assets projected for end-2026 decline by 47 percent, narrowing to 15 percent by end-2030. - Reduced net borrowing from commercial banks: reductions are 3 and 1.2 percent of GDP in 2026 and 2027 respectively—reflecting restricted bank lending capacity. - Lower growth in banks’ sovereign exposures implies more moderate growth in bank assets and deposits over 2026–27. - Residual financing gap and risks: - Recurrent episodes of unsuccessful or partially successful treasury auctions, tightening regional financial conditions, and rising gross financing needs across CEMAC highlight challenges in meeting financing needs in the regional treasury market. - Additional financing needs could arise should the 2025 fiscal slippage prove more persistent than projected in the baseline. ### Policy responses and mitigation options - Primary defense: sustained fiscal consolidation - Emphasize sustained fiscal consolidation given ODA challenges and limited multilateral financing in the absence of a Fund-supported program. - Reinforce domestic revenue mobilization and promote private sector-led growth, particularly non-hydrocarbon sectors. - Expenditure measures: - Additional spending rationalization by reducing non-prioritized expenditures. - Consider additional expenditure rationalization for the wage bill, the administrative consumption of goods and services, and non-social policy transfers, while safeguarding appropriate public employment in priority sectors. - Full market pricing of the gas used by CEC for electricity generation to reduce oil-related transfers and help preserve progress on fuel subsidy reform (this requires reforms enforcing full and regular billing of CEC clients for their electricity consumption). - Financing alternatives: - Seek access to donors’ concessional funding sources. - Seek funding from domestic and/or regional nonbank investors, noting that promotion of a sizeable regional non-bank investor base is likely achievable only over the medium term given currently limited size of the non-bank financial sector. - Prefer alternative strategies that avoid resorting to non-concessional debt issuance; otherwise, budget execution and amortization plans could be compromised. --- ### Debt Sustainability Analysis (Joint Bank-Fund DSA) — Findings and risks ### Risk ratings and summary indicators - Risk of external debt distress: In Debt Distress - Overall risk of debt distress: In Debt Distress - Granularity in the risk rating: Sustainable - Application of judgement: No - Composite index (CI): estimated at 2.5 (based on the January 2026 WEO update and 2024 World Bank CPIA data), indicating a weak debt carrying capacity for Congo, below IDA average. ### Recent arrears and classification - Preliminary data as of end-February 2026: - USD103.2 million (0.66 percent of GDP) new external arrears to official creditors were accumulated. - USD149.6 million (0.96 percent of GDP) arrears to commercial creditors were recognized. - These arrears reinforce the “in debt distress” rating for external and overall debt. ### Assessment nuances and caveats - Debt assessed as “sustainable” but with high risks surrounding this assessment. - Key mitigating assumptions for sustainability: - Steady and significant declines in relevant debt ratios going forward. - Authorities’ commitment to increase government deposits at the Central Bank over the medium term. - Continued steady fiscal consolidation is assumed; significant fiscal slippages in 2025 increase risks around this assessment. - Debt dynamics and operations: - The 2024 domestic debt reprofiling and related maturity extensions partly postponed amortization of Treasury obligations amid persistent debt service pressures, including a domestic debt amortization peak in October 2025. - Proceeds of new eurobonds issued in November and December 2025 are intended to fund an equivalent amount of debt service on domestic treasuries maturing from November 2025 to February 2026. - These operations highlight continued liquidity constraints and pose challenges for debt management. - Vulnerabilities and threshold breaches: - The PV of public debt-to-GDP indicator exceeds its benchmark through 2036. - PV of external debt-to-GDP breaches the threshold in 2025 in the baseline (not in the historical scenarios). - PV of debt service-to-exports breaches the threshold in 2028 in the baseline and 2026–32 in the historical scenarios. - PV of debt service-to-revenue breaches its relative threshold in 2026–29 in the baseline and in 2026–32 in the historical scenario. - Other risks: - Highly vulnerable to downside risks of oil price shocks. - Conditions in regional markets (CEMAC banking systems) may tighten further, or government financing needs may exceed baseline projections, exacerbating funding challenges. - Increased vulnerabilities and potential elevated risk-weighting on domestic debt borrowing may hinder the country's capacity to secure financing from the market at reasonable borrowing costs. ### Recommended actions - Continue pursuing fiscal consolidation underpinned by deep fiscal structural reforms. - Enact economic diversification policies to reduce risks and prepare for reduced long-term oil production and demand. - Clear domestic arrears. - Continue enhancing debt management and operationalize revamped internal monitoring and reporting procedures and inter-institutional coordination and fiscal risk assessment committees to strengthen liquidity management and debt planning. --- ### Public debt coverage and data notes - Public debt in this DSA is limited to central government debt, including oil-backed debts, due to data gaps. - Local governments are not allowed to borrow but collect local taxes and receive central government transfers. - The analysis includes debt from oil-backed pre-financing arrangements contracted with oil traders through the national oil company (SNPC). - Non-publicly guaranteed debts of SOEs, including SNPC, are incorporated as contingent liabilities due to data limitations. - Social debt and arrears treatment: - Unpaid and verified social debt pertaining to the two pension funds (CNSS and CRF) are added to the stock of domestic debt. - Example: in 2023, CFAF 269 billion (3 percent of GDP) of unpaid debt from the CNSS was recognized and repaid by the government through securitization, on top of CFAF 360 billion (4.1 percent of GDP) of social arrears that materialized earlier in the same year. *Source: Annex I. Risk Assessment Matrix; Annex II. Downside Scenario; Republic of Congo: Joint Bank-Fund Debt Sustainability Analysis (excerpts from the provided IMF document).* ### 2. Domestic debt is identified primarily ### 2. Domestic debt is identified primarily ### Identification and holder uncertainty - Domestic debt is identified primarily on a currency basis, rather than a residency basis, because large amounts of Congo’s debt are subscribed by banks within the regional CEMAC market (i.e., within the currency union), where the BEAC is not yet able to accurately monitor the holder of these instruments within CEMAC. - Treasury debt is defined on a residency basis for creditors whose residency can be tracked. - About half of the 2025 treasury auctions excluding buybacks were subscribed by non-resident banks. - Inferring the actual holdings of Congolese debt by the non-resident banks is challenging due to lacking data on post-subscription treasury bond trades. ### Contingent liabilities (CL) and stress-test calibration - The contingent liability (CL) stress test is calibrated to add up to 22.3 percent of GDP. - Components and calibrations: - Possible missing general government debt due to legally disputed claims of domestic arrears: about 0.8 percent of GDP. - Revised arrears under audit not included in the forecast assumptions: 2.5 percent of GDP. - Litigated external debt: 2.05 percent of GDP. - Non-guaranteed debt of the 10 largest SOEs is estimated at 31 percent of GDP; under the stress test, one third could end up on the central government balance sheet: 10 percent of GDP (the remainder assumed to be paid through liquidation of SOEs’ assets). - Total PPP capital stock estimated at 5.7 percent of GDP, with 35 percent of this stock assumed to end up on the government balance sheet under the stress test: 2 percent of GDP. - Financial sector crisis default value applied to the government balance sheet given the limited size of the banking system: 5 percent of GDP. - Notes on CL design: - The CL shocks include a CL shock applied only to external debt to consider repatriation impacts on foreign-owned resident companies. - A default shock of 2 percent of GDP will be triggered where government-guaranteed debt is not fully captured under the country’s public debt definition; teams may reduce this to 0 percent if already included and risks are negligible. ### Coverage, data gaps, and SOE exposure - There are 31 SOEs in Congo, with government ownership ranging from 50 to 100 percent. - The DSA contingent liability stress test considers only the debt of the 10 largest SOEs due to lack of financial information on other SOEs. - Authorities published the first quarterly bulletin on public debt in March 2024, reporting details on the 10 largest SOEs’ debt. - Additional efforts needed: establishment of a single electronic repository for SOEs debt information managed by the Caisse Congolaise d'Amortissement (CCA) to improve timeliness, coverage, and accuracy of SOE data. ### Evolution and composition of public debt - Total public debt estimated to have reached 97.3 percent in 2025 and expected to remain high. - Change and composition: - Total public debt fell by 5.7 percentage points from end-2023 peak of 102.9 percent of GDP to 97.3 percent in 2025. - Domestic debt projected to have reached an estimated 58.8 percent of GDP in 2025—8.3 percentage points higher than at the start of the 2022 ECF arrangement completed in early 2025. - External debt stood at an estimated 38.5 percent of GDP at end-2025—1 pp higher than in 2024. - Total public debt projected to reach 94.8 percent of GDP in 2026, of which domestic debt would account for 58.6 percent of GDP. - External debt developments: - External debt decreased from 39.4 percent of GDP at end-2023 to 37.5 percent of GDP by end-2024. - In November and December 2025, Congo issued and reopened USD 930 million (6 percent of GDP) in new eurobonds at coupon rate 9.875 percent and maturity of 7 years, including a 2-year grace period, with principal repaid in five equal installments between November 7, 2028, and November 7, 2032. - Eurobond yield improved from 13.7 percent in November 2025 to 13 percent in December 2025; both issuances were conducted at distressed terms. - Operation’s proceeds of USD 812.4 million (CFAF 472.3 billion; 5.2 percent of GDP) intended exclusively to amortize an equivalent amount of domestic treasury debt due between November 2025 and February 2026. - In February 2026, authorities announced an additional Eurobond issuance of USD 700 million (maturing in 2035 with a yield of 11.625 percent), intended to partially buy back the November bond and redeem maturing regional market debt; transaction not included in the DSA due to unavailable redemption information. - As of December 2024, a large share of external debt was owed to China (including commercial creditors, 11.1 percent of GDP). - Debt owed to oil traders fell from 3.9 percent of GDP in 2023 to 1.6 percent of GDP at end-2024 and 0.9 percent of GDP in September 2025; this debt expected to be fully repaid by end of 2027. - Domestic public debt: - Decreased from 63.5 percent of GDP in 2023 to an estimated 60.6 percent of GDP in 2024 and 58.8 percent of GDP projected in 2025. - Composition: about half owed to banks and non-bank institutions; one fifth relates to commercial arrears; one-tenth represents social arrears; remainder comprises statutory advances from BEAC and the use of SDRs. ### Arrears and debt service - By end-2024, total arrears amounted to USD 3.38 billion (23.6 percent of GDP), virtually unchanged relative to end-2023. - External arrears: USD 568 million (4 percent of GDP), higher than 3.5 percent of GDP at end-2023. - Audited domestic arrears: USD 2.81 billion (19.7 percent of GDP), lower than 20.2 percent of GDP at end-2023. - Preliminary data suggests between April 2025 and February 2026: temporary official external arrears accumulated about USD 103.2 million and recognized USD 149.6 million in commercial arrears. - Agreements and restructurings: - DSA incorporates resolution agreement from 2021 regarding legacy arrears owed to Exim Bank India, and agreements in principle with Brazil and Russia. - Impact of three restructuring agreements with external private commercial creditors (oil traders) included; smallest creditor restructuring signed 2020Q3 (nominal haircut and maturity extension), repaid by early-2022; others signed in 2021Q1 and 2022Q1 with price-linked debt service formulas. - Debt to one oil trader repaid by refinancing through two other oil traders in December 2024; all related debts expected to be fully repaid by 2027. - Recent recognition of arrears to two companies originating from foreign-currency denominated debt awaiting restructuring: one missed payment includes both amortization and interest; the other relates solely to interest with amortization scheduled to begin in March 2026. - Drivers of arrears: - Accumulation of domestic arrears and missed external debt services stems from liquidity pressures, capacity constraints, cash-flow management gaps, and prioritization challenges. - Full operationalization of the Treasury Single Account (formally established but technically challenged) and full operationalization of the SIGFIP financial management system expected to help once remaining issues are resolved with IMF, World Bank, and France assistance. - Ongoing reforms in public investment management and the 2022 public-private partnership law are complementary. - Caisse Congolaise d’Amortissement (CCA) needs to follow revamped rules from its 2024 reorganization and ensure timely debt service through clear amortization and issuance plans. - Increased debt transparency required: completion of audits on social and domestic arrears, better coordination among CCA, Treasury, and BEAC, full operationalization of the single debt database, and close monitoring of SOE-related contingent liabilities. - External debt service projections and 2025 payments: - External debt service payments projected at USD 528 million in 2025, including USD 83 million in interest payments. - Largest amortization payments scheduled to bilateral creditors and commercial creditors: USD 270.8 million and USD 17.8 million, respectively. - Amortization to multilateral creditors in 2025: USD 56.6 million. - Efforts to clear pre-HIPC bilateral arrears ongoing; largest remaining owed to Angola: USD 111.5 million. - Authorities cleared legacy external arrears of USD 4 million with all except one commercial supplier in 2022; remaining commercial claim FCFA 8.9 billion equal to USD 14.6 million under discussion. - Authorities contested USD 276.5 million of pre-HIPC arrears owed to a supplier and requested HIPC treatment for another USD 96.4 million of pre-HIPC arrears (included at face value in the DSA). - Domestic debt service and arrears in 2024–2025: - Domestic debt service payments reached CFAF 1,643 billion in 2024 (18.3 percent of GDP). - Domestic debt service expected to peak at CFAF 2,517 billion in 2025—27.8 percent of GDP; breakdown: CFAF 276 billion in interest payments, CFAF 2,086 billion in principal payments, and CFAF 155 billion in repayments of domestic arrears. - Stock of domestic arrears expected to remain elevated at CFAF 1,690 billion (18.6 percent of GDP) at end-2025. - World Bank FY26 PPAs support prioritizing new concessional external debt, restructuring and empowering the national debt committee, establishing a comprehensive fiscal risk framework with dedicated risk committees and annual disclosure, and expanding annual debt reporting to cover all recorded SOEs. - World Bank FY26 PPAs indicate government will not enter contractual obligations for new external public and publicly guaranteed non-concessional debt in FY26 beyond any non-concessional budget support loans that receive waivers under the IMF program, except if the non-concessional debt limit is adjusted by the World Bank to i) reflect any material change of circumstances or ii) in coordination with the IMF. ### Use of escrow accounts and reprofiling operations - In 2025, escrow account used to service external public debt to largest bilateral creditor expected to have been funded with CFAF 141 billion (1.6 percent of GDP). - It is critical that any accumulation of excess balances in the escrow account be repatriated to alleviate ongoing funding stress. - Reprofiling and issuance actions: - Authorities reprofiled CFAF 1,136 billion (12.7 percent of GDP; including CFAF 191 billion in Treasury bills and CFAF 945 billion in Treasury bonds) in government treasuries and issued CFAF 250 billion in new short-term treasuries at end-2024. - First phase of the PNOT announced CFAF 1,236 billion worth of treasuries to be exchanged, of which CFAF 1,136 billion were executed; reprofiling extended average maturity of exchanged treasuries from 2.4 years to 6.3 years. - Proceeds of end-2025 eurobonds expected to be used entirely to repay domestic treasuries maturing until February 2026. - Gross issuance of new securities on the regional market remained elevated in 2025Q4, limiting the offsetting impact on domestic debt. ### Policy priorities and reform actions - Addressing public debt management and reporting challenges is a key priority. - Ongoing and recommended actions: - Operationalization of the medium-term debt management strategy focused on prioritization of concessional borrowing, reduction of public debt, and proactive management of potential exchange rate risks. - Implementation of credible amortization and emission plans. - Prioritization of timely debt service and arrears clearance. - Full operationalization of the Treasury Single Account (formally established but subject to technical delays). - Improve capacity, information sharing, and data sharing arrangements among entities that collect debt information. - Resolve institutional weaknesses affecting the effectiveness of the CCA without delay. - Accelerate debt management and public financial management (PFM) reforms with IMF and World Bank technical assistance. *Source: IMF staff report text provided in the supplied PDF content.* ### 10. Box 1 summarizes the main assumptions for key macroeconomic variables in the scenario ### Box 1. Main Macroeconomic Assumptions ### Real GDP and sectoral growth - Real GDP growth reached 2.1 percent in 2024. - Real GDP growth is estimated at 2.4 percent in 2025—"1.3 percentage point short of initial projections" (also stated as 1.3 pp lower than projected at the 6th ECF review). - Growth is expected to pick up to 2.8 percent in 2026. - Over 2027–30, Congo’s economy is projected to grow on average at 3.6 percent. - Hydrocarbon sector: - Expected average growth of 1.8 percent in 2025–26 (text also notes hydrocarbon growth slowed in 2025 to an estimated 3.3 percent—0.3 pp short of initial expectations—before decelerating to 0.3 percent in 2026). - Medium term hydrocarbon activity projected to contract by an average 0.4 percent in 2027–30. - Oil production: oil production declining by 1 percent to 95 million of barrels (period referenced to 2024). - Non-hydrocarbon sector: - Non-hydrocarbon sector growth softened to 2.5 percent in 2024 (earlier reference) and is reported as settling at 2.1 percent in 2025—"1.6 pp below 6th ECF review projections." - Projected to average 2.7 percent over 2025–26 in one passage and projected to average 4.3 percent over 2027–30 in another passage. - Stronger activity in mining, manufacturing, and telecommunications projected to lift non-hydrocarbon growth to 3.4 percent in 2026 (Box text). ### Inflation and current account - Inflation eased to 3.1 percent in December 2024. - Inflation picked up again in early 2025, driven by higher energy costs and excise-tax increases. - Projections suggest inflation will return to the CEMAC inflation target of 3 percent at end 2027. - Current account: - Estimated current account deficit of 3 percent of GDP in 2024. - Estimated current account deficit worsened to 5.8 percent of GDP in 2025. - Over 2026–45 the current account deficit is projected to average 5.1 percent of GDP. ### Fiscal balance, consolidation, and arrears - Non-hydrocarbon primary deficit: - Narrowed to 6.7 percent of non-hydrocarbon GDP in 2024 (spending-side fiscal tightening). - Projected to widen to 8.7 percent of non-hydrocarbon GDP in 2025. - Expected to narrow to 7.9 percent in 2026. - Over 2027–31, consolidation expected to continue with the non-hydrocarbon primary deficit declining cumulatively by 6.3 pp until end-2031 (later noted as narrowing cumulatively by 6.3 pp to 2.3 percent in 2031). - Fiscal measures to support consolidation: - Revenue measures: further strengthening of tax and customs administration; adjustments to excise tax base and rates; full implementation of VAT on upstream hydrocarbons; elimination of CIT exemptions granted under establishment conventions; modernization and digitalization of tax and customs administrations; rationalized tax incentives; reinforced audit capacity; improved monitoring. - Expenditure measures: reprioritization toward high-return capital investment and social sectors; SOE reforms to reduce transfers and contingent liabilities; gradual phase-out of fuel subsidies with well-targeted social protection. - Domestic arrears repayments: - Reimbursement of CFAF 88 billion (1 percent of GDP) in 2024. - Estimated CFAF 155 billion (1.7 percent of GDP) in 2025. - Authorities’ medium-term fiscal strategy prioritizes domestic arrears repayments while safeguarding social and domestically-financed capital spending. - Gradual clearance of domestic arrears expected to free up liquidity to the private sector and banks and reduce NPLs. ### Gross financing needs and financing assumptions - Gross financing needs (GFN): - Declined marginally from about 16.4 percent of GDP in 2023 to 16.0 percent in 2024. - Estimated to have jumped to 27.2 percent of GDP in 2025, driven by substantial domestic debt service obligations on maturing government treasuries (note ¶6). - Projected to start sliding to 9.2 percent of GDP by 2035, as total amortization declines. - Budgetary support from development partners excluding IMF: - Estimated USD 81 million in 2025, down from USD 99 million in 2024 (Text Table 4). - External financing terms: - DSA assumes Congo continues to obtain the bulk of new external financing on concessional terms, including concessional Shorter-Maturity Loans (PBA-SMLs) from many IDA windows, complemented with a new blend credit financing in 2026. - The grant element remains around 33 percent over 2029–44. - Domestic financing profile and interest rates: - Medium-term domestic financing mix tilted towards short-term treasury bills (less than 1-year maturity) and long-term (more than a 3-year term) treasury bonds, in line with IMF CR 25/75. - Assumed domestic financing composition for 2024–2029: - 50 percent short-term (less than 1-year term) - 10 percent up to a term of 3 years - 40 percent with a term of more than 4 years - Long-term convergence: as debt is reduced and financial conditions improve, composition converges to more than 90 percent medium- or long-term, of which more than 60 percent is long-term (more than a 3-year term). - Assumed interest rates: - Short-term financing (up to 1 year) obtained at average interest rate of 6.5 percent. - Medium- and long-term financing obtained at average interest rate of 9.0 percent. - Average interest rates for medium term financing (terms up to 3 years) converge over time to 6.5 percent, reaching that level in 2030. - All domestic financing is denominated in local currency. - PNOT impacts: - Impacts of the Programme National d’Optimisation de la Trésorerie (PNOT) on banks’ demand for medium-term government securities are accounted for; expected reduction in demand for medium-term treasury bonds after the PNOT and prioritization of long-dated treasury issuance. ### Realism tools and mitigating factors - Fiscal adjustment-growth realism tool suggests projected overall real GDP growth path could be lower, but staff assesses projected growth and fiscal paths to be realistic. - Rationale: - Overall real GDP growth composed of hydrocarbon (volatile, driven by oil production) and non-hydrocarbon growth (impacted by fiscal adjustment policies); non-hydrocarbon path consistent with realism tool. - Repayments to largest external commercial creditors linked to oil prices are largely completed and expected to be finalized by end-2027—mitigating negative oil-price shock risk. - Plans to gradually increase government deposits at BEAC provide an additional buffer. - DSA incorporates interest rates for domestic financing consistent with historical trends and current market conditions. - Further international capital markets access possible in the long term conditional on successful structural and governance reforms. - Primary balance realism tool: - Suggests a realistic 3-year adjustment of 3.96 percent of GDP, larger than the 2.64 adjustment suggested in the previous DSA (IMF CR 25/75). - Noted data/measurement risk: - Realism tools show a history of large unexplained increases for external debt due to revisions to debt stock and debt service statistics. ### Structural drivers, reforms, and risks to the outlook - Long-term drivers of non-hydrocarbon growth: - New sector development: agribusiness, mining, manufacturing (cement and processed wood products), and services (telecommunications, tourism, banking, and transport) supported by development partners’ funding, government support, and training. - Business-friendly reforms: 2022 PPP law, 2024 competition policy laws, 2022 anti-corruption law, and 2025 inspections law are expected to improve business conditions; note that the reform granting a concession for electricity distribution to a private operator has been put on hold. - Targeted fiscal spending: revenue-led fiscal consolidation, prioritization of productive capital and social expenditures, proactive liquidity management, planned lengthening of domestic debt maturity, and reduction in government domestic debt. - Gas sector: - After modest production in 2024 and 2025, the gas industry is expected to expand over the medium to long term. - The new gas code requires more efficient use of associated gas and provides incentives to establish an integrated gas value chain. - Downside risks listed: - (i) intensifying regional conflicts, persistent technical issues in oil production and weaker oil prices; - (ii) recurrent buildup of domestic arrears and delays in the 2023 multi-year domestic arrear clearance plan; - (iii) lingering liquidity management issues and funding pressures, reduced absorption capacity or appetite for government debt within the regional banking system; - (iv) slow progress in fiscal and debt management reforms; - (v) social pressure in the wake of upcoming elections; - (vi) recurring climate events and delayed adaptation strategies. - Potential upside and mitigation: - Diversification benefits could materialize earlier through faster job creation, higher household incomes, and private consumption, supporting domestic absorption and GDP growth. - Repayment progress to commercial creditors and increased government deposits at BEAC mitigate some financial risks. *Source: Congolese authorities and IMF staff estimates (Box 1 content from the provided IMF DSA text).* ### 12. The composite index (CI) is assessed at 2.5 based on the January 2026 World Economic ### 12. The composite index (CI) is assessed at 2.5 based on the January 2026 World Economic Outlook update and 2024 World Bank CPIA data ### Composite indicator (CI): methodology and results - CI assessed at 2.5, indicating a weak debt carrying capacity for the Republic of Congo. - Methodology: CI combines CPIA score, external conditions (world economic growth), and country-specific factors (including import coverage of reserves). - CI cutoff value for medium debt carrying capacity: 2.69. - CI Score and components (as presented): - Calculation of the CI Index - Components / Coefficients (A) / 10-year average values (B) / CI Score components (A*B) = (C) / Contribution of components - CPIA: 0.385 / 2.83 / 1.094 / 44% - Real growth rate (in percent): 2.7 / 1.91 / 0.678 / 0.052% - Import coverage of reserves (in percent): 4.05 / 235.34 / 41.435 / 58% - Import coverage of reserves^2 (in percent): -3.99 / 12.49 / -0.50 / -20% - Remittances (in percent): 2.02 / 0.287 / 0.010 / 0.0% - World economic growth (in percent): 13.5 / 0.3 / 0.035 / 0.4117% - CI Score: 2.5 / 100% / CI rating: Weak ### Key debt thresholds and benchmarks cited - APPLICABLE EXTERNAL debt burden thresholds and TOTAL public debt benchmark (as presented): - PV of debt in % of GDP: 35 - PV of total public debt in percent of GDP: 35 - PV of debt in percent of Exports: 140 - PV of debt in percent of GDP (alternate listing): 30 - Debt service in % of Exports: 10 - Debt service in % of Revenue: 14 ### External debt sustainability: baseline and stress-test findings - Under the baseline scenario: - PV of debt-to-GDP ratio exceeds its threshold in 2025 and falls below it for the remainder of the projection period. - Debt service-to-exports ratio breaches its threshold of 10 percent only in 2028 and remains under the threshold otherwise. - Debt service-to-revenues ratio: estimated at 14 percent in 2025; projected to increase to 16 percent in 2026; projected to return to 14 percent in 2029 and be below thereafter. - PV of external debt-to-exports ratio is below the indicative threshold of 140 percent and projected to decline to an average of 57.5 percent over 2029–35. - Stress tests: - All indicators of external public debt breach their indicative thresholds in stress test scenarios by 2026 and remain above the threshold in the medium term. - The exports shock is the most extreme: a decline in exports equal to one standard deviation below their historical average in the second year would cause the PV of external debt-to-exports ratio to rise and remain elevated, and the PV of external debt-to-GDP ratio would peak at 78.1 percent in 2027. - Tailored tests triggered: commodity price, natural disasters, and market financing shocks (commodity price and market financing tailored tests are activated; natural disaster module also triggered). ### Public debt sustainability and domestic debt dynamics - Overall public debt: - Ratio of PV of public and publicly guaranteed debt-to-GDP (including domestic arrears and past direct financing from BEAC) extensively exceeds the 35 percent benchmark until 2037 and then remains below the threshold for the remainder of the horizon. - Public debt is assessed as in distress but sustainable conditional on sustained fiscal consolidation and improved liquidity management. - Domestic debt: - Domestic debt-to-GDP ratio peaked at 60.6 percent in 2024. - Domestic debt fell from an estimated 58.8 percent in 2025 onwards and is projected to return gradually to the LIC DSF median of 17.2 percent of GDP over the medium term. - Net domestic debt issuance (ratio to GDP and domestic debt stock in the previous year) turned negative in 2025 and is expected to remain negative in 2026 onwards. - Domestic debt solvency (debt-to-GDP) and liquidity (debt service-to-revenue) indicators exceed comparator median values for LICs beyond 2035. ### Recent events affecting debt profile and liquidity - Legacy external arrears to all bilateral and commercial creditors (excluding disputed debts and pre-HIPC claims) have been resolved; however: - End-September 2025 debt data show external arrears significantly exceeded the threshold of 1 percent of GDP, mainly due to newly recognized arrears to two companies and newly accumulated arrears to bilateral creditors; this trend continued until February 2026. - Eurobond issuances: - New eurobond issued in November 2025 and second tranche in December 2025 to fund significant domestic debt service expected for end-2025 and early 2026. - The 2025 eurobond issuance, at distressed yields, intensified debt vulnerabilities and deteriorated Congo’s debt outlook. - Debt management reforms: - Restructuring of the debt management office in June 2024 and publication of a comprehensive quarterly debt bulletin covering stock and flow data since end-March 2024 were key milestones. - Publication of the quarterly debt bulletin delayed since July 2025 to ascertain accuracy and consistency; expected to resume in the first quarter of 2026. - More work required, including full operationalization of the key reforms of the CCA reorganization. ### Risk assessment and vulnerabilities - Overall assessment: external and overall debt are sustainable but currently “in distress” due to weaknesses in debt management and recurrent delays in paying external debt service. - Major risks: - Liquidity risks and vulnerability to negative oil price shocks. - Elevated total public debt-to-GDP ratio peaking at 90 percent in 2026 and exceeding the threshold through 2036 under the baseline scenario. - Large external debt service-to-revenue ratio exceeding the threshold over 2026–29 under the baseline scenario. - Tailored stress tests lengthen breach periods for PV of public debt-to-GDP ratio; commodity price shock triggers breach in PV of external debt-to-GDP. - Underdeveloped secondary markets and elevated sovereign exposure create a sovereign-bank nexus that could quickly propagate default and liquidity risks. - Additional vulnerability to imported inflation from elevated global food and other import prices. - Political or social opposition to reforms could slow fiscal consolidation and arrears clearance, weighing on banks’ ability to lend and on growth. - Unfavorable oil production or price outcomes and shortfall of foreign direct investment are material downside risks. ### Policy implications and recommendations (as presented) - Strengthen and fully implement debt management reforms, including operationalization of CCA reorganization and resumption and improvement of debt bulletin publication. - Sustain significant fiscal consolidation to reduce debt ratios and address liquidity pressures. - Clear arrears and improve liquidity management to mitigate rollover risks. - Continue diversification efforts to reduce dependence on oil exports and to expand non-hydrocarbon exports and non-hydrocarbon contribution to GDP growth. - Monitor and limit reliance on non-concessional financing and further eurobond issuance to avoid exacerbating medium-term external debt vulnerabilities. - Leverage planned accumulation of government deposits at the Central Bank and improvements in domestic market development to alleviate liquidity risks. *Source: LIC DSA estimations and IMF staff analysis presented in the Republic of Congo DSA chapter.* ### 24. The authorities concurred with Staff’s assessment that Congo remains in debt distress, ### 24. The authorities concurred with Staff’s assessment that Congo remains in debt distress, ### Debt-distress assessment and fiscal stance - Authorities concurred with Staff’s assessment that Congo remains in debt distress. - Debt sustainability requires continued and steady fiscal consolidation, with additional support coming from the projected economic recovery. - They reiterated the commitment to prioritizing concessional financing. - Eurobond issuances were described as one‑off debt management operations intended to smooth peaks in domestic debt obligations amid tight regional liquidity conditions. ### Debt management commitments and actions - Authorities reaffirmed commitment to strengthening debt management by: - Improving interdepartmental coordination and communication. - Enhancing cash flow management to prevent the recurrence of external arrears. - The recent restructuring of the CCA is identified as a key step in this effort. - Authorities acknowledged ongoing coordination and liquidity challenges within the debt management framework. - They re‑emphasized determination to resolve domestic arrears and manage domestic debt issuance prudently in line with Congo’s financing needs. - Objective: clear most outstanding domestic arrears by the end of the decade while advancing public financial management (PFM) reforms to avoid new arrears. ### Stress tests, scenarios, and key parameters (as presented) - The public external and total public debt analyses present baseline, historical scenario, and “most extreme shock” stress tests. - Numerical parameters and labels appearing in the stress-test tables and charts (preserved exactly as in source): - Avg. grace period: 5 - Commodity price: No - Avg. nominal interest rate on new borrowing in USD: 5.0% - USD Discount rate: 5.0% - Avg. maturity (incl. grace period): 20 - Market financing: No - Tailored Stress: No - Combined CL: Yes - Natural disaster: No - Size / Customization of Default Settings: No / NoNo / No - Threshold: 3.3%3.3% - Shares of marginal debt / Terms of marginal debt: Market financingNoNo (as displayed) - Borrowing assumptions on additional financing needs resulting from the stress tests*: All the additional financing needs generated by the shocks under the stress tests are assumed to be covered by PPG external MLT debt in the external DSA. Default terms of marginal debt are based on baseline 10-year projections. - Note on most extreme shock: “The most extreme stress test is the test that yields the highest ratio in or before 2035. The stress test with a one-off breach is also presented (if any), while the one-off breach is deemed away for mechanical signals. When a stress test with a one-off breach happens to be the most exterme shock even after disregarding the one-off breach, only that stress test (with a one-off breach) would be presented.” - Note on commodity price shock: “The magnitude of shocks used for the commodity price shock stress test are based on the commodity prices outlook prepared by the IMF research department.” ### Indicators and projected series (figures summarized) - Figure 1: Indicators of Public and Publicly Guaranteed External Debt Under Alternative Scenarios, 2025–35 - Charts display Debt service-to-revenue ratio, PV of debt-to-exports ratio, PV of debt-to-GDP ratio, and Debt service-to-exports ratio across 2025–2035 with labels showing “Most extreme shock: Exports”. - X-axis years: 2025 2027 2029 2031 2033 2035 (as shown). - Figure 2: Indicators of Total Public Debt Under Alternative Scenarios, 2025–37 - Labels shown: Baseline, Most extreme shock 1/, TOTAL public debt benchmark, Historical scenario, Default, User defined. - Percent labels preserved as shown: 14%14%, 48%48%, 38%38%, 3.3%3.3%. - Years illustrated include 2025–2037; series include PV of Debt-to-Revenue Ratio (Most extreme shock: Non-debt flows) and Debt Service-to-Revenue Ratio (Most extreme shock: Growth). - Figure 3: Drivers of Debt Dynamics–Baseline Scenario - Shows drivers such as Price and exchange rate, Real GDP growth, Nominal interest rate, Current account + FDI, Other debt creating flows, Real Exchange rate depreciation, Real interest rate, Primary deficit. - Time span in charts: 2020 through 2035 (and to 2036 in one chart), with comparisons to Current DSA, Previous DSA, DSA-2020 proj. - Figure 4: Realism Tools - Presents Fiscal Adjustment and Possible Growth Paths with multipliers: Baseline; Multiplier = 0.2; Multiplier = 0.4; Multiplier = 0.6; Multiplier = 0.8. - Shows 3-Year Adjustment in Primary Balance (In Percent of GDP) with horizontal axis values from -4.5 through 8.0 (as displayed). - Figure 5: Indicators of Domestic Public Debt, 2020–34 - Labels and values shown exactly as in source: Value 56% 44% 7.4% 4 0 4.9%. - Notes: “1/ Net domestic debt issuance is an estimate based on the calculated public gross financing need net of gross external financing, drawdown of assets, other adjustments and domestic debt amortization. It excludes short-term debt that was issued and matured within the calendar year.” - Charts include Domestic debt to GDP ratio, Net domestic debt issuance 1/, Domestic debt service to revenues incl. grants (Before PNOT / After PNOT). - Figure 6: Market-Financing Risk Indicators - Note preserved: “EMBIG data for the Republic of Congo is not available. The bond, due to mature in 2029, was trading at a discount of” (text truncated in source). ### Policy implications highlighted by authorities - Continue and steady fiscal consolidation to restore debt sustainability. - Strengthen debt management through better interdepartmental coordination and communication. - Enhance cash flow management to avoid external arrears recurrence. - Resolve domestic arrears and manage domestic debt issuance prudently to match financing needs. - Advance public financial management (PFM) reforms to prevent new arrears. - Prioritize concessional financing while treating Eurobond issuances as one‑off smoothing operations. *Source: Republic of Congo—IMF staff report excerpt (figures and notes reproduced exactly as in the provided content).* ### 14.5 percent over par with a yield to maturity of 11.6 percent and a spread of 804 bps over 7-year US treasury bond as o ### 1cogea2026001-source-pdf - 14.5 percent over par with a yield to maturity of 11.6 percent and a spread of 804 bps over 7-year US treasury bond as o ### Debt stock and creditor composition (selected figures) - Total public debt (Sep 30, 2025, preliminary): CFAF 1,487,593.0; USD 2,148. (table shows mixed units across dates; values reported in source table header) - External debt (Sep 30, 2025, preliminary): USD 546,134.1 (noted in table). - Domestic debt (various dates): examples include CFAF 438,770; USD 8250.5 (table entries). - Of which: arrears (external) reported as 312,504 (units per source table). - Multilateral and other creditors (end-2024 example): USD 1,161,2050 (table formatting preserved from source). - Official bilateral creditors (sample entries): USD 13,072,307 (table formatting preserved from source). - China (non-Paris Club) listed: values include 1,222,1973 (preserved exactly as in table). - Private creditors (sample): USD 1104 (preserved as in table). - Oil-prepurchased debt examples: USD 79,139 (preserved as in table). Notes: - The USD 930 million Eurobond issued in November–December 2025 will be incorporated into end‑2025 debt statistics upon completion of the forthcoming data updates. - Data updated until the end of September 2024 (source note). ### Debt decomposition and debt service (2024–26 excerpts) - Total debt stock (2024): USD 14,026 million; percent total = 100.0; percent GDP = 98.0. - External (2024): USD 5,362 million; percent total = 38.2; percent GDP = 37.5. - Multilateral creditors (2024): USD 1,724 million; percent total = 12.3; percent GDP = 12.0. - Bilateral creditors (2024): USD 2,442 million; percent total = 17.4; percent GDP = 17.1. - Commercial creditors (2024): USD 1,196 million; percent total = 8.5; percent GDP = 8.4. - Domestic (2024): USD 3,866 million; percent total = 61.8; percent GDP = 60.6. - T-Bills and Bonds (2024): USD 426 million; percent total = 30.4; percent GDP = 29.8. - Memo: Nominal GDP (2024): USD 14,774 million (table). ### External Debt Sustainability: baseline projections (2022–35, selected series) - External debt (nominal, percent of GDP): 2022 = 43.1; 2023 = 39.4; 2024 = 37.5; 2025 = 38.5; 2026 = 36.3; 2027 = 33.5; 2028 = 30.3; 2029 = 27.7; 2030 = 25.6; 2031 = 23.9; 2032 = 22.4; 2033 = 21.7; 2034 = 21.0; 2035 = 20.3. - Change in external debt (percent of GDP): 2022 = -12.7; 2023 = -3.7; 2024 = -1.9; 2025 = 1.0; 2026 = -2.2; 2027 = -2.8; 2028 = -3.1; 2029 = -2.6; 2030 = -2.1; 2031 = -1.8; 2032 = -1.4; 2033 = -0.7; 2034 = -0.7; 2035 = -0.7. - Identified net debt-creating flows: 2022 = -10.4; 2023 = -0.4; 2024 = -3.5; 2025 = -0.2; 2026 = -0.1; 2027 = -0.8; 2028 = -0.6; 2029 = -1.1; 2030 = -1.2; 2031 = -0.5; 2032 = -0.4; 2033 = 0.5; 2034 = 1.1; 2035 = 1.3. - Non-interest current account deficit: 2022 = -18.3; 2023 = 3.3; 2024 = 1.9; 2025 = 5.3; 2026 = 5.9; 2027 = 5.0; 2028 = 5.1; 2029 = 4.8; 2030 = 4.5; 2031 = 3.8; 2032 = 3.8; 2033 = 4.1; 2034 = 4.3; 2035 = 4.5. - Exports (percent of GDP): 2022 = 69.7; 2023 = 56.3; 2024 = 54.2; 2025 = 46.0; 2026 = 40.1; 2027 = 38.7; 2028 = 37.2; 2029 = 35.6; 2030 = 34.1; 2031 = 32.7; 2032 = 31.5; 2033 = 30.1; 2034 = 28.7; 2035 = 26.8. - Imports (percent of GDP): 2022 = 41.9; 2023 = 51.7; 2024 = 47.1; 2025 = 43.6; 2026 = 40.1; 2027 = 38.2; 2028 = 36.8; 2029 = 34.9; 2030 = 33.5; 2031 = 31.3; 2032 = 30.2; 2033 = 29.3; 2034 = 28.4; 2035 = 27.2. - Endogenous debt dynamics contribution (percent): 2022 = -1.1; 2023 = 1.0; 2024 = -0.5; 2025 = -0.4; 2026 = 0.2; 2027 = -0.2; 2028 = -0.3; 2029 = -0.3; 2030 = -0.3; 2031 = -0.4; 2032 = -0.4; 2033 = -0.4; 2034 = -0.4; 2035 = -0.3. ### External debt sustainability indicators (baseline) - PV of PPG external debt-to-GDP ratio (selected years): 2025 = 32.4; 2026 = 29.3; 2027 = 26.8; 2028 = 24.0; 2029 = 21.8; 2030 = 20.0; 2031 = 18.4; 2032 = 17.2; 2033 = 16.8; 2034 = 16.3; 2035 = 15.8. - PV of PPG external debt-to-exports ratio (selected years): 2025 = 52.4; 2026 = 70.4; 2027 = 73.1; 2028 = 69.4; 2029 = 64.6; 2030 = 61.1; 2031 = 58.5; 2032 = 56.4; 2033 = 54.8; 2034 = 55.8; 2035 = 56.8. - PPG debt service-to-exports ratio (selected years): 2025 = 15.4; 2026 = 15.4; 2027 = 10.9; 2028 = 7.2; 2029 = 9.9; 2030 = 9.1; 2031 = 10.6; 2032 = 9.4; 2033 = 8.7; 2034 = 8.0; 2035 = 7.4. - PPG debt service-to-revenue ratio (selected years): 2025 = 34.5; 2026 = 33.9; 2027 = 23.9; 2028 = 14.0; 2029 = 16.4; 2030 = 14.5; 2031 = 16.4; 2032 = 14.1; 2033 = 12.6; 2034 = 11.3; 2035 = 10.1. - Gross external financing need (Million of U.S. dollars): 2025 = 322.6; 2026 = 550.0; 2027 = 612.7; 2028 = 506.1; 2029 = 688.3; 2030 = 526.2; 2031 = 441.1; 2032 = 571.3; 2033 = 548.3; 2034 = 581.1; 2035 = 780.1 (table entries preserved). ### Key macroeconomic assumptions (selected) - Real GDP growth (percent): 2022 = 1.8; 2023 = 2.0; 2024 = 2.1; 2025 = 2.4; 2026 = 2.8; 2027 = 3.3; 2028 = 3.7; 2029 = 3.7; 2030 = 3.6; 2031 = 3.3; 2032 = 3.6; 2033 = 4.0; 2034 = 3.7; 2035 = 3.4 (as reported). - Effective interest rate (percent): 2022 = 2.3; 2023 = 3.8; 2024 = 3.0; 2025 = 1.3; 2026 = 3.3; 2027 = 2.8; 2028 = 2.7; 2029 = 2.5; 2030 = 2.3; 2031 = 2.1; 2032 = 2.0; 2033 = 1.8; 2034 = 1.9; 2035 = 2.0. - Growth of exports of G&S (US dollar terms, percent): 2022 = 25.6; 2023 = -18.1; 2024 = 0.4; 2025 = -10.5; 2026 = -7.1; 2027 = 2.4; 2028 = 2.7; 2029 = 2.2; 2030 = 2.0; 2031 = 2.4; 2032 = 2.6; 2033 = 2.0; 2034 = 2.1; 2035 = 0.0. - Government revenues (excluding grants, percent of GDP): 2022 = 31.2; 2023 = 25.6; 2024 = 24.8; 2025 = 23.9; 2026 = 24.2; 2027 = 25.1; 2028 = 24.9; 2029 = 24.6; 2030 = 24.3; 2031 = 23.6; 2032 = 23.6; 2033 = 23.5; 2034 = 23.2; 2035 = 23.1. - Nominal GDP (Million of US dollars, selected years): 2022 = 13,967; 2023 = 14,169; 2024 = 14,774; 2025 = 15,591; 2026 = 16,620; 2027 = 17,623; 2028 = 18,817; 2029 = 20,100; 2030 = 21,399; 2031 = 22,861; 2032 = 24,390; 2033 = 26,021; 2034 = 27,867; 2035 = 29,763. ### Public sector debt and fiscal dynamics (2022–35, selected) - Public sector debt (percent of GDP): 2022 = 93.5; 2023 = 102.9; 2024 = 98.0; 2025 = 97.3; 2026 = 94.8; 2027 = 88.5; 2028 = 81.6; 2029 = 74.8; 2030 = 68.8; 2031 = 64.8; 2032 = 44.3? (table shows series; preserve listed values). - Change in public sector debt (percent of GDP): 2022 = -4.2; 2023 = 9.4; 2024 = -4.9; 2025 = -0.7; 2026 = -2.5; 2027 = -6.3; 2028 = -7.0; 2029 = -6.8; 2030 = -6.0; 2031 = -3.7. - Primary deficit (percent of GDP): 2022 = -11.6; 2023 = -9.0; 2024 = -8.3; 2025 = -3.9; 2026 = -4.1; 2027 = -6.5; 2028 = -7.1; 2029 = -7.3; 2030 = -7.3; 2031 = -3.9. - Primary expenditure (percent of GDP): 2022 = 20.2; 2023 = 17.5; 2024 = 17.0; 2025 = 20.3; 2026 = 20.8; 2027 = 18.6; 2028 = 17.8; 2029 = 17.3; 2030 = 17.1; 2031 = 19.7. - PV of public debt-to-GDP ratio (selected years): 2025 = 90.4? (table series preserved; full sequence shows PV values including 89.9, 90.4, 87.9, 81.9, 75.3, 68.8, 63.1, 39.8). ### Sensitivity analysis highlights (selected breaches and thresholds) - Table 4 (PPG external debt indicators): Baseline PV of debt-to-GDP series (2025–35) includes values such as 32, 29, 27, 24, 22, 20, 18, 17, 16, 17, 16 (preserved from table columns). - Thresholds presented for debt service-to-exports, debt service-to-revenue, PV of debt-to-exports, PV of debt-to-GDP are consistently shown (e.g., thresholds reported as 30, 140, 10, 14 across tables). - Table 4 shows alternative scenarios and bound tests with many entries exceeding thresholds (bold values denote breaches in source). - Table 5 (Public debt sensitivity): Baseline PV of Debt-to-Revenue Ratio and Debt Service-to-Revenue Ratio series show high vulnerability under alternative scenarios (examples: baseline PV of Debt-to-Revenue Ratio entries include 373, 354, 327, 303, 280, 259, 241, 221, 201, 183, 169). ### Other notable dataset points preserved exactly - "14.5 percent over par with a yield to maturity of 11.6 percent and a spread of 804 bps over 7-year US treasury bond as on April 24, 2023. (Sources: Bloomberg, https://www.federalreserve.gov/releases/h15/)" - Statement by Mr. N'Sonde, Executive Director for Republic of the Congo and Ms. Kwizera, Advisor to Executive Director — March 11, 2026 (as printed in source). *Source: 1cogea2026001-source-pdf (IMF staff tables and text as provided in the supplied content).* ### Introduction ### Introduction ### Acknowledgment and overall assessment - On behalf of the Congolese authorities, thanks to IMF staff for constructive engagement during the Post-Financing Assessment discussions. - Authorities value continued dialogue on appropriate policy reforms in an environment marked by tight financing conditions, heightened global uncertainty, and strong interlinkages between fiscal, financial, and regional dynamics. - Authorities share staff’s overall assessment of recent macroeconomic developments and downside risks, recognize the fragile outlook of Congo’s economy, and reaffirm determination to preserve gains achieved under the previous Fund-supported program and strengthen resilience. - Authorities appreciate IMF staff’s policy and reform recommendations and look forward to continued engagement. ### Recent developments and outlook - Economic growth constrained by low investment execution and disruptions in energy supply. - Authorities more optimistic about the medium-term outlook, supported by efforts to strengthen the non-hydrocarbon sector, improve capital budget execution, and ease infrastructure bottlenecks, particularly in the energy sector. - Inflation developments remain under close monitoring; price pressures have shown volatility. - Authorities committed to maintaining prudent macroeconomic policies and to working closely with the regional central bank BEAC to support price stability. - Authorities addressing supply-side constraints and cost pressures in a challenging global environment. - External vulnerabilities noted: sensitivity to commodity price fluctuations and shifts in global financing conditions; these reinforce the resolve to accelerate diversification, strengthen domestic revenue sources, and balance domestic and external borrowing while enhancing debt management capacity. ### Implementing corrective measures and strengthening fiscal consolidation - Fiscal pressures intensified in 2025, driven by acute liquidity constraints, security challenges, and long‑standing challenges in cash and expenditure management. - Authorities prioritizing fiscal consolidation through targeted spending cuts and revenue‑enhancing measures to improve public finances, reduce borrowing costs, and restore investor confidence. - Policy discipline, including through the 2026 fiscal framework, required for gradual reductions in the debt‑to‑GDP ratio. - Reforms under the Domestic Revenue Mobilization Modernization Initiative advancing steadily, emphasizing broadening the tax base and improving compliance. - Rollout of the Integrated Tax and Customs Information System enhancing data interconnection across administrations. - Digitalization of revenue payments through the “FOUTA” platform reducing reliance on cash transactions and strengthening transparency and collection efficiency. - Accelerating full operationalization of program‑based budgeting and the Treasury Single Account to strengthen public financial management and prioritize growth‑enhancing investment. - Authorities note staff’s more conservative baseline assumptions and reaffirm commitment to safeguarding fiscal credibility and enhancing investor confidence. ### Enhancing the operational debt framework - Medium‑Term Debt Management Strategy to remain the central policy anchor guiding borrowing decisions with a disciplined mix of domestic and external financing. - Authorities view renewed market access as indication of improved market confidence but focus on managing debt-related risks, prioritizing concessional resources, extending maturities, and limiting refinancing pressures. - Debt vulnerabilities recognized as elevated; authorities strengthening operational and institutional foundations of debt management. - Governance structures and procedures at the debt management office—Caisse Congolaise d’Amortissement (CCA)—being reinforced through tighter internal controls, enhanced risk analysis, and improved inter‑agency coordination. - Debt Transparency and Reporting Enhancement Initiative addressing debt transparency and risk management, including regular publication of monthly, quarterly, and annual debt reports. - Comprehensive Public Sector Debt Coverage Program expanding coverage to capture contingent liabilities, notably from public enterprises. - Capacity constraints addressed through targeted recruitment, specialized training, and establishment of dedicated debt and risk committees to systematically monitor risks and close implementation gaps. - Addressing state‑owned enterprise (SOE) risks as a priority via a comprehensive SOE Governance Reform Program anchored in two pillars: - Pillar 1: Strengthening legislative and regulatory framework through the State Shareholder Policy Implementation Framework, including a draft decree to clarify subsidy rules and enhance fiscal oversight. - Pillar 2: Financial recovery and restructuring, with targeted recapitalization and restructuring measures, notably in Congo Telecom. - Complementary sectoral reforms progressing through the Urban Public Transport Sector Initiative, the Insurance Sector Recovery and Stabilization Program, and the Energy Sector Cost Rationalization and Subsidy Containment Initiative, aimed at reducing gas costs, improving supply‑chain efficiency, and strengthening operations at Centrale Électrique du Congo. ### Pursuing financial sector reforms - In a challenging regional financial environment, authorities taking steps to contain emerging financial sector risks. - Liquidity pressures and sovereign‑bank linkages remain a source of vulnerability. - Recent efforts focused on strengthening liquidity management frameworks, improving predictability of domestic financing operations, and enhancing cash‑flow planning. - Going forward, reforms will focus on strengthening supervision under the regional supervisory body COBAC and improving access to finance to support growth and inclusion. - Priority given to strengthening financial sector statistics in close coordination with regional partners, notably COBAC and BEAC, to improve quality, coverage, and timeliness of financial sector data and deepen forward‑looking risk analysis within existing supervisory arrangements. ### Structural transformation, social safety nets, governance reforms, and climate agenda - Accelerating reforms to reduce dependence on hydrocarbons and broaden the growth base centered on improving the business environment, strengthening capital budget execution, and easing critical infrastructure bottlenecks, particularly in the energy sector. - Despite tight fiscal conditions, measures advanced to better protect vulnerable groups during adjustment. - Progress in improving targeting and execution of social spending, including gradual rollout of social safety net mechanisms. - Authorities intend to address remaining implementation bottlenecks and strengthen coordination with partners to ensure limited resources are used effectively to safeguard human capital and essential social services. - Governance reforms advancing, though institutional and capacity limitations continue to pose challenges; steps taken to strengthen public financial management, transparency, and oversight frameworks. - Authorities focused on consolidating gains by prioritizing implementation, leveraging technical assistance, and working with development partners to address gaps and reinforce institutional credibility. - Climate considerations increasingly embedded in policy framework; Republic of Congo views climate action as both environmental responsibility and macro‑critical priority. - Authorities have requested IMF technical assistance to conduct a diagnostic assessment of mitigation and adaptation policies and to strengthen climate‑related fiscal frameworks to better integrate climate risks into macro‑fiscal planning. ### Conclusion - Authorities committed to sustained and disciplined reform implementation while adjusting policy response as the situation evolves. - Authorities concur with IMF staff’s assessment that the country’s capacity to repay the Fund remains adequate, underpinned by commitment to corrective measures promoting fiscal sustainability and Congo’s strong and consistent track record of meeting financial obligations to the IMF. - Authorities value the Fund’s continued engagement and policy advice and look forward to continued strong engagement. *Introduction — 1cogea2026001-source-pdf* --- _Source: https://www.imf.org/-/media/files/publications/cr/2026/english/1cogea2026001-source-pdf.pdf_