Democratic Republic of Congo: Economic outlook favorable over the medium term says IMF

Kinshasa, DR Congo (Capital Markets in Africa) — The International Monetary Fund projected the Democratic Republic of Congo’s real GDP growth rate at 9.2% in 2015, unchanged from 2014, constituting one of the highest growth rates in the world. It anticipated economic activity to be supported by mining production, especially copper and gold. It indicated that the country’s medium-term outlook continues to be promising with low inflation and high economic growth, to be supported by resilient mining sector activity and a growing services sector.

The Fund also, pointed out that the authorities face several challenges in coming years that include addressing the growing pressures on the limited budget resources during 2015-16, given the need to finance the elections. It said that other challenges consist of increasing the policy space to protect the economy from possible external and domestic shocks, and eliminating bottlenecks to private sector activity. It considered that preserving macroeconomic stability is critical in the context of low commodity prices and delays in the implementation of key structural reforms.

Furthermore, the IMF expressed concerns about the private sector’s “wait-and-see” attitude in the run up to the elections. In parallel, the IMF called on authorities to refrain from financing the fiscal deficit through the Banque Centrale du Congo (BCC) over the medium term, and encouraged them to tap the country’s large tax potential.

On a final note, tt called on the government to reform the tax administration, including improvements in tax collection, better control of the value-added tax and strengthening the customs administration. It urged authorities to recapitalize the BCC and to ratify the legal framework that makes it autonomous, accountable and credible.