Authors

Overview

Recent Developments & Prospects

Macroeconomic Policy

Fiscal Policy

Monetary Policy

Economic Cooperation, Regional Integration & Trade

Debt Policy

Economic & Political Governance

Private Sector

Financial Sector

Public Sector Management, Institutions & Reform

Natural Resource Management & Environment

Political Context

Social Context & Human Development

Building Human Resources

Poverty Reduction, Social Protection & Labour

Gender Equality

Thematic analysis: Structural transformation and natural resources

Authors: Séraphine Wakana, Ernest Bamou

Download the full country note in PDF

  • Growth of 8.1% in 2013 should continue in 2014, driven by investment in the mining sector, improved agricultural productivity and infrastructure reconstruction.
  • Improved budget planning and a flexible monetary policy should lead to a strengthening of the economy’s foundations.
  • Despite its natural resources, the country remains one of the poorest in the world, with low participation in global value chains. Faced with a fragile social context, the economy should be contributing to human development.

The economy remained strong in 2013 with growth in gross domestic product (GDP) of 8.1% (against 7.2% in 2012), thanks to mining, trade, construction and agriculture. Growth has benefited from the improvement in some aspects of the business environment, the reconstruction of infrastructure and strong demand. Mining has been the main driver of growth, and several mining companies have passed from exploration to production since 2013.

Rationalisation of macroeconomic policy and stable commodity prices helped to contain inflation, which stood at 1.1%, against 2.7% in 2012 and a target of 4.0% in 2013. The exchange rate has depreciated slightly (0.3%). Proper co-ordination of fiscal and monetary policies and the rally in export earnings have also increased foreign exchange reserves at the central bank (BCC). These rose from 2012 to 2013, from CDF 1 213.70 million to CDF 1 766.45 million (Congolese francs), covering 9.4 weeks of imports.

Macroeconomic indicators are positive, but the social situation remains worrying. The labour market remains very small and real wages are not increasing. Rampant malnutrition is one of the leading causes of death. Many children remain outside the education system, the quality of which is also questionable. The major challenge facing the country is to ensure the economy contributes to human development.

The security situation has improved a little but some armed groups remain active in the east of the country. In November 2013, after heavy fighting during the first ten months of the year, the armed forces (FARDC) succeeded in ending the rebellion by the 23 March Movement (M23). Areas formerly controlled by the armed group are yet to be secured and their infrastructure still to be rebuilt.

Growth is expected to remain at 8.5% in 2014 and 8.6% in 2015. It will be driven by mining (copper, cobalt and gold), reconstruction of roads and energy infrastructure as well as the impact of the agricultural campaign launched in 2012. Under the pressure of overall demand, inflation is expected to increase but remain below the target of 4%. These prospects are vulnerable to the possible resurgence of conflict in the east of the country and its potential impact on public finance sustainability and the business climate. Lower growth in emerging markets could result in a fall in foreign direct investment and a decline in demand for minerals.

Table 1: Macroeconomic indicators

 20122013(e)2014(p)2015(p)
Real GDP growth7.28.18.58.6
Real GDP per capita growth4.65.666.1
CPI inflation2.71.13.23.8
Budget balance % GDP-1.7-3.7-5.9-7.2
Current account balance % GDP-6.2-9.1-10.1-10.4

Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.

Top