IMF Staff Finalizes 2017 Article IV Consultation with the Republic of Congo and Initiates Discussions on a Possible IMF-Supported Financial Arrangement
IMF News, March 9, 2017
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Bibliographic details
- Published: March 9, 2017
Mission summary and timeline
- Press Release No. 17/79; March 9, 2017.
- An IMF staff team headed by Abdoul Aziz Wane visited Brazzaville from February 20 to March 8, 2017.
- Purpose: to initiate discussions toward a possible IMF-supported financial arrangement and to finalize the 2017 Article IV consultation.
Key findings on economic conditions
- The Republic of Congo contracted sharply in 2016 due to the decline in international oil prices.
- Public debt increased to 77 percent of GDP.
- Imputed international reserves fell to 2 months of imports.
- Nonperforming loans increased as the accumulation of government arrears impaired the balance sheets of private enterprises.
- External arrears accumulated in 2016 and 2017.
- The adverse oil price shock occurred amid efforts to improve infrastructure and increase public sector wages.
Policy implications and authorities’ objectives
- Authorities aim to strengthen the Republic of Congo’s buffers, in line with the regional objective to safeguard external stability.
- This requires significant fiscal adjustment to:
- shore up investors’ confidence,
- contain public debt to sustainable levels,
- spur growth.
- Authorities plan to adjust their spending envelope by prioritizing investment projects while protecting spending for social sectors and the safety net.
- Authorities intend to boost revenue mobilization efforts to minimize spending cuts.
- The authorities noted the concentration of debt service payments in the next three years that will complicate adjustment efforts.
IMF staff response and next steps
- The IMF team welcomes the authorities’ plans to adjust their spending envelope.
- The team made significant progress in assessing policies for 2017 and the medium term, and their implications for fiscal sustainability and external stability.
- Discussions will continue in the coming weeks on a package of measures that could be supported by the IMF.
- The views expressed are those of IMF staff and do not necessarily represent the views of the IMF’s Executive Board; staff will prepare a report that, subject to management approval, will be presented to the IMF’s Executive Board for discussion and decision.
Engagement and consultations
- The IMF team was received by His Excellency Prime Minister Clément Mouamba.
- Meetings included:
- State Minister of Economy, Industrial Development, and Promotion of the Private Sector, Mr. Ondongo;
- Minister of Planning, Statistics and Integration, Ms. Ebouka-Babackas, acting Minister of Finance;
- Minister of Large Projects, Bouya;
- Minister of Health and Population, Ms. Mikolo;
- Minister of Social Affairs, Humanitarian Action and Solidarity, Dinga-Dzondo;
- Senior officials of the National Directorate of the Central Bank;
- Representatives of the private sector and development partners.
Media contact
- IMF Communications Department, Media Relations
- Press Officer: Lucie Mboto Fouda
- Phone: +1 202 623-7100
- Email: MEDIA@IMF.org
Source: IMF Press Release No. 17/79 (March 9, 2017).