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.
With the mining sector contributing more than 90% of the DRC’s total exports, the temporary shutdown of mines and the global commodity price slump will weigh heavily on the economy this year. Compared to our previous forecast for an economic expansion of 2.2%, we now expect the DRC’s economy to contract by 6.5% in 2020. Although authorities have been proactive in their efforts to contain the spread of Covid-19 and to cushion the economic impact caused by the pandemic, the country still faces numerous challenges. The DRC is hampered by poor governance, a weakening exchange rate, dwindling levels of foreign reserves and a widening twin deficit. The DRC also faces high levels of poverty and a poor healthcare system, which was already under notable pressure amid the Ebola and measles outbreaks. To help the DRC meet its urgent balance of payment needs, the IMF approved a disbursement of $363m under the Rapid Credit Facility (RCF) arrangement on April 22. Meanwhile, the World Bank approved $1bn in financing for the DRC’s educational and healthcare sectors on June 16. (Source: DRC Quarterly Update, published June 2020.)
Macroeconomic Data
(2019)
|
Fiscal Balance (as a % of GDP) |
-2.4 |
|
Consumer Price Index (% change y-o-y, avg) |
4.5 |
|
Current Account Balance (as a % of GDP) |
-3.4 |
|
Real GDP (annual % change) |
4.3 |
|
GDP per Capita, US$ |
576.5 |
|
Import Cover (months) |
0.5 |
|
Population, million |
86.8 |
| Total External Debt (as a % of GDP) |
10.8 |