The executive board of the International Monetary Fund (IMF) has approved $87 million in budget support for the Republic of Congo following the end of the second evaluation of the progress of the social and political reforms of the country under the Extended Credit Facility (ECF).
The financing is part of a $455 million ECF programme which the fund approved on January 21, 2022, leading to an immediate disbursement of $90 million.
A three-year financial program was created to help the Republic of Congo maintain economic stability and support economic recovery in the context of the Covid-19 pandemic, including by supporting financial support from official donors.
In a statement on Monday, the IMF said the Republic of Congo’s structural reforms are advancing, especially in procurement, management of public finances and debt and publication of a decree on conflict of interests.
The Fund however noted that four out of five performance criteria related to the fiscal position and debt were not observed, some substantially, but corrective measures have been taken to address these breaches.
“Economic recovery is expected to further strengthen in 2023, with improved oil production and government spending on development,” said IMF.
“Over the medium-term, the role of the non-oil private sector is projected to grow along with jobs and income levels.”
The fund expressed optimism that the Congolese authorities will focus the country’s fiscal policy towards reducing fragilities while maintaining debt sustainability.
“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,” said IMF.
“They will be coupled with targeted social assistance to protect the vulnerable. Concurrently, fiscal consolidation will be supported by revenue mobilization, including reducing exemptions received by oil-related state-owned enterprises.”