Democratic Republic of Congo and IMF Mission Reach an Agreement ad-referendum on Financial Assistance Under the Rapid Credit Facility and a Staff-Monitored Program
November 15, 2019
End-of-Mission press releases include statements of IMF staff teams that convey preliminary findings after a visit to a country. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board. Based on the preliminary findings of this mission, staff will prepare a report that, subject to management approval, will be presented to the IMF’s Executive Board for discussion and decision.
- The Congolese authorities and the IMF team reached an agreement ad-referendum on a reform program that could be supported by the Rapid Credit Facility and a Staff-Monitored Program through end-May 2020.
- The Congolese economy faces multiple challenges with weakening economic growth, pervasive poverty, fragmented taxation system and fragile judiciary.
- Discussions focused on policies to strengthen macroeconomic stability, reinforce international reserves, and advance key structural reforms to address poor governance, a difficult business environment, and pervasive poverty.
An International Monetary Fund (IMF) team, headed by Mauricio Villafuerte,
visited Kinshasa, Democratic Republic of Congo (DRC), over November 6–15,
2019 and reached an agreement ad-referendum with the Congolese authorities
on a reform program that could be supported by the IMF’s Rapid Credit
coupled with a Staff-Monitored Program (SMP) through end-May 2020.
Subject to IMF management approval, the staff-level agreement on the RCF
disbursement is expected to be submitted to the IMF Executive Board for its
consideration in mid-December 2019.
At the end of the mission, Mr. Villafuerte issued the following statement:
“The Congolese authorities and the IMF mission reached an agreement
ad-referendum on policies that would strengthen macroeconomic stability,
reinforce international reserves, and advance key structural reforms to
address deep-seated issues related to poor governance, a difficult business
environment, and pervasive poverty. The SMP would provide an opportunity
for the authorities, with assistance from their partners, to develop a
deeper structural reform agenda that could eventually be implemented under
a medium-term Fund-supported program.
“The Congolese economy faces multiple challenges. GDP growth is projected
to weaken to 3.2 percent in 2020 and 4.5 percent in 2019, reflecting a
slowdown in mining production. However, non-extractive GDP continues to
accelerate, spurred in part by increased government spending. However,
poverty remains pervasive and is exacerbated by armed conflict and deadly
epidemics in some areas of the country. Weaknesses of the judiciary system
and fragmented taxation discourage private investment, holding back the
potential of an economy that enjoys several valuable natural endowments,
including a young and dynamic population.
“Fulfilling the government’s ambitious developmental and social plans in a
sustainable way requires focusing on revenue mobilization and getting
spending priorities right. The government has introduced free basic
education and undertaken infrastructure building and rehabilitation under
the President’s 100-day program. As domestic revenue is insufficient to
finance these initiatives, the central bank (BCC) has made advances to the
government, which have led to an erosion of its international reserves to
critically low levels. In this context, there is an urgent need to boost
revenue and rein in and prioritize expenditures to anchor macroeconomic
“The central bank’s immediate focus should be to build up its
international reserves, while preserving low inflation. The transfer of
its foreign currency deposits held with domestic commercial banks to
its own bank accounts abroad would contribute to increase international
reserves. To strengthen financial stability, the central bank should
take steps to denominate banks’ mandatory reserves in the currency of
the respective deposits. It should also continue to use instruments at
its disposal to maintain low inflation and to intervene in the foreign
exchange market to smooth out excess volatility.
“Improving governance and the business climate is critical, with emphasis
on the management of natural resources and of state-owned enterprises. The
authorities are committed to complying with requirements of the Extractive
Industries Transparency Initiative (EITI). Steps should be taken to
simplify taxation and reduce the tax burden. A national dialogue will be
launched, and appropriate assistance sought with a view to addressing
weaknesses in the judiciary system.
“The mission thanks the Congolese authorities for their warm hospitality,
strong cooperation, and constructive and open discussions.”
The IMF team met with Prime Minister Ilunga Ilunkamba, Minister of Finance
Sele Yalaghuli, Central Bank of Congo Governor Mutombo Mwana Nyembo, other
senior government officials as well as representatives of civil society,
private sector, and development partners.
 An SMP is an informal agreement between country authorities and
Fund staff to monitor the implementation of the authorities’
economic program. SMPs do not entail financial assistance or
endorsement by the IMF Executive Board.
IMF Communications Department
PRESS OFFICER: Meera Louis
Phone: +1 202 623-7100Email: MEDIA@IMF.org