Washington DC: An International Monetary Fund (IMF) team, led by Roland Kpodar, held virtual meetings during May 2-16, 2024, to conduct the 2024 Article IV consultations and discussions on the fifth review of Congo’s three-year program under the Extended Credit Facility (ECF) approved by the IMF Executive Board on January 21, 2022.
At the end of the mission, Mr. Kpodar issued the following statement:
“I am pleased to announce that the Congolese authorities and the IMF team have reached a staff-level agreement on the fifth review of the Republic of Congo’s program under the Extended Credit Facility arrangement. This staff-level agreement is subject to continued implementation of agreed policy actions, and IMF Management and Executive Board approval. Upon completion of the Executive Board review, the Republic of Congo would have access to SDR 32.4 million (about US$ 43 million).
“Congo’s economic recovery softened in 2023 to reach 2 percent, mainly reflecting an unexpected downturn in oil production, heavy floods, power outages, and weaker public investment. Growth is expected to strengthen to 2.8 percent in 2024, and sustain the momentum in the medium term, primarily driven by the non-oil sector as hydrocarbon production stagnates. Inflation, which averaged 4.3 percent in 2023 due to elevated import prices and higher fuel prices, is expected to gradually decline towards the regional target of 3 percent in the medium term.
“Performance under the IMF-supported program has been broadly satisfactory, with most quantitative and indicative targets met. The fiscal position improved in 2023, mirroring under-execution of public spending and savings from the fuel subsidy reform. Nevertheless, challenges remain on the debt management front, the execution of social expenditure, and the implementation of the structural reform agenda. Despite significant progress achieved, delays persist in the reorganization of the debt management office, the enactment of hydrocarbon-related VAT laws, and the operationalization of conflict-of-interest legislation. The IMF team welcomed the authorities’ renewed commitment to step up efforts to safeguard fiscal and debt sustainability, bolster social spending, strengthen governance and debt management, while laying the foundations for a stronger and more inclusive growth.
“The Article IV consultation focused on safeguarding fiscal sustainability and unleashing the potential for a strong, resilient, and inclusive growth, which rests on steady progress on structural reforms. Policy priorities include improving public finance management, boosting domestic revenue, rationalizing energy subsidies, strengthening governance and transparency, enhancing the business environment, promoting financial inclusion, accelerating economic diversification, prioritizing social spending, and addressing Congo’s climate adaptation and mitigation needs.
“The IMF team would like to thank the authorities for the productive collaboration and candid policy dialogue.”
