International Monetary Fund (IMF) Staff Concludes Mission to the Republic of Congo for the Third Review of the Extended Credit Facility Arrangement
High global oil prices helped the country’s current account, but higher refined fuel import costs were subsidized by the government, thus widening the 2022 non-oil fiscal deficit
Post-pandemic recovery gained traction in 2022 with economic growth estimated at 1.7 percent, driven mainly by the non-oil sector
An International Monetary Fund (IMF) mission led by Roland Kpodar visited Brazzaville from May 8 to May 19 to hold discussions under the third review of the authorities’ program supported by the IMF Extended Credit Facility (ECF) approved in January, 2022 (see PR 22/11). At the end of the mission, Mr. Kpodar issued the following statement:
“The IMF team welcomes the authorities’ renewed commitment to implement policies needed to safeguard macroeconomic stability, promote inclusive and sustainable growth, and lock in recent gains in reducing debt vulnerabilities.
“Post-pandemic recovery gained traction in 2022 with economic growth estimated at 1.7 percent, driven mainly by the non-oil sector. Consumption and investment were spurred by government spending and increased activity in agriculture, manufacturing, and services. On the other hand, oil production contracted due to equipment issues in some large fields. High food inflation remained owing to increased import costs. High global oil prices helped the country’s current account, but higher refined fuel import costs were subsidized by the government, thus widening the 2022 non-oil fiscal deficit.
“Good progress was made during the mission on discussions on policy measures to address past fiscal slippages and advance key structural reforms. Priorities include creating fiscal space through: (i) boosting domestic revenue mobilization by streamlining tax exemptions, in particular in the energy sector; (ii) rationalizing fuel subsidies, while strengthening mitigating measures to help the most vulnerable; and (iii) prioritizing broader social and critical development spending. While progress has been made on the governance and anti-corruption agenda, continued efforts to support implementation is needed for an effective anti-corruption framework. The timely and decisive implementation of these policies and reforms are critical for the Republic of Congo to successfully consolidate its fiscal position, redirect spending to social needs and critical infrastructure, maintain public debt at sustainable levels, and provide a sound basis for a stronger and more diversified economy.
“The team is grateful to the authorities for the open and constructive discussions. Virtual discussions will continue over the coming days to finalize the implementation details of these policies for reaching a staff-level agreement. The completion of the review would be subject to approval of the IMF Executive Board.”
Distributed by APO Group on behalf of International Monetary Fund (IMF).