Numbers & Statistics

IMF Executive Board Concludes 2019 Article IV Consultation with the Republic of Congo

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Via IMF (Den Internationale Valutafond)

On January 17, 2020, the Executive Board of the
International Monetary Fund (IMF) concluded the Article IV consultation

the Republic of Congo.

The economic situation remains difficult but there are some signs of
stability. Non-oil growth could turn positive for the first time since
2015 due to the recovery in the agricultural, forestry and
transportation sectors. However, many economic sectors are still in
recession due to delays in the implementation of the government
strategy to clear arrears and tight financing conditions. The expansion
in oil production in 2019 will be less pronounced than initially
anticipated, with overall growth staying close to 2 percent.

The authorities have continued to follow prudent fiscal and debt
management policies, and the overall level of public debt is expected
to decline in 2019, after reaching a peak level of 117 percent of GDP
in 2017. However, external public debt remains in distress, and the
Congolese authorities are negotiating a debt restructuring with
external commercial creditors to restore debt sustainability. Inflation
remains at moderate levels (around 2 percent) and the current account
is likely to register a strong surplus on the back of rising oil
exports and new mining exports coming on stream. Together with a
stricter enforcement of FX regulations, this is resulting in a stronger
accumulation of net foreign assets at the Bank of Central African
States (BEAC) than initially anticipated.

Over the medium term, non-oil growth is expected to recover as the
government implements its strategy to clear domestic arrears and
introduces reforms in support of its diversification strategy.
Short-term risks are tilted to the downside given possible declines in
oil prices, and the potential difficulty of sustaining high fiscal
surpluses over time, and capacity constraints for the effective
implementation of the government’s ambitious structural reform agenda.
However, these risks are mitigated by medium-term upside risks to oil
production if recent oil discoveries are confirmed.

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Executive Board Assessment


Executive Directors noted that the Republic of Congo continues to face
very difficult economic conditions, with a challenging macroeconomic
outlook characterized by high debt levels, low growth, and limited
business confidence. At the same time, Directors welcomed modest
inflation levels, the downward trend in public debt, and rising net
foreign assets. To support macroeconomic stability and inclusive
growth, Directors encouraged the authorities to pursue continued fiscal
consolidation, debt restructuring, and reforms to strengthen governance
and diversify the economy.

Directors considered that the government should continue
strengthening its medium‑term fiscal framework.
Noting the prudent execution of last year’s budget, they welcomed
that the 2020 budget pursues further fiscal consolidation to help
restore debt sustainability. Directors emphasized the importance of
non‑oil revenue mobilization efforts as a key pillar of the fiscal
strategy, particularly measures to curb tax exemptions, collect tax
arrears, and implement additional tax administration reforms. They
also highlighted the importance of strengthening PFM systems and
ensuring that adequate resources are allocated to critical social
programs in favor of vulnerable groups, including in the areas of
health, education, and programs for women.
Directors also underscored the importance of coordinated donor
community support for the country’s adjustment efforts.

Directors agreed that public debt management should continue to be at
the center of Congo’s economic recovery plan. They supported the
authorities’ plans to accelerate negotiations with external commercial
creditors to reach a debt reduction agreement. Directors also
encouraged the authorities to implement their strategy to clear
domestic arrears with the private sector and emphasized the need to
contain rising non‑performing loans, provide enough liquidity to the
private sector to be able to meet its tax obligations, and increase
business confidence in support of economic activity, especially in the
non‑oil sector. Avoiding any new accumulation of official external
arrears and clearing the existing stock in line with their earlier
commitments were also emphasized. To capture debt vulnerabilities more
accurately, Directors called for enhanced debt transparency, including
for SOEs.

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Directors were encouraged by reforms to
improve governance and reduce corruption. They welcomed the publication
of the audited financial statements of the National Oil Company and
2020 draft budget, which improved public access to economic
information. Notwithstanding, Directors considered that further efforts
are needed and encouraged continued strengthening and
operationalization of the anti‑corruption framework and ensuring that
the new Anti‑Corruption Authority and Commission on Transparency become
fully operational.

Directors agreed that the Republic of Congo’s diversification strategy
will be key to sustain higher and more inclusive growth.
In this regard, they emphasized the importance of strengthening
governance and improving the business environment, including
through reforms to increase access to electricity, reduce
administrative requirements to start new businesses, and improving
access to credit.


Under Article IV of the IMF’s Articles of Agreement, the IMF holds
bilateral discussions with members, usually every year. A staff
team visits the country, collects economic and financial
information, and discusses with officials the country’s economic
developments and policies. On return to headquarters, the staff
prepares a report, which forms the basis for discussion by the
Executive Board.


At the conclusion of the discussion, the Managing Director, as
Chairman of the Board, summarizes the views of Executive Directors,
and this summary is transmitted to the country’s authorities. An
explanation of any qualifiers used in summings up can be found


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