- Despite continued insecurity in the Pool region of Congo Brazzaville, economic stability and growth are on the return. An annual economic growth of 6.0 percent is foreseen between 2004 and 2006, most of it in the non-oil sector. Transparency in the oil sector has further strengthened the confidence in the economy at large.
The International Monetary Fund (IMF) today presented a very positive report on economic trends in Congo Brazzaville. The positive assessment led the Fund to approve a three-year poverty reduction arrangement with Brazzaville authorities in an amount of US$ 84.4 million "to support the government's economic programme into 2007."
According to Acting IMF Chair Takatoshi Kato, "considerable progress has been made in consolidating political stability and improving macroeconomic conditions" since the partial end of civil strife in Congo Brazzaville in 1999. As a consequence, growth of the non-oil economy had picked up, fiscal performance had improved and inflation had abated.
The three civil wars that took place in the Congo during the 1990s destroyed much of the country's economic fabric and caused deterioration in living conditions. Peace accords were signed in 1999 and 2003. Elections at all levels of government between January and June 2002 have contributed to political stability, and the security situation has improved. The troubled Pool region, however, remains unstable.
Poverty in Congo Brazzaville remains widespread and key social and economic indicators reflect the damage inflicted by years of conflict. Per capita real GDP in 2003 was about 70 percent of its level in 1984, according to statistics presented by the IMF.
For most of the last decade, economic growth has been lower than the annual population growth of 2.7 percent. In 1997-99, economic growth was a 0.0 percent, meaning a negative per capita real GDP growth in that period. Real GDP growth was only strong in 2000 (8.2 percent) and in 2002 (5.4 percent). Last year, according to IMF and government estimates, real GDP growth was only at 0.8 percent, meaning negative growth per capita.
The negative trends are however believed to have turned, according to an analysis prepared by the IMF, leaning on data from Brazzaville authorities. Key objectives of the 2004-2007 government programme are an annual average growth rate of 5.5 percent, supported by non-oil GDP growth projected at an annual average rate of about 5.2 percent.
The IMF in its analysis even foresees an annual growth of 6.0 percent in 2004, 2005 and 2006. Of this, the non-oil sector is expected to represent a growth of 5.1 percent. Economic performance so far in 2004 "was good", the IMF said.
- In the first half of 2004, all budgetary and financial targets were met, and all structural measures were completed, although some with delays, according to the IMF study. "In addition, the authorities have taken steps to enhance the transparency of the oil sector, including publishing key oil sector information via the Internet." These advances stood in contrast to Congo's weak implementation of IMF programmes in 2003.
According to Mr Kato, Congo Brazzaville nevertheless "faces many challenges in the period ahead," including reducing poverty, indebtedness, and the economy's vulnerability to external shocks. The government's newly formulated three-year economic programme would help to "meet these challenges," the IMF official added.
The programme, to which the IMF gave its support, places priority on increasing the share of pro-poor spending in the Congolese budget. This is to be done by strengthening good governance, achieving non-inflationary pro-poor economic growth and normalising relations with external and domestic creditors.
According to Mr Kato, Congo Brazzaville could soon qualify for assistance under the enhanced Heavily Indebted Poor Countries (HIPC) Initiative "if it establishes a solid track record of policy implementation in the programme." The HIPC initiative would allow Congo to have large parts of its external debts cancelled. External indebtedness is high, and Brazzaville authorities plan to use additional oil resources to contribute to the clearance of arrears.
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