Democratic Republic of the Congo's Growth Among Highest in Region Amid Significant Challenges

IMF News, July 25, 2022

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Authors: Guillaume Nolin
Published: July 25, 2022

Growth performance

Growth sharply rebounded from 1.7% in 2020 to an estimated 6.2% in 2021.
The 6.2% growth in 2021 is well above the 4.5% rate in sub-Saharan Africa.
The strong recovery was driven by the country’s mining and services sector performance.

Macroeconomic policies and near-term outlook

Under a Fund-supported program, the authorities have adopted policies that have helped moderate inflation and stabilize the exchange rate.
Commodity prices have supported higher exports, revenues, and international reserves.
The war in Ukraine has led to an increase in inflation, raising food insecurity risks, but the outlook remains favorable with support from elevated commodity prices.

Structural challenges

Decades of war, poor governance, and underinvestment have left the country with high poverty rates, very low access to basic services and one of the largest infrastructure gaps in the world.
Reforms are needed to diversify and improve the resilience of the economy and to promote higher and more inclusive growth.

Policy recommendations and reforms

Simplify the tax system.
Broaden the tax base.
Strengthen tax administration.
Improve public financial management, including:
- Implementing a single treasury account.
- Phasing out untargeted fuel subsidies.
Continue efforts to improve governance and the business climate to support private sector development and economic diversification.

Natural resources and long-term potential

The DRC’s vast and varied mineral resources, rainforests and peatlands are key to the global energy transition.
With adequate policy frameworks and improved governance, these resources can raise growth and living standards for its population.

By Guillaume Nolin, Aminata Toure and Solo Zerbo; July 25, 2022

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