The International Monetary Fund’s (IMF) executive board has granted the Republic of Congo $87 million in budget support after conducting a second review of the nation’s progress regarding its social, economic, and political reforms under the Extended Credit Facility (ECF).
The funding is a component of a $455 million Extended Credit Facility (ECF) program approved on January 21, 2022, resulting in the disbursement of $87 million.
The three-year funding initiative aims to assist the Republic of Congo in preserving macroeconomic stability and boosting its economy amid the Covid-19 pandemic by encouraging financial aid from official sources.
In a statement on Monday, the IMF announced that the Republic of Congo had made progress in implementing structural reforms, particularly in procurement, public financial management, debt management, and conflict of interest regulations. Despite this progress, the IMF noted that four out of five performance criteria related to the fiscal position and debt had not been met to some significant extent. Still, corrective measures have been put into place to address these issues.
Economic recovery is expected to strengthen further in 2023, with improved oil production and government spending on development. Over the medium term, the role of the non-oil private sector is projected to grow along with jobs and income levels.
IMF
The fund expressed confidence that the Congolese government will steer their fiscal strategy towards addressing weaknesses while preserving debt stability.
Development spending and payment of domestic arrears will be accelerated owing to the resources freed from reduced fuel subsidies in line with gradual fuel price deregulation. They will be coupled with targeted social assistance to protect the vulnerable. Concurrently, fiscal consolidation will be supported by revenue mobilisation, including reducing exemptions received by oil-related state-owned enterprises.
IMF
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