Authors: Nouridine Kane Dia, Ginette Mondongou Camara, Alain Beltran Mpoue
- After a downturn in 2013, growth rebounded to 6.0% in 2014 and should reach 6.8% in 2015, but the continuing drop in oil prices could weaken the country’s economic prospects.
- The pace and quality of economic growth were not sufficient to significantly reduce poverty and enable achievement of the Millennium Development Goals.
- The country’s centralised geoeconomic structure results in weak spatial inclusion, despite advances due to recent investments in infrastructure.
Growth reached 6.0% in 2014, compared with 3.3% in 2013, driven by the rebound in oil production (60% of gross domestic product [GDP]) and the strong performances in the non-oil sector, supported by continued public investment. Inflation declined from 4.6% in 2013 to 3.0% in 2014 as a result of falling food prices; it should remain within the bounds of the regional convergence threshold of 3% in 2015-16. Reflecting the continuation of the government’s expansionary budgetary policy and the drop in oil prices, the basic non-oil primary fiscal deficit widened from 61.2% of non-oil GDP in 2013 to 74.5% in 2014, while the current account deficit of the balance of payments widened from 4.7% of GDP in 2013 to 6.3% in 2014. Growth should reach 6.8% in 2015 and 7.3% in 2016, supported by the continuation of the public investment programme, the start of mining production and the dynamism of the service and agriculture sectors. However, the current drop in oil prices could sharply weaken the country’s prospects.
The pace and quality of growth were not sufficient to significantly reduce poverty, which declined from 50.7% in 2005 to 46.5% in 2011, well above the 35% target for 2015 set in the Millennium Development Goals (MDGs). Achieving the other MDGs will be difficult, and geographic inequalities remain substantial. It is urgent to accelerate economic diversification, in particular through improvements in the efficiency of public investment and the deepening of reforms aimed at improving the private-sector environment to create rowth that will foster spatial inclusion and poverty reduction.
The country’s geoeconomic structure and the growth profile it generates have led to imbalanced regional development. The concentration of economic activities and investment in Brazzaville and Pointe-Noire has led to significant geographic imbalances, in particular between urban and rural areas. The incidence of poverty is 74.8% in rural areas, compared with 32.3% in urban areas, according to the 2011 Congolese household survey (Enquête Congolaise auprès desménages, ECOM). In order to promote spatial inclusion, the government launched an accelerated municipalisation programme ten years ago that eased the isolation of the départements and reduced regional inequalities. Within the framework of its 2012-16 national development plan (PND), the government is implementing public policies focusing on regional development and spatial planning. However, improvements in the quality and targeting of public policies on spatial planning will be necessary to achieve greater spatial inclusion.
Table 1: Macroeconomic indicators
|Real GDP growth||3.3||6||6.8||7.3|
|Real GDP per capita growth||0.8||3.5||4.4||4.9|
|Budget balance % GDP||8.3||-5.4||-7||-2.3|
|Current account balance % GDP||-4.7||-6.3||-8.2||-5.9|
Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.