- In 2002, economic growth in Congo Kinshasa (DRC) turned positive again after thirteen years. As the process of peace and democratic transition is under way, authorities now focus on economic reconstruction and the country already is getting international credits.
The International Monetary Fund (IMF) today published its latest review of the economic performance of Congo Kinshasa, concluding that the war-ravaged giant country finally had touched bottom. The Fund at the same time announced a new and immediate US$ 37 million disbursement for the new Kinshasa government.
IMF Director Horst Köhler in a press statement today hailed the Congolese authorities for having made "clear progress" in consolidating the peace process in a complex and difficult environment. The installation of an all-inclusive transitional government represented "a promising step in this context," Mr Köhler emphasised.
He added that stabilisation of the security situation, with the strong support of the international community that Congo Kinshasa would "continue to need," would be "key for achieving the objectives of the economic programme." The Congolese authorities' implementation of their economic program to date, under difficult circumstances, had been "broadly satisfactory."
As a result, in 2002 economic growth had turned positive again after thirteen years, inflation continued to decline, and the exchange rate had stabilised, the IMF had found in its review of the economy of the vast and war-ravaged country.
Since last year, Congo Kinshasa is receiving conditional loans from the IMF to reduce poverty by increasing economic growth and implement structural reforms such as privatisation. In its first year following the IMF's economic recipes, the Congolese government had performed surprisingly well, according to Mr Köhler's assessment.
- The progressive return to a normal budgetary cycle has led to a strengthening of the public finances, the IMF leader found. "Fiscal revenue mobilisation measures have been implemented, and the business environment is improving as a result of overall good progress in implementing structural reforms."
However, as a result of higher military and sovereignty-related expenditure and a shortfall in external project financing, the intended shift in government spending toward the social sectors and poverty reduction had not yet materialised, the IMF analysis found. "Given the fragile security situation, this will require continued strong support from the international community for maintaining peace and security," Mr Köhler said.
- The authorities are encouraged to continue to vigorously implement their poverty reduction strategy, progressively extending its reach to the entire country, he added.
Structural reforms aimed particularly at restructuring the public enterprise sector, and at reconstructing the transportation, education, and health networks, were to underpin the Congolese authorities' efforts to achieve sustainable economic growth and poverty reduction. "Improved governance and reduction of corruption will be key for economic revival," Mr Köhler added.
- In particular, the authorities need to continue to pursue fiscal consolidation, along with efforts to improve further the transparency and management of public expenditure, the IMF leader emphasised. "Ensuring cohesive policy implementation within the new all-inclusive government will be a major challenge," he added.
Mr Köhler thus announced that, although some performance criteria had been missed "by relatively small margins", the IMF's Executive Board had decided to grant an immediate US$ 37 million disbursement for the Kinshasa government. He also said that if positive developments continued at current speed, the Congo may soon receive substantial debt relief from the international financing community.
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