IMF staff reach staff-level agreement on first overhaul of Republic of Congo extended line of credit
April 20, 2022
End-of-mission press releases contain statements from IMF staff teams reporting their preliminary findings after their visit to 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 which, subject to management approval, will be submitted to the Executive Board for discussion and decision.
Washington DC: A team from the International Monetary Fund (IMF) led by Pritha Mitra, head of mission of the Republic of the Congo, conducted a virtual mission with the Congolese authorities from March 31 to April 18, 2022 to discuss the first review. of the three annual agreement for the Republic of the 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 staffing agreement with the authorities of the Republic of the Congo on the completion of the first review under the Extended Credit Facility (ECF), which will be subject to the approval of the IMF Executive Board.
“Economic recovery is gaining momentum, but remains fragile amid the COVID-19 pandemic and the global aftermath of the war in Ukraine. Real GDP growth is expected to strengthen to 4.3% in 2022 , under the effect of improving oil production, the dynamism of the agricultural and mining sectors, the continuation of vaccination operations and the payment of domestic arrears, which contributed to the reduction of unsecured loans, l Stability of the productive and financial sector. Stronger economic activity is hampered by rising inflation, projected at 3.5%, due to the war-induced rise in world food and oil prices. Ukraine High oil prices, if maintained, will benefit the economy, but there are significant uncertainties surrounding oil price projections.
“Debt is considered sustainable after daring debt restructuring operations and the implementation of a prudent fiscal policy. However, debt vulnerabilities remain significant, especially in a context of high price volatility. Procurement management, debt and public finances, including investment, will be essential to prevent the accumulation of new internal and external arrears and to improve the efficiency and quality of public spending. Anti-corruption architecture, management reforms will also help consolidate the latest advances in terms of governance and transparency.
“Fiscal policy will have to strike a delicate balance between supporting a strong economic recovery and safeguarding debt sustainability. Gradual fiscal consolidation while increasing spending on welfare, health, education and infrastructure. This prioritization of spending will promote a In this perspective, the ongoing reforms of the administration must be complemented by an increase in the collection of non-performing loans, a significant elimination of tax and customs exemptions, and concrete measures. to increase oil-related tax revenues.Non-oil GDP.
“In this context, after financing the debt service, part of the surplus generated by the exceptional oil revenues should finance the tax deferrals initiated during the pandemic and strengthen social assistance to help, respectively, companies and low- and middle-income households to cope with inflation Accelerating measures to facilitate access to credit for small businesses will complement these measures By 2022, the surplus of extraordinary oil revenues should be saved by In the face of future shocks, around 2% of annual non-oil GDP should be spent on essential social spending, including infrastructure, and on the payment of domestic arrears, the rest being saved.
“The performance in the execution of the program has been good. All quantitative performance criteria have been met by the end of February 2022. The structural benchmark for the end of March 2022 was also established in relation to the the new medium-term strategy (GFP) and the associated action plan.The second structural benchmark was not met, but its most significant elements were implemented in time.In fact, the new anti-corruption law – corruption was effectively approved by Parliament in February and enacted in March IMF Technical Assistance.
“The support of development partners will be crucial for the successful implementation of the authorities’ economic and structural reform strategy.
“The mission met with 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 sector private and development partners.
“The IMF team is grateful to the authorities for their excellent cooperation and constructive discussions.”
IMF Department of Communications
PRESS OFFICER: Eva Graf
PHONE:+1 202 623-7100EMAIL: [email protected]