IMF Team Reaches Staff-Level Agreement with the Democratic Republic of the Congo for the Sixth Review of the Extended Credit Facility and Completes Article IV Consultation Mission for 2024
the 8th of 2024
End-of-mission press releases contain statements from IMF staff teams reporting their preliminary findings after their country visit. The views expressed in this statement are those of the staff of the IMF and do not necessarily correspond to those of the Executive Board of the IMF. Based on the preliminary findings of this mission, IMF staff will prepare a report which, subject to management approval, will be presented to the Executive Board for review and decision.
- The IMF team and the authorities reached a staff-level agreement on the sixth and final review of the three-year arrangement under the Extended Credit Facility (ECF). The IMF team also completed the Article IV consultations.
- The performance of the program was generally positive, with most of the quantitative objectives having been achieved and the main reforms having been implemented, although at a slower pace.
- With the end of the current program, prudent economic policies remain recommended, in particular through good coordination of fiscal and monetary policies, supported by improved governance. The authorities have expressed interest in a new agreement and in access to the Resilience and Sustainability Facility.
At the end of the mission, Mr. Ahokpossi made the following statement:
“Real GDP growth is now estimated at 8.3% for 2023, supported by strong growth in the extractive sector. Inflation remained high, reaching 23.8% at the end of 2023, before slowly declining to 21.2% at the end of April. Due to increased election and security spending, the domestic budget deficit for 2023 exceeded forecasts and reached 1.3% of GDP, despite strong revenue performance in the last quarter. International reserves continued to strengthen, reaching $5.5 billion, or around two months of imports of goods and services at the end of 2023.
“The security situation in the East and the pre- and post-electoral period had an impact on the implementation of the program supported by the FEC. Although most of the program’s quantitative objectives were achieved, the performance criterion relating to the public deficit was not respected, mainly due to higher than expected exceptional security expenditure. The structural reform program has progressed, but at a slower pace than anticipated.
“Discussions focused on improving economic policy coordination by reducing budgetary pressures and strengthening the role of monetary policy, while setting a medium-term fiscal trajectory consistent with available financing and policy capacity. monetary policy to cope with the impacts of fiscal policy. Discussions also focused on domestic revenue mobilization, the quality and level of social spending, and the efforts needed to strengthen the external position of the economy.
“Revenue performance over the first four months of 2024 is encouraging, and security spending pressures remain high. A revised finance law for 2024 must integrate the positive impact of the amendment to the contract with the mining company SICOMINES recently signed, both in terms of revenue and investment expenditure. In addition, mechanisms will need to be put in place or strengthened to ensure the proper use and governance of these funds. The revised finance law must reflect these changes and other modifications to the budgetary framework. Revised budget commitment plans consistent with these objectives will be published.
“Strengthening public financial management remains essential to continue mobilizing revenue and improving the quality and efficiency of public spending. IMF staff welcomed recent progress in implementing fuel price subsidy reform, which should help reduce budgetary pressures and create space for social spending to protect the most vulnerable. It is essential to improve the expenditure chain, which continues to present significant gaps and major governance risks.
“While current restrictive monetary policy appears appropriate, IMF staff welcomed the central bank’s willingness to take additional action, if necessary, and emphasized that efforts to continue building international reserves while preserving the The role of the exchange rate as a shock absorber remains essential for strengthening external resilience. Discussions also focused on ongoing reforms at the central bank to improve safeguards, strengthen the monetary policy framework, improve banking supervision and support financial inclusion.
“To escape fragilities and unlock the potential for sustainable and inclusive growth, we must intensify the fight against corruption through transparency in the use of public resources, strengthening the judicial system and enforcement of the law, and improving the framework for combating money laundering and terrorist financing by progressing in the implementation of the action plan agreed with the FATF; measures must also be taken to improve the business environment. These measures are essential to support private sector development and promote diversification towards non-extractive economic sectors.
“The mission thanks the DRC authorities for their strong cooperation and constructive discussions. »
IMF Communications Department MEDIA RELATIONS
PRESS OFFICER: Nicolas Mombrial
PHONE:+1 202 623-7100COURRIEL: [email protected]