IMF Staff Concludes Program Negotiation Mission to the Republic of Congo

IMF News, April 19, 2018

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Press Release No. 18/137; April 19, 2018.
An IMF mission, led by Mr. Abdoul Aziz Wane, visited Brazzaville from April 3 to April 18, 2018 to discuss the authorities’ economic and financial program and possible financial support by the IMF.
End-of-Mission press releases convey preliminary findings; the views expressed are those of IMF staff and do not necessarily represent the views of the IMF’s Executive Board.
Contact listed: IMF Communications Department, MEDIA RELATIONS, PRESS OFFICER: Ismaila Dieng, Phone: +1 202 623-7100, Email: MEDIA@IMF.org.

“Congo’s economy is suffering from the effects of low oil prices, unsustainable debt, and significant governance weaknesses.”
The nonoil economy is experiencing a “prolonged recession” that is “hurting the most vulnerable segments of the population.”
Despite “sustained fiscal adjustment since 2015, economic imbalances remain large and debt is unsustainable.”
The “debt overhang and the related accumulation of government arrears undermine investors’ confidence, financial sector stability, and social services.”
“Weaknesses in governance and anti-corruption efforts have exacerbated enforcement gaps and economic vulnerabilities.”
The proposed IMF-supported program aims to:
- “foster sustained and inclusive growth by restoring fiscal sustainability and enhancing governance.”
- “contribute to regional efforts to strengthen external stability.”

The mission emphasized the need for “bold and immediate governance reforms” to mark a break with past policies and practices.
The mission welcomes the government’s plan to:
- publish a governance study “that will guide future reforms, in the area of governance, transparency and public finances management.”
- establish an independent anti-corruption body “with full investigation powers and an asset declaration system for high-level officials.”
- reinforce oversight over large investment projects and state-owned enterprises, notably the public oil company.
The mission “welcomes the authorities’ decisions to report fully to Parliament and the population on the management of natural resources and large infrastructure investment projects over the recent past.”
The mission noted: “A strong participation of civil society will be critical for the success of the governance reforms.”

The mission “welcomes the authorities’ efforts to enhance transparency in the oil sector, with a view to increasing the share of the state in the nation’s natural resources.”
Immediate steps highlighted:
- develop capacity “to systematically reconcile all government transactions backed by natural resources.”
- approach all companies exploiting natural resources “with a time-bound request to declare any claims they may have on the government’s share in these resources.”

“Staffs understands that the authorities will continue to work in the coming weeks on implementing their comprehensive strategy to restore debt sustainability and ensure full program financing.”
Conditionality: “Once compliance with all relevant IMF policies has been established, an arrangement to support Congo’s economic program would be proposed for the IMF Executive Board's consideration.”
The proposed arrangement is intended to support policies that restore fiscal sustainability, enhance governance, and strengthen external stability.

The IMF team was received by H.E. President Denis Sassou Nguesso and by Prime Minister Clément Mouamba.
The mission met with State Minister of Economy M. Gilbert Ondongo, Finance Minister Calixte Nganongo, other senior officials, representatives of the diplomatic community, civil society, and multilateral development partners.
The team expressed thanks to the authorities for their hospitality and to colleagues of the technical committee in charge of program negotiations for their “tireless efforts and dedication during all phases of program negotiations.”

Press Release No. 18/137, April 19, 2018