## IMF Survey: Democratic Republic of the Congo Gets $551 Million IMF Loan

_IMF News, December 11, 2009_

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## Bibliographic details
- Authors: Brian Ames
- Published: December 11, 2009

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### Overview
- On December 11, 2009, the IMF approved a loan of $551 million to the Democratic Republic of the Congo under the IMF’s Poverty Reduction and Growth Facility to support a three-year program.
- The IMF also provided $73 million in additional interim assistance under the enhanced Heavily Indebted Poor Countries (HIPC) Initiative.

### Economic context and challenges
- Country status: post-conflict and debt-distressed following a decade-long conflict; transition to a democratically elected government and implementation of prudent economic policies since 2001 aided recovery and tamed hyperinflation.
- Remaining challenges: per capita income and human development indicators among the lowest in Africa; insufficient domestic revenue mobilization; high external debt burden; unsettled security situation in the eastern provinces; dilapidated physical infrastructure.
- Global conditions: onset of the global financial crisis slowed economic activity and aggravated vulnerabilities.

### Program objectives and macroeconomic targets
- Program horizon: three-year program.
- Growth target: average real GDP growth of 6.5 percent.
- Inflation target: end-period inflation rate of 9 percent by 2012.
- Reserves target: gross reserves equivalent to 10 weeks of nonaid imports in 2012.
- External balance target: external current account deficit, including grants, limited to 25 percent of GDP on average.

### Policy measures and structural reforms
- Enhancing economic growth:
  - Reform public enterprises that provide growth-critical services.
  - Streamline the regulatory environment to improve the business and investment climate.
  - Deepen financial intermediation, including restructuring and recapitalizing the central bank and strengthening its capacity to supervise the financial sector.
- Domestic revenue mobilization:
  - Increase the revenue-to-GDP ratio from about 16 percent in 2009 to about 20 percent in 2012.
  - Strengthen customs and tax administration, streamline and simplify the tax system, and introduce a value added tax.
- Public expenditure management:
  - Bolster budget planning and execution.
  - Reinforce budget controls and improve transparency of government operations.
  - Allocate more resources to priority spending.

### External debt outlook and debt relief
- Stock of public and publicly guaranteed external debt: estimated at $13 billion at end-2008.
- Present value ratios: estimated at 93 percent of GDP, 150 percent of exports, and 501 percent of government revenue excluding grants.
- Enhanced HIPC Initiative: by reaching the completion point the country could benefit from debt relief of roughly $9 billion.
- Post-relief vulnerability: external debt outlook will remain vulnerable to adverse exogenous shocks even after debt relief; essential to rely on grants and highly concessional loans for development financing.

### Expected support and risks
- Donor expectations: development partners expected to step up budget assistance in support of the authorities’ reform agenda.
- Financing strategy: reliance on grants and highly concessional loans emphasized to maintain sustainability.
- Risks: unsettled security in eastern provinces, insufficient revenue mobilization, high external debt burden, and external shocks that could derail progress.

### Key statistics and targets
- IMF loan amount: $551 million.
- Additional interim HIPC assistance: $73 million.
- External debt stock (end-2008): $13 billion.
- Present value of external debt: 93 percent of GDP; 150 percent of exports; 501 percent of government revenue excluding grants.
- Growth target: average real GDP growth of 6.5 percent.
- Inflation target: end-period inflation rate of 9 percent by 2012.
- Reserves target: gross reserves equivalent to 10 weeks of nonaid imports in 2012.
- External current account deficit target: limited to 25 percent of GDP on average.
- Revenue-to-GDP target: from about 16 percent in 2009 to about 20 percent in 2012.
- Potential debt relief at HIPC completion point: roughly $9 billion.

*Source: IMF Survey, December 11, 2009.*

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## References

- [https://www.imf.org/en/News/country-focus](https://www.imf.org/en/News/country-focus)
- [PRESS CENTER](http://presscenter.imf.org/)
- [IMF Country Focus](https://www.imf.org/en/news/country-focus)
- [Press release](https://www.imf.org/external/np/sec/pr/2009/pr09455.htm)
- [Democratic Republic of the Congo and the IMF](https://www.imf.org/external/country/cod/index.htm)
- [Africa’s new growth engines](https://www.imf.org/external/pubs/ft/survey/so/2009/CAR112309A.htm)
- [Africa regional outlook](https://www.imf.org/external/pubs/ft/reo/2009/AFR/eng/sreo1009.htm)
- [Blog: IMF helps Africa](http://blog-imfdirect.imf.org/2009/09/10/imf-helping-africa/)
- [Poverty Reduction and Growth Facility](https://www.imf.org/external/np/exr/facts/prgf.htm)
- [Heavily Indebted Poor Countries (HIPC) Initiative](https://www.imf.org/external/np/exr/facts/hipc.htm)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2015/09/28/04/53/socar121109a_