Press release no. 22/123

IMF staff reach staff-level agreement on the first review of the Republic of Congo’s Extended Credit Facility

Apr 20, 2022

Press releases at the end of the mission include statements from IMF staff teams reporting their preliminary findings after visiting a country. The views expressed in this statement are those of IMF staff and do not necessarily reflect those of the IMF Executive Board. Based on the preliminary findings of this mission, IMF staff will prepare a report that will be submitted to the Board of Directors for discussion and decision, subject to management approval.

Washington, D.C.: An International Monetary Fund (IMF) team led by Pritha Mitra, Head of Mission for the Republic of the Congo, conducted a virtual mission with the Congolese authorities from March 31 to April 18, 2022 to conduct the first review of the Republic’s three-year agreement. Congo under the Extended Credit Facility Agreement.

At the end of the mission, Ms Mitra made the following statement:

“The IMF team has reached a staff-level agreement with the authorities of the Republic of Congo on the completion of the first assessment under the Extended Credit Facility (ECF), which will be approved by the IMF’s board of directors.

“The economic recovery is gaining momentum but remains fragile amid the COVID-19 pandemic and the global impact of the war in Ukraine. Real GDP growth is expected to accelerate to 4.3% in 2022, driven by improved oil production, dynamism in the agricultural and mining sectors, continued vaccination activities and payment of domestic arrears, which have contributed to the reduction of unsecured loans, stability of the productive and financial sector. if they persist, the economy will benefit, but there are significant uncertainties surrounding oil price projections.

“Debt is considered sustainable after bold debt restructuring operations and the implementation of prudent fiscal policies. Nevertheless, debt vulnerabilities remain significant, especially in a context of high debt price volatility. Pending clearing of some external arrears, debt is classified as “distressed” management of public procurement, debt and public finances, including investment, will be essential to avoid the accumulation of new domestic and external payment arrears and to improve the efficiency and quality of public spending. to consolidate recent progress in governance and transparency.

Fiscal policy will need to maintain a delicate balance between supporting a robust economic recovery and securing debt sustainability. Progressive fiscal consolidation while increasing spending on social assistance, health care, education and infrastructure. This prioritization of spending will become stronger. , promote more inclusive and resilient In this perspective, the ongoing reforms of the administration need to be complemented by an intensification of the collection of back taxes, a significant elimination of tax and customs exemptions and concrete measures to increase oil-related tax revenues and non-oil GDP.

“In this context, after debt service financing, a portion of the surplus generated by exceptional oil revenues should fund the tax deferral initiated during the pandemic and strengthen social assistance to support low- and middle-income businesses and households, respectively. to help cope with high inflation Accelerated measures to facilitate access to credit for small businesses will complement these measures.By 2022, the remaining surplus of unforeseen oil revenues must be preserved to form buffers against future shocks. % of non-oil GDP per year should be allocated to essential social spending, including infrastructure, and payment of domestic arrears, while the rest is saved.

“Performance in the implementation of the program has been good. All quantitative performance criteria for the end of February 2022 have been met. The structural benchmark for the end of March 2022 related to the medium-term strategy of the new (CFP) and the associated action plan were also structural benchmark was not respected, but its key elements were nevertheless implemented on time.The new anti-corruption law – corruption was indeed passed by parliament in February and promulgated in March Technical assistance from the IMF.

“The support of development partners will be crucial for the successful implementation of the authorities’ economic and structural reform strategy.

“The mission met the Minister of Finance, Budget and Public Portfolio, Mr. Rigobert Roger Andely, and other senior government officials. The IMF mission also met with representatives of civil society, the private sector and development partners.

“The IMF team thanks the authorities for their excellent cooperation and constructive discussions.”

IMF Communications Department


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