Press Release No. 24/416

IMF Reaches Staff-Level Agreement with the Democratic Republic of Congo on An Extended Credit Facility and A Resilience and Sustainability Facility

November 13, 2024

• Democratic Republic of Congo (DRC) authorities and the IMF reached a staff-level agreement on a new economic and financial arrangement supported by the Extended Credit Facility (ECF) and a new climate-focused arrangement supported by the Resilience and Sustainability Facility (RSF).
• The ECF-supported program aims to foster strong and inclusive growth, accelerate economic diversification, stimulate job creation, enhance living standards, advance governance and transparency, and alleviate poverty, through ramped up high-quality investment in priority infrastructure and social sectors.
• The RSF-supported program aims to help DRC realize its strategic vision as a “solution country” in the transition towards a low-carbon global economy, while strengthening its resilience to climate shocks.

Washington, DC: A staff team from the International Monetary Fund (IMF), led by Calixte Ahokpossi, IMF Mission Chief for the DRC, visited Kinshasa during October 31–November 13, to hold discussions on a new economic and financial arrangement supported by the IMF under the ECF, and a new climate-focused arrangement supported by the IMF under the RSF.

At the end of the discussions, Mr. Ahokpossi issued the following statement:

“The DRC authorities and the IMF team have reached a staff-level agreement on a new 3-year economic and financial program supported by the IMF under the ECF, for an amount of about US$ 1.77 billion, and a new 3-year climate-focused program supported by the IMF under the RSF, for an amount of about US$ 1.1 billion, subject to approval by IMF management and Executive Board. Consideration by the IMF Executive Board is tentatively scheduled for mid-January 2025.

“The programs will be anchored on the DRC Government’s Action Program (2024-28). Key pillars include fostering strong and inclusive growth by restoring peace and security, tackling the cost of living, investing in infrastructure and priority social and agricultural sectors to accelerate economic diversification and stimulate job creation, and by strengthening resilience to climate change.

“Despite the challenges stemming from the protracted war in the Eastern region of the country, as well as from the health situation triggered by the Mpox epidemic, economic growth is expected to remain resilient above 5.0 percent throughout the program period. This resilience, supported by a renewed commitment to fiscal prudence, along with enhanced coordination between fiscal and monetary authorities, and continued accumulation of international reserves toward recommended adequacy levels, is expected to help ease inflationary pressures, lowering the rising cost of living and bringing inflation back to the Central Bank’s target of 7 percent by 2026.

“A key priority under the planned ECF-supported program is to ensure stricter adherence to the public expenditure chain procedures. Related reform priorities include operationalizing the Treasury (DGTCP) and the Treasury Single Account, gradually decentralizing spending authorization to line ministries, and laying the groundwork for moving towards a resource-based fiscal framework to help insulate public spending from the volatility of extractive sector revenues. This renewed fiscal prudence also requires increased domestic revenue mobilization, including by mainstreaming the standardized VAT billing system, streamlining inefficient tax exemptions, curbing tax evasion through strengthened oversight of mineral exports, further combatting customs fraud at the borders.

“The expected expansion of fiscal space from the implementation of these policies should enable the DRC to address priority spending needs, including on security, humanitarian assistance, education, health, justice, and investment in infrastructure and agriculture.

“The DRC is uniquely positioned to play a pivotal role in the global low-carbon transition, thanks to its extensive forest and water resources, along with its green mineral reserves. To achieve its strategic vision of becoming a global ‘climate solution country, it is essential for the Government to accelerate efforts towards more effectively protecting forests, building resilience to climate-induced natural disasters, and integrating climate considerations into public investment management.

“Finally, the IMF staff urged the authorities to intensify their efforts on reforms geared towards improving governance and transparency—including in the extractive sector—, combating corruption, and improving the business environment. Steadfast progress on these fronts, including through enhanced reliance on digitalization in public service delivery, is critical for unleashing the country’s potential for a strong, diversified, inclusive and sustainable, private sector-led, economic growth.

“The IMF staff would like to express its gratitude to the authorities, senior officials, technical staff, various stakeholders, including representatives of civil society, trade unions and the private sector, and development partners, for their hospitality, continued support and constructive discussions.”