IMF Enters into Staff Agreement with the Democratic Republic of Congo on an Expanded Credit Facility and a Resilience and Sustainability Facility

November 13, 2024

End-of-mission press releases include statements from IMF staff teams reporting preliminary findings after a country visit. The views expressed in this statement are those of the IMF staff and do not necessarily represent those of the IMF Executive Board. Based on the preliminary findings of this mission, staff will prepare a report which, subject to management approval, will be presented to the IMF Executive Board for consideration and decision.

• Democratic Republic of Congo (DRC) authorities and the IMF reached a staff-level agreement on a new economic and financial arrangement supported by the Extended Credit Facility (ECF) and a new climate-focused arrangement supported by the Resilience and Sustainability Facility (RSF). .
• The program supported by the ECF aims to foster strong and inclusive growth, accelerate economic diversification, stimulate job creation, improve living standards, advance governance and transparency and reduce poverty, through an acceleration of high-quality investments in infrastructure and priority social sectors.
• The program supported by RSF aims to help the DRC realize its strategic vision as a “solution country” in the transition to a low-carbon global economy, while strengthening its resilience to climate shocks.

Washington, DC: An International Monetary Fund (IMF) staff team, led by Calixte Ahokpossi, IMF mission chief for the DRC, visited Kinshasa from October 31 to November 13 to discuss a new economic and financial arrangement supported by the IMF within the framework of the ECF. , and a new climate-focused arrangement supported by the IMF under the RSF.

At the end of the discussions, Mr. Ahokpossi issued the following statement:

“The DRC authorities and the IMF team reached a staff-level agreement on a new three-year economic and financial program supported by the IMF under the ECF, amounting to approximately 1, $77 billion, and a new three-year climate program. -targeted program supported by the IMF under the FSR, amounting to approximately US$1.1 billion, subject to approval by IMF Management and the Executive Board. The review by the IMF Executive Board is tentatively scheduled for mid-January 2025.

“The programs will be anchored on the action program of the government of the DRC (2024-28). The main pillars include promoting strong and inclusive growth by restoring peace and security, tackling the cost of living, investing in infrastructure and priority social and agricultural sectors to accelerate economic diversification and boost growth. creating jobs, and building resilience to climate change.

“Despite the challenges arising from the protracted war in the eastern region of the country, as well as the health situation triggered by the Mpox outbreak, economic growth is expected to remain resilient above 5.0 percent throughout the program period. This resilience, supported by a renewed commitment to fiscal prudence, as well as strengthened coordination between fiscal and monetary authorities and continued accumulation of international reserves up to recommended adequacy levels, should help alleviate inflationary pressures. , to lower the rise in the cost of living and to stimulate inflation. return to the Central Bank’s target of 7% by 2026.

“A key priority of the ECF-supported program is to ensure stricter compliance with public expenditure chain procedures. Related reform priorities include operationalization of the Treasury (DGTCP) and the Treasury Single Account, gradual decentralization of spending authorizations to relevant ministries and preparing the ground to move towards a resource-based budget framework to help protect public spending from the volatility of extractive sector revenues. This renewed fiscal prudence also requires increased mobilization of domestic revenue, notably by integrating the standardized VAT invoicing system, rationalizing inefficient tax exemptions, reducing tax evasion through enhanced monitoring of mineral exports and combating more against customs fraud at the borders.

“The expected expansion of fiscal space through the implementation of these policies should enable the DRC to meet priority spending needs, particularly in security, humanitarian aid, education, health, justice and investment in infrastructure and agriculture.

“The DRC is uniquely positioned to play a central role in the global low-carbon transition, thanks to its vast forest and water resources, as well as its green mineral reserves. To achieve its strategic vision of becoming a global “climate solution” country, it is essential that the government accelerates its efforts to more effectively protect forests, build resilience to climate-induced natural disasters, and integrate climate considerations into planning. public investment management.

“Finally, IMF staff urged the authorities to intensify their efforts on reforms aimed at improving governance and transparency – including in the extractive sector –, fighting corruption and improving the business environment. Steady progress on these fronts, including through increased use of digitalization in public service delivery, is key to unlocking the country’s potential for strong, diverse, inclusive and sustainable sector-led economic growth. private.

“Staff wishes to express its gratitude to the authorities, senior officials, technical staff, various stakeholders, including representatives of civil society, labor unions and the private sector, as well as development partners, for their hospitality, their continued support and their constructive discussions. »