In-Depth Analysis
Democratic Republic of Congo
The DRC’s political environment has improved marginally since the election of President Tshisekedi; however, the country’s political risk remains elevated. In December 2019, the IMF resumed lending to the DRC for the first time in seven years. The DRC continues to be hindered by a challenging business climate, a weak regulatory environment, rampant corruption, and over-reliance on the mining sector.
We forecast GDP growth to decelerate to 2.2% in 2020 owing to the outbreak of Covid-19 and the temporary shutdown of one of the country’s largest mines. Aside from the devastating health effects, we expect Covid-19 to cause supply chain disruptions, which will lead to a decrease in export receipts and workforce productivity. GDP growth in the extractive industry will be weighed down by the planned suspension of production at the Mutanda mine in 2020-21 and the delayed start of new mining projects. Furthermore, the slowdown of the Chinese economy – the main buyer of copper and cobalt – could lead to a loss of fiscal and export revenues. Nevertheless, large-scale infrastructure projects and the government’s commitment to improving the business environment with support from the IMF should attract capital inflows and support economic activity going forward. The IMF Executive Board approved a disbursement of $368.4m under the Rapid Credit Facility (RCF) arrangement for the DRC in December 2019. This was the first time in seven years that the IMF resumed lending to the DRC. The Board also approved a Staff-Monitored Programme (SMP), which monitors the country’s reforms. (Source: DRC Annual Country Profile, published March 2020.)
Macroeconomic Data
(2019)
|
Fiscal Balance (as a % of GDP) |
-2.4 |
|
Consumer Price Index (% change y-o-y, avg) |
4.5 |
|
Current Account Balance (as a % of GDP) |
-3.7 |
|
Real GDP (annual % change) |
4.3 |
|
GDP per Capita, US$ |
576.5 |
|
Import Cover (months) |
0.5 |
|
Population, million |
86.8 |
| Total External Debt (as a % of GDP) |
10.8 |