Press Release No. 15/250

Press Release: IMF Staff completes the 2015 Article IV Mission to Democratic Republic of the Congo

June 3, 2015

A staff team from the International Monetary Fund (IMF) led by Norbert Toé visited Kinshasa from May 20 to June 3 to conduct discussions on the 2015 Article IV consultation with the Democratic Republic of the Congo (DRC). The discussions covered economic and financial developments in 2014 and 2015 and the policies needed to preserve macroeconomic stability, build resilience, and foster inclusive growth as well as financial stability and inclusion.

At the end of the visit, Mr. Toé issued the following statement, outlining the preliminary conclusions of the mission:

“The DRC continues to enjoy one of the highest gross domestic product growth rates in the world. The economy is estimated to have expanded by 9.2 percent in 2014 and is expected to grow by 9.2 percent in 2015. Macroeconomic stability was preserved thanks to the authorities’ steadfast commitment to a tight fiscal policy stance. Mining production, notably copper and gold, continued to be the main driver of growth. Inflation remained at a record low and well below the authorities’ medium-term objective of close to 3.5 percent. The medium-term economic outlook continues to be promising with low inflation and high economic growth driven by buoyant mining sector activity and a growing services sector.

“The team and the government agreed that the main challenges going forward pertain to addressing the growing pressures on the limited budget resources in 2015–16 given the need to finance the elections; increasing the policy space to protect the economy from possible shocks from both external and domestic sources; removing bottlenecks to private sector activity; and exploiting the vast natural resources more efficiently to improve the living standards of the broader population. In particular, after last year’s drop in commodity prices and delays in key structural reforms, it is of paramount importance to preserve the hard earned macroeconomic stability and build on it to foster inclusive growth and promote financial stability and inclusion. The mission is concerned about the wait-and-see attitude of the private sector in the run up to the elections.

“The mission recommended to strictly adhere to the fiscal anchor of no financing of fiscal deficits by the central bank over the medium term and underscored the need to tap DRC’s large tax potential to mobilize more domestic revenues. This would allow an increase in public spending on priority sectors, in particular education, health, and basic infrastructure while contributing to the financing of the elections in 2015–16. It encouraged the authorities to implement without delays the reforms of the tax administration that are needed to attain such an increase in revenues, including improvements in tax collection, better control of the value-added tax, and strengthening the customs administration.

“The mission urged the authorities to recapitalize the central bank and to expedite the adoption of the legal framework to make it autonomous, accountable, and credible. The mission encouraged the central bank to intervene actively in the exchange market to build up reserves. The mission also discussed measures to promote financial inclusion and to enhance financial stability.

“The mission recommended expediting the implementation of key legislation and structural reforms to improve the business climate. The team commended the authorities for the approval of the insurance code.

“Given the possible impacts of its policy recommendations, the mission recommended that safety nets to protect the most vulnerable segments of the population be put in place and social spending on the priority areas be increased significantly going forward.

“The IMF will continue to assist the authorities in the implementation of their economic reforms through capacity building and policy advice.

“The mission thanks the DRC authorities for the fruitful discussions and their hospitality.

“The IMF Executive Board is expected to complete the 2015 Article IV consultation in
July 2015.”