IMF Executive Board Completes Fourth Review Under the Republic of Congo’s ECF Arrangement and Approves US$1.9 Million DisbursementPress Release No. 11/13
January 19, 2011
The Executive Board of the International Monetary Fund (IMF) today completed the fourth review of the Republic of Congo’s economic performance under a program supported by the Extended Credit Facility (ECF). The Board’s decision enables the immediate disbursement of an amount of SDR 1.2 million (about US$1.9 million), bringing total disbursements under the ECF to the Republic of Congo to SDR 6.0 million (about US$9.4 million).
At the conclusion of the Executive Board's discussion on the Republic of Congo, Mr. Naoyuki Shinohara, Deputy Managing Director and Acting Chair, stated:
“Congo has weathered the global downturn well, supported by prudent macroeconomic policies under the ECF arrangement with the Fund. Economic activity has remained robust, buoyed by rising oil production and sustained non-oil growth in construction, telecoms, and transport. Inflation has declined to low single digits. The external position has improved significantly, as fiscal surpluses have raised official foreign assets and HIPC debt relief significantly reduced external liabilities. The outlook is favorable provided that non-oil sector activity accelerates on the back of improvements in basic infrastructure and the business climate.
“Significant fiscal consolidation has provided space for much needed infrastructure spending. Given the risks of mounting current spending pressures, an appropriate balance should be struck between scaling up public expenditure and macroeconomic stability. Over the medium term, fiscal sustainability requires continued consolidation efforts, including implementation of measures to collect additional non-oil revenue, reining in non-priority spending, enforcing quality control to improve expenditure efficiency, and further strengthening oil wealth management.
“Good progress has been made on structural reforms in the areas of public financial management and the management of oil wealth. The reform agenda should now focus on addressing weaknesses in budgetary control and treasury operations. The authorities’ plans to safeguard public investment quality by fully implementing the mechanisms elaborated in the context of the HIPC process are welcome. In particular, measures aimed at improving the project appraisal process, reinforcing budget execution, monitoring, and control, and increasing coordination among public agencies, are all important steps in the right direction.
“To support non-oil growth and to durably reduce poverty, further efforts are needed to increase private sector participation, enhance the financial performance of state-owned enterprises, and deepen financial intermediation. As a complement to scaling up public investment, it will be important to swiftly implement key measures of the recently-adopted Action Plan to improve the business climate in close collaboration with development partners,” Mr. Shinohara added.