DRC: IMF praises ‘high growth’, warns of downside risks

DRC: IMF praises ‘high growth’, warns of downside risks

The DRC’s economic growth has increased from 1.7% in 2020 to 5.7% in 2021. The expansion was driven by mining and the revival of non-extractive activities. To improve its economic resilience, the country is implementing a program supervised by the IMF.

The International Monetary Fund (IMF) recently approved the immediate disbursement of about US$203 million to the Democratic Republic of Congo (DRC). The approval was announced, Wednesday (June 29), in a release published by the IMF.  The announcement was made by the institution on Wednesday, June 29 on its website.

The disbursement was approved after the second review of the IMF’s Extended Credit Facility (ECF) arrangement with the country. It brings the total amount disbursed to the DRC to US$ 653 million. Its purpose is to support the country’s balance of payments needs.

According to the Fund, the DRC has achieved “high growth” and has been able to contain inflation and strengthen its fiscal and external positions in 2021, thanks to the ECF  program. However, while the growth outlook remains favorable this year, “downside risks have increased from the worsened external environment,” the institution wrote.

For the IMF, fuel subsidy and civil service reforms are needed to control current expenditures and continue revenue mobilization. The authorities are also called to efficiently manage fiscal risks “to create space for priority investments.”

“Strengthening fiscal institutions and governance, including by enhancing budget credibility and cash management, is crucial to improve public financial management and avoid domestic arrears accumulation. Improving public investment management will enhance efficiency and transparency,” it adds.

Let’s note that in early May 2022, the Bretton Woods institution announced the upward revision of the DRC’s 2022 growth forecast. From 6.1%, the forecast was revised to 6.4%.