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Republic of Congo

Author(s):
International Monetary Fund
Published Date:
August 2012
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Chapter 1: Overview of the 2012-2016 DSCERP

Presentation of the 2012-2016 DSCERP

208. The 2012-2016 DSCERP. This Growth, Employment, and Poverty Reduction Strategy Paper (2012-2016 DSCERP) is the first book of Congo’s National Development Plan (NDP). It presents an integrated summary of the medium-term sectoral strategies and policies that Congo plans to implement to give substance to the President’s vision as explained in the “Future Path.” The principal objective of this vision is to accelerate society’s modernization and the country’s industrialization. The approach is to generate increased and shared prosperity in order to prepare for Congo’s emergence in the global economy.

209. The 2012-2016 DSCERP is also a new generation of Congo’s growth and poverty reduction strategy known by the acronym PRSP, the first edition of which was adopted in 2008. It was developed in the context of reaching the Completion Point of the Heavily Indebted Poor Country Initiative (HIPC-I) that Congo was supposed to facilitate by cancelling a significant portion of its external debt.

210. Despite the constraints at the time, the government spared no effort to ensure a participatory and consultative approach in developing this strategic framework. However, despite these efforts and limited by a very tight schedule for meeting the Completion Point requirements, this first edition of the PRSP encountered some difficulties in terms of adoption at the national level, which partially handicapped its realization (implementation, follow-up, and evaluation). The problem of adoption was most evident at two levels: (i) within the sectoral ministries; and (ii) in the budgetary process.

211. The first problem involves the adoption and recognition of the strategic framework and its priority programs by the principal stakeholders, particularly the sectoral ministries. In effect, based on the logic of “results-based management” to which the government is committed, the sectoral ministries are primarily responsible for the design, programming, budgeting, and execution of actions, and thus accountable for the results. However, despite a consensus-based approach, the limitations of the calendar on the one hand and limited capacities on the other contributed to weak involvement by the principal stakeholders in the preparation of the strategic framework and its PAP. In effect, at the time the PRSP1 was adopted, several ministries had not completed the process of validating their sectoral strategy and the programs that should have ensued therefrom. This failure was an obstacle to effective implementation of the strategy.

212. The second problem involves recognition of the strategic framework as the frame of reference for establishing national priorities and aligning the government’s budget with these priorities. The government has clearly espoused the PRSP as the consensus-based national strategic framework. However, despite significant progress made in strategic alignment of the budget since the introduction of the MTEF, the PRSP is still not given enough consideration in budgetary discussion, allocation, and forecasting processes. As indicated in the “public expenditure reviews” done with the Bretton Woods institutions: “budgetary allocations were not always consistent with the strategy’s priorities, which hampers the implementation of certain programs.”

213. After a straightforward review of these shortcomings, Congolese authorities resolved to strengthen the planning process to ensure that the sectoral ministries are fully responsible and the budget is strategically aligned so as to improve the effectiveness of government interventions. They took appropriate measures so that this second generation of the PRSP would be designed, prepared, and executed according to a strengthened participatory focus ensuring that “everyone is covered, everyone is involved, everyone is recognized, everyone counts, and all will have to be accountable.” These improvements are made intentionally and are among the attributes of the DSCERP summarized below.

214. The first substantive improvement is expansion of topics covered by the strategic framework compared to the first edition. The DSCERP is no longer limited to the traditional areas of poverty reduction such as the social sector or the economy itself. From now on it covers all the broad areas of government interest and intervention, particularly political, administrative, judicial, and security governance, productive sectors and integrated diversification strategies, infrastructures, and human resources.

215. In the planning and programming of actions, this complete coverage of the government’s principal missions/functions allows the DSCERP to take better account of sectoral interdependencies, complementarities, and synergies, enhancing the consistency of all actions and maximizing the effects of economic and social development.

216. For the budgetary process as well, taking all the broad areas of government intervention and thus the principal “cost centers” into account in the DSCERP presents a great advantage. It allows the government to make better trade-offs in budgetary choices based on the intersection of overall constraints on resources and the respective merits of the national strategy’s programs and priorities.

217. The second improvement involves the planning horizon. The DSCERP is broader in terms of the planning horizon (five years) compared to the PRSP1 (three years). The objective is to give the government and other stakeholders enough time to be better organized so that program implementation can be well sequenced over time, better synchronized among ministries and institutions within the administration, and more interactive in terms of the involvement of the public sector, private sector, and development partners.

218. This type of execution with improved coordination and follow-up is essential for improving the strategy’s chances of success. However, while the strategic framework establishes five-year goals, the DSCERP also includes three-year rolling program framework instruments for actions and budgets (the PAP and the MTEF). This combination of a more expansive planning horizon and strategic objectives defined over five years, targets set for three years and revised every year based on the realization of action plans and annual budgets offers better prospects for success in the implementation of the DSCERP.

219. “A common roadmap.” The third improvement is clearly the most decisive in terms of the chances of success for the Growth, Employment, and Poverty Reduction Strategy (SCERP). It involves operational documents supporting the DSCERP. In effect, besides the DSCERP itself (Book 1), the NDP also includes a sectoral programming document (Priority Action Plans - PAP) that is broken down into action programs for all the ministries. The PAP is used to prioritize actions and to ensure intra- and inter-sectoral consistency, as well as alignment with overall guidelines and strategic objectives. The NDP also includes a budgetary programming framework document (Medium-Term Expenditures Framework, MTEF), which is used to align the allocation of resources with the priorities of the strategy and the requirements of priority programs.

220. Full accountability of sectoral ministries. The fourth improvement involves the effort to prepare the DSCERP. To improve adoption, the DSCERP and its attached documents – particularly the priority action programs and program budgets – were prepared by the sectoral ministries themselves under the coordination of the central agencies (Planning and Budget) that ensured consistency based on an interactive and iterative process involving the sectoral ministries. This in-depth participatory approach orchestrated by the Plan made possible substantial contributions from all stakeholders in the preparation of the DSCERP. This made for a truly “integrated framework” that “brings together” sectoral policies and programs and “integrates” them in a coherent whole for pursuing the national objectives of growth, social development, and the emergence of Congo.

221. The 2012-2016 DSCERP, PAP, and MTEF. As indicated above, the DSCERP is accompanied by a set of attached “Books” that will be used to guide the programming, budgeting, and follow-up of actions carried out in upcoming years. The principal annexes include:

  • Priority Action Plan (BOOK2: PAP_2012-2016): It brings together the principal programs and action plans of the sectoral ministries for achieving the objectives of the strategy; the PAP is a summary of the sectoral PAPs, to which the ministries’ program budgets are attached (“Budgets by Program Objectives, BOP”);

  • A macroeconomic and budgetary framework for financing the strategy (Book 3: CMB-FS_2012-2016): It forecasts medium-term macroeconomic prospects (macro framework) and profiles the allocation of resources based on strategic objectives, areas of intervention, missions, and institutions (ministries and other government institutions) as well as financing methods;

  • An Institutional Framework for Following up the Execution and Performance of Priority Action Programs (BOOK4: SEP-PAP). This key document describes the institutional mechanism and the statistical and data processing tools to be set up to ensure the effective execution of programs, the follow-up of achievements, and the evaluation of impacts on the country’s economic and social development.

222. In summary, based on full sectoral coverage and its operational annexes, the DSCERP constitutes the core of the medium-term National Development Plan (“Comprehensive Development Framework”3) for the Congo. It provides an integrated framework of macroeconomic and sectoral strategies. It makes it possible both to organize the programming of actions and to align the government’s budget with the priorities of the strategy and effective follow-up of the execution of sectoral actions and budgets.

Why the 2012-2016 DSCERP?

223. Why is there a 2012-2016 DSCERP at this point in Congo’s history? The DSCERP is the “key product” of a far-reaching endeavor to strengthen the technical and institutional mechanism for strategic planning and economic management geared to development results. The government launched this program in 2008 with adoption of the PRSP. The program was intensified in 2009-2010, a period that marks an important turning point in the history of Congo’s recent economic governance, for both political and economic reasons.

224. In political terms, 2009 clearly marks the end of Congo’s difficult post-conflict period of transition to political stability and the “redeployment” of collective attention toward the country’s economic and social development. It is the year during which the government was able to turn its attention and its resources to the needs of social reconciliation and consolidation of the peace, as well as strengthened democracy and accelerated economic development.

In economic terms, it marks an important post-conflict transition from emergency management to requirements planning for Congo’s development.

225. This historic transition was marked – and made possible – by an important political event, namely the presidential election on July 12, 2009, which, in a very peaceful manner and with a significant majority, gave the President of the Republic a mandate for a new seven-year term. This event meant much more than a return to political stability. Firstly, it reflected the population’s satisfaction regarding the conduct of public affairs owing to the “New Hope” plan for society proposed by the President, candidate for his own succession in 2002. Next, it expressed the Congolese population’s acceptance of the President of the Republic’s vision for the country’s modernization and industrialization as advocated in the “Future Path”.

226. At the same time, the government is aware of the challenges of this new mandate, since it will be necessary, more than ever, to translate the promises of the “Future Path” into tangible achievements for the population and to promote Congo’s transition to economic emergence and shared prosperity. This is clearly a major political challenge, and the government’s response will determine the country’s medium- and long-term economic prospects.

227. In economic terms, in recent years Congo has undertaken significant reforms in economic and financial governance. On that basis, it benefited from a significant reduction of its debt in 2010, thanks to its having reached the Completion Point under the Heavily Indebted Poor Country Initiative (HIPC-I), and has reconnected with the international financial community on new terms.

228. From this perspective, debt relief is clearly the mark of a renewed “bond of trust” between the Congo and its Technical and Financial Partners, along with a substantial commitment of resources to assist the government in its development program. The funds thus released will complement domestic efforts and allow the government to intensify reforms and implement an ambitious program of structural investments, in order to diversify the economy, accelerate growth, create jobs, reduce poverty, and achieve the MDGs in 2015.

229. The 2012-2016 DSCERP and the sectoral PAPs represent important innovations for strengthened economic governance. Vigorous mobilization of domestic and foreign resources should help the government increase its budget margins so that it can cover the expenditures needed to support growth. However, achieving the targeted strategic objectives will require much more than a simple increase in the volume of resources. It will require a significant improvement in the effective use of resources and the quality of spending. For that reason, the Congo has a significant need for improved economic governance.

230. Well aware of this challenge, since 2008 the government has undertaken a far-reaching program to strengthen its technical governance capabilities. This program took the shape of several important efforts, particularly the implementation of the Action Plan for Improving Public Investment Management (PAAGIP); implementation of the Government Action Plan for Fiscal Management (PAGGFP), with strengthening of the system for following up government revenues and expenditures including installation of the Integrated Fiscal Revenue and Expenditures System (SIDERE); and reform of the government procurement process with creation of the Public Procurement Regulatory Authority (ARMP).

231. With equal enthusiasm, the government has introduced significant innovations in economic management and strategic planning. Particularly since 2009, the government has implemented important reforms in the area of economic and financial management, including the adoption of a new Organic Law Establishing the Budget Law (LOLFP), and progress toward a system of Results-Based Management (RBM) in Development.

232. At the confluence of public finance reform and improved strategic planning, the government has adopted and introduced a Medium-Term Expenditure Framework (MTEF) to guide budgetary policy. The MTEF establishes a “bridge” between planning and budgeting. It allows for better alignment of budgetary allocations and strategic priorities. Thus, the MTEF forces an important transition in budgetary culture and practice, moving from the paradigm of budgets of “means” (availability of resources) to the paradigm of budgets of “ends” (financial embodiment of strategic objectives), as clearly specified in the strategic framework. This “marriage” of the budget and the strategic plan makes these two tools the key instruments for pursuing the objective of increased and shared prosperity.

233. The 2012-2016 DSCERP: toward a culture of development and structured commitment to transform the “Congolese condition.” Transforming the Congo as indicated in the “Future Path” is not just a technical or financial matter of mobilizing resources or increased effectiveness in the use of those resources. Achieving such an ambition demands a new culture of leadership and government for development.

234. The government’s reform efforts and the favorable international environment have in fact already ranked Congo among about a dozen developing countries with the best performance over the last three years, particularly in the area of economic growth. This performance has been recognized and applauded by the international financial community.

235. However, this growth continues to be very volatile because it is highly dependent on petroleum resources, for which prices are extremely variable. This great volatility limits the beneficial effects of growth on poverty reduction and sustained improvement in household living conditions. For example, income poverty still affects more than one-third of the population in a country with abundant natural resources.

236. Nonetheless, it is very encouraging that good performance in the non-petroleum sector in recent years is apparently reflected in a sustained rate of private sector job creation (averaging 8% since 2008). Added to this is the effect that government spending has had in helping to significantly reduce unemployment. The results of the ECOM2 indicate that the unemployment rate has fallen considerably, from 19.4 percent in 2005 to 6.9 percent in 2011.4 Despite this performance, the employment problem persists in terms of numbers and quality, particularly with respect to young people between the ages of 15 and 29, the age group for which the unemployment rate (12% in 2011) continues to be twice the national average. In addition, despite encouraging progress made in recent years, the social sector still has significant weaknesses, most particularly in the areas of health, education, social protection, water, and sanitation.

237. The government performed a candid analysis of this mixed picture and has resolved to redouble its efforts and efficiency in strengthening achievements and meeting challenges. Although it is very encouraged by the sustained progress of recent years, the government recognizes that there is little room or tolerance for complacency, procrastination, and “business as usual.” On the contrary, it plans to inject a national sense of urgency along with collective awareness of the challenges and a national desire for rapid and sustained change to achieve Congo’s transformation. It plans to promote this enthusiasm and mobilize forces and national resources to transform Congo from a nation relying passively on the wealth of its subsoil to a nation that is prospering based on the quality of its governance, the productivity of its human resources, the creativity and entrepreneurship of its operators, and the diligence of its citizens.

238. To this end, the government plans to promote a new pro-development culture and leadership like that of countries that have successively made the transition to emergence over the last four decades (see Box 2). In effect, the experience of these countries shows that Congo needs leadership marked by several attributes: (i) “clear-sightedness” to better target and plan for the future, but also to adapt to unanticipated changes; (ii) “diligence” to carry out actions in a resolute and sustained way; and (iii) “perseverance” in efforts and actions to surmount obstacles and recover from setbacks, in order to achieve results.

239. Increased emphasis on diligence and results. It is in this spirit that the government adopted this new culture of “Results-Based Management in Development” (RBM-D) in which it wants to make the DSCERP the reference document for its interventions over the course of the period 2012-2016. This new approach in the management of public affairs is based on clearly identified and broadly shared objectives, well-defined and well-distributed missions and responsibilities, “missionaries/actors” well endowed with resources (“budgets based on program objectives”), and accountable in terms of performance (“Performance Contract”), and an institutional mechanism with the power to execute and “act as the policeman” for the government’s programs and actions in the area of follow-up and evaluation. This culture of “due diligence” has already been adopted at the highest levels of the administration (Office of the President of the Republic, cluster coordination within the government). It must spread from the top down to all government decision-makers and employees and must ultimately be emulated by private sector operators and the public in order to support success in the implementation of the national development strategy.

240. In summary, the government plans to combine efforts to mobilize and effectively use resources with a culture of vision and shared ambitions, sustained collective efforts, diligence, perseverance, and obsession with performance, in order to rally the entire administration, the public, private operators, and partners around an “Emerging Congo” project. The 2012-2016 DSCERP constitutes the common road map for this collective journey.

How the 2012-2016 DSCERP was Developed: Mechanism and Process

241. The government set up an institutional process to organize the preparation of the 2012-2016 DSCERP on a participatory basis and with particular emphasis on the contribution of the sectoral ministries, out of respect for the principle of subsidiarity. This process was supervised by a Steering Committee that guided, encouraged, and directed the work, and then validated the outcomes. It was supported by a technical mechanism that put together the documentation, organized the conduct of analytical studies, and coordinated thematic group discussions and the production of basic reports. It then prepared analyses and strategy documents, as well as sectoral programming and macroeconomic and budgetary framework papers.

The Institutional Mechanism

242. The preparation of the 2012-2016 DSCERP was coordinated by an institutional mechanism inherited from the preparation and follow-up of the PRSP-1. This mechanism was strengthened so as to allow for increased contributions from the sectoral ministries, development partners, the private sector, and civil society. This mechanism was formally established under Order No. 4838/MEPATI-CAB of June 30, 2010, on “creation of a Steering Committee,” a “Technical Secretariat,” and “Technical Units.”

243. The Steering Committee (SC). A policy group guiding the work, the SC is presided over by the Minister of the Economy, Planning, Land Reform, and Integration (MEPATI), who is the Coordinator for the “economic cluster.” The SC also includes representatives from the legislature, the private sector, and civil society. Throughout the process, the SC provided general guidelines. It reviewed the drafts of various documents and presented and defended them before government as a whole (government seminar and the Council of Ministers) as well as parliamentary groups, partners, and the public.

244. The Permanent Technical Secretariat (STP). The secretariat is coordinated by the General Director for Planning and Development (DGPD/MEPATI). The STP was responsible for coordinating the technical work, particularly the work of the Thematic Discussion and Editorial Groups, as well as the Technical Programming Units. In that capacity, it supervised the preparation of documents and the process of validation and dissemination of output. The STP was assisted by the Consultative Group made up of Technical and Financial Partners.

245. The Technical Support Unit. This is a task force set up to carry out the various components of the program to prepare and draft the DSCERP and the other books attached to it.

246. The GTDR/SGTDR (Thematic Discussion and Editorial Groups and Subgroups). These groups, divided into subgroups according to the sub-components of each theme, led the sectoral strategic discussions and prepared contributions for the chapters and sections of the DSCERP. The GTDRs were organized according to the broad themes (“nodes”) in the development of Congo, namely: (i) Governance; (ii) Economy; (iii) Infrastructure; (iv) Social Development and Inclusion; (v) Education, Training, and Scientific Research; (vi) Sustainable and Balanced Development. They had to prepare the status report and in-depth review of sectoral strategies and to suggest medium-term strategies for achieving the general and sectoral objectives of the DSCERP. They saw to the production of the basic documents (sectoral reports) that were used to draw up the DSCERP.

247. The Permanent Committee for Macroeconomic and Budgetary Framing Unit (CPCMB). This unit was organized into three sub-groups: (i) the macroeconomic and budgetary framework sub-group; (ii) the central MTEF sub-group; and (iii) the sectoral MTEF subgroup. The first two were in charge of strengthening the macroeconomic and budgetary programming tools, doing the work of macroeconomic simulation, and preparing the macroeconomic framework and the global MTEF for the DSCERP. The third sub-group was responsible for preparing the priority action plans (PAPs) consistent with the DSCERP and for preparing the Budgets by Program Objectives (BOP) for the ministries. These reports made it possible to produce the compendium of the strategy’s PAPs/MTEF for the period 2012-2016.

248. Technical support. A team of international consultants was hired to provide technical support for the work, with a view to capacity building.

The Process of Developing the DSCERP

249. The mechanism described below was used to drive a participatory and consultative process, in both technical and institutional terms, for developing the 2012-2016 DSCERP.

250. At the technical level. The work done to enhance the planning tools, starting with adoption of the PRSP, intensified in 2009 and 2010. This includes: (i) introducing the MTEF and its macroeconomic, budgetary, and sectoral components; (ii) parallel tasks initiated in 2010, particularly to strengthen the technical mechanism for physical and financial control of investments; and (iii) statistical follow-up of PRSP programs.

251. Besides the strengthening of tools, a series of analytical studies were done to define the overall strategic framework and the sectoral policies. This included in particular: (i) a forward-looking study (Congo Vision-2025) undertaken, on the basis of a participatory approach, to define more precisely the type of society to which the Congolese aspire; (ii) important sectoral studies, particularly on employment, the business climate, diversification/industrialization clusters, for developing integration strategies for the transformation of the economy in order to promote growth and job creation; (iii) the Congolese Household Survey (ECOM 2) to evaluate poverty and human development trends in Congo and provide correctives to the policies of the PRSP; (iv) Demographics and Health Survey (EDS2) to analyze performance and trends in the area of health and demographics; (v) the national report on progress made toward achievement of the MDGs; (vi) the report on implementation of the PRSP in 2009 and the PRSP completion report.

252. In institutional and political terms. As these different technical spheres were being developed, the government took steps to bring it all together in preparing the NDP. To this end, the MEPATI first prepared a “Rationale” to explain the justification for and functionalities expected from the NDP, which was presented to the Council of Ministers. The MEPATI then issued an order creating the mechanism and organizing the process for preparing the NDP as indicated above.

253. A detailed road map was then prepared. On this basis: (i) a seminar launching the NDP and the Forward-Looking Study was organized in March 2011; (ii) the seminar was followed by discussion and editing work by the GTDRs over the period from April to May 2011; (iii) the GTDR reports were compiled and merged according to broad themes by the Technical Secretariat (ST); (iv) these reports were revised and integrated in a preliminary draft of the DSCERP during an editing retreat (July 2011).

254. Based on this preliminary draft, the STP set up reviews to strengthen the sectoral strategies and make programs consistent within and across the broad themes. Various studies were also undertaken to further develop the strategies and action plans in the productive subsectors, particularly hydrocarbons, mines, forests, agriculture, and tourism. The results of these tasks and of the major studies (ECOM, EDS, etc.) were integrated in the document to develop a complete draft of the DSCERP (Draft 1, 30 October 2011), with its sectoral programming annexes (Book 2) and macroeconomic and budgetary framework (Book 3). A seminar was organized from October 15 to 22, 2011 to review the supporting works in order to incorporate them in the document.

255. Technical tasks were undertaken to take into account the government’s guidelines and stakeholders’ observations. A rereading seminar was organized by the Permanent Technical Secretariat for November 27-29, 2011, after which a final product was sent to the government for validation.

The Pillars of the 2012-2016 DSCERP

256. As stated above, the NDP is the operational framework for the “Future Path” for the seven-year period 2012-2016. Recall that the objective of the “Future Path” is to modernize and industrialize Congo to ensure increased and shared prosperity, and to raise the country to the rank of the emerging nations (See “Future Path,” 2009). This vision is broken down into three broad strategic lines that represent the areas of intervention or “mega-programs” of development.

The Mega-Programs of The “Future Path”

257. The 2012-2016 DSCERP is the operational framework for the “Future Path.” As shown in the diagram in Figure 2, the principal objective of the “Future Path” is to pursue increased and shared prosperity based on industrialization of the economy and modernization of Congolese society. This overall objective is broken down into broad categories of action programs targeting the respective sub-objectives of growth, competitiveness, and social inclusion.

258. The first category involves the “vectors” of growth. This refers to combined policies targeting the “productive sectors” (agriculture, forests, mines and hydrocarbons, tourism, etc.) to stimulate the transformation and densification of the economic fabric. The strategic sub-objective being pursued is to increase and maintain the pace of growth and job creation.

259. The second category includes the development strategies for the “factors” of production (infrastructure, human resources, financial resources, and business climate). These key factors determine the costs of production and thus the overall competitiveness of the economy, which in turn allows development of the vectors of growth described above.

260. The third category includes the “training and inclusion strategies” that affect the social sectors (education, health, gender, social protection, etc.). These strategies make it possible to improve the productivity of participants, facilitate their access to the factors of production, and improve their share in the distribution of income. In sum, these strategies strengthen the population’s capacity to contribute to economic development, on the one hand, increase its relative ability to profit from the fruits of growth in terms of increased income and improved living conditions, on the other. This bloc thus constitutes the two-way “conveyor belt” between economic growth and social development. It is the engine of shared prosperity.

Figure 1.Congo, The Three Pillars Of Emergence

The Pillars of the 2012-2016 DSCERP

261. The broad areas of intervention called “pillars” were already the essence of the “Strategic Themes” of the PRSP1, specifically governance, economic growth, and social development. They continue to be major challenges that together constitute the “nodes” of Congo’s development and emergence.

262. The first pillar, governance, determines success on all the other fronts. It means governance in all its dimensions – political, judicial, administrative, security-related, and economic. The principal objective of this pillar is to strengthen participatory and inclusive democracy and to promote the rule of law and peace to which Congo aspires. The strategies in this area take into account political and administrative organization and management, defense and security, as well as the judicial system. They also involve economic and financial governance, on the basis of which the government can improve the quality and effectiveness of its interventions, in order to promote shared prosperity – growth and social development – as the most effective means of ensuring national harmony and long-term peace.

263. The second pillar refers to the transformation of the economy. The principal objective is to intensify economic activities in order to accelerate growth and promote job creation. This pillar incorporates diversification strategies targeting the vectors of production. It also includes the cross-cutting strategies of “soft” competitiveness, particularly macroeconomic policies, structural reforms, and commercial strategies for the opening of national, regional, and global markets, creating an environment favorable to investment and growth. These strategies are based on major reforms that “open up” economic opportunity and make it more competitive due to increased competition (effects of competition) and induced rationalization of the structures and capacities of production (economies of scale).

264. The third pillar refers to the development of economic and social infrastructures. This is the “hard core” of the modernization of society and improved competitiveness. It involves (soft) reform programs and (hard) investment programs that seek to provide for the physical (transportation) or virtual (telecommunications) connection of the economic area, as well to connect operators to domestic markets, the regional economy, and the global economy. These strategies make it possible to reduce transaction costs and thus increase competitiveness (external economies). Moreover, they provide essential productive and social services to population groups. In this sense, strengthening infrastructure services (particularly transportation, energy, water) also contributes to socio-economic “training” strategies, which increase the population’s participation in growth and in the sharing of its benefits.

265. The fourth pillar refers to social development. It seeks to strengthen and develop human resources, as well as to improve the ability of groups, including the most vulnerable groups, to contribute to growth and profit from it. It involves programs dealing with education, health, social protection, and vulnerable groups (gender, children, youth, the elderly, etc.). These programs seek to strengthen the productive capacities of population groups, to reduce their vulnerability, and to strengthen solidarity and social security. In turn, structured solidarity and shared prosperity make it possible to better cement the body social, to avoid tensions and conflicts born of gross disparities and marginalization, promoting the genesis of a strong pro-growth national consensus and helping to accelerate the pace and maintain the sustainability of achievements.

266. The fifth pillar refers to various dimensions of “balanced” development that is sustainable and thus enduring. The strategies are subdivided into two sub-groups. The first sub-group seeks to better “balance” development in the country’s different departments and between urban and rural areas. The objective is still inclusion: to ensure that no department or population group is “left out.” The programs include decentralization, territorial development, accelerated municipal development, and local development. Added to these are rural and urban development programs, as well as policies targeting “pockets” of marginalization and poverty (urban slums, disadvantaged areas in the provinces). These strategies make it possible to even out the status of various populations throughout the country and allow them to adopt development programs better, contribute to them effectively, and benefit from them. This sub-group thus constitutes the basis for adoption of the NDP by all population groups.

267. The second sub-group in this pillar brings together the medium- and long-term “sustainability” strategies. The objective is to preserve the country’s natural riches while developing them on a sustainable basis for the long-term and greater well-being of the population. These programs include environmental protection, sanitation, and combating global warming.

The Pillars of The DSCERP and The “Nodes” of Africa’s Emergence

268. A World Bank study examined in depth “how Africa can claim its just place in the 21st century”5 and overcome the challenge of development. The main conclusion is that a confluence of factors – particularly poor governance and conflicts, weak human capital, limited competitiveness and diversification of economies, as well as the problems of indebtedness – constituted a chain of “vicious and interconnected circles.” This chain “linking” countries in stagnant growth perpetuates poverty and prevents populations and countries from benefiting from globalization.

269. As a corollary, Africa’s emergence requires integrated strategies as well as coordinated and simultaneous actions on these specific fronts in each country in order to convert the chain of “vicious circles” into “virtuous circles” and thus provide the catalyst for development. In summary, countries must focus “their development efforts on four groups of problems, leading to important cumulative interactions,” in particular: (i) improving the management of public affairs (good governance) and preventing conflicts; (ii) investing in human capital (education, health, etc.); (iii) improving the competitiveness and diversification of their economies; (iv) reducing their indebtedness and dependence on aid, as well as strengthening partnerships at both the global and departmental level.

270. Regardless of the endogenous causes for under-development and poverty presented and illustrated in Figure 2, it should, nonetheless, be stipulated that some of the causes of this under-development and the resulting poverty are based on the marginalization of Africa, and sub-Saharan Africa in particular, with respect to the general process of globalization. The characteristics of this marginalization include unfair terms of trade and the flooding of these markets by products subsidized by the so-called developed, or emerging, economies. This situation often condemns entire subsectors because the prices for these subsidized imported products are lower than the cost of production. This is true of the livestock sector.

Figure 2.The Development Nodes Of Congo And Africa

271. Efforts to overcome these exogenous constraints on development and poverty reduction should be undertaken at the supranational level, in continental or regional circles, in order to defend the continent’s position within large international organizations.

272. With some minor variations, the pillars of the Congo’s DSCERP are clearly the “links” in the chain of factors leading to impoverishment or development that were identified in the aforementioned study. In the case of Congo, the relevance of this configuration of “development themes” is reinforced by concern over converting the very organization of government into decision-making “hubs.” In effect, the missions of the ministries are grouped together under collaboration and decision “hubs” including “political governance,” “economy,” “infrastructure,” and “social sectors.” This was the underlying administrative organization of the structure of the PRSP1. It was also used effectively to organize the GTDR for preparation of the 2012-2016 DSCERP. It will facilitate both the effective implementation and follow-up of programs.

Implications for The Alignment of DSCERP Policies

273. The aforementioned study clearly emphasizes that the interdependencies and interactions among the different links in the chain involve “integrated strategies and coordinated and simultaneous actions on all fronts.” In other words, none of the pillars can be set aside without hampering progress at other levels and thus the strategy as a whole. For example, no progress can be made toward participatory democracy or in diversifying and modernizing the economy if the social sector is neglected, because the weakness of human resources (lack of education) represents an obstacle to democratization (weak participation in the political process) as well as to diversification (limited ability to absorb technologies and limited labor productivity). Similarly, “governance” cannot be sacrificed to benefit other factors because poor governance also means poor-quality policies, ineffective implementation of programs, and exorbitant costs that limit budgetary resources to such an extent that the development of the other pillars cannot be accommodated on a financially sustainable basis.

274. It is this cumulative awareness of the interactions among the pillars of development that led the Congolese government to expand the strategic framework of the traditional PRSP to create a complete and integrated framework of development in all its dimensions, meaning a truly national plan. In practice, the interdependence of these pillars also means that none of these strategic areas can be neglected and sidelined or left behind for long without limiting the other areas and impeding the success of the strategy as a whole. Thus, there is absolutely no question of “priority sectors.” Rather, there must be simultaneous actions with optimal synchronization of programs and effective “sequencing” of actions. In such a process, budgetary programming around the MTEF will prove to be decisive. The DSCERP and its operational components are thus well-designed and structured to help the government lead the battle against poverty and support emergence on all fronts.

The Structure of the 2012-2016 DSCERP

275. The document is organized in three large sections and each section is organized around the “nodes” indicated above. The first section (“How is Congo doing?”) reports on the status of each of the broad areas, specifically governance (Chapter 2), growth and employment (Chapter 3), infrastructure (Chapter 4), social development, poverty, and the other Millennium Development Goals (MDGs) (Chapter 5). These analyses provide a brief historic overview for each area. They then present Congo’s recent performance, particularly since adoption of the PRSP1. They conclude with a list of the principal obstacles to be removed in order to improve performance and accelerate the pursuit of the strategic objectives.

276. The second section is the most detailed of the document. It addresses the central question, namely: Where does Congo want to be in 2016 (Vision and broad strategic targets)? What needs to be done over the next five years to lead Congo toward the realization of this vision (Action programs)? Specifically, Chapter 6 deals with the long-term vision as expressed in the “Future Path.” It provides the bridge between this vision with its underlying “framework programs” and the medium-term objectives specified in the different pillars of the DSCERP.

277. Strategies, major programs, and key actions are described in Chapters 7 to 15. Specifically, Chapter 7 reviews the challenges in the area of governance. It specifies the medium-term objectives and describes the strategies and programs for strengthening governance in political as well as legal and economic terms. Chapters 8 to 11 address the objectives, strategies, and programs that should improve competitiveness and stimulate the diversification of the economy with a view to accelerating growth and creating jobs.

278. Chapter 8 in particular deals with the “vectors” of growth. It proposes a group of sectors of activity (“clusters”) that, based on integrated and targeted strategies, should lead to industrialization and produce sustained growth. The clusters examined in detail include (i) mines and hydrocarbons; (ii) agriculture and the agroindustry chain; (iii) forests and timber industries; (iv) construction and building materials; (v) tourism and hotels; and (vi) financial services. In each case, the analysis briefly presents the cluster’s products and key actors, as well as supporting activities. It discusses Congo’s competitive advantages in terms of the national, regional, or international market and goes on to describe key programs and projects for development of the cluster as well as prospects in terms of the contribution to growth, employment, and government revenues.

279. Chapters 9 to 13 deal with the principal “factors” of economic growth and social inclusion. In particular, Chapter 9 describes the major strategies and programs for strengthening private sector participants, making economic opportunities more competitive and attractive to business (reducing risks and transaction costs), and expanding markets (commercial and regional integration policies). Chapter 10 deals with employment both in terms of supply (sectors of production) and demand (basic training and skills training) and the labor market (wage and benefit policies, selective immigration strategies). Chapter 11 deals with another key factor of production and competitiveness: infrastructure. It analyzes the major strategies and programs – structural reforms and investments – in the development of transportation, energy, water, and telecommunications.

280. Chapters 12 and 13 address development of the social sector, which is crucial both for sustaining growth and for ensuring that population groups participate in that growth and share in its fruits. Chapter 12 describes key strategies, programs, and projects in the education sector. Chapter 13 considers the health sector, HIV/AIDS, and social protection. The sections on gender and vulnerable groups address other important questions related to training and inclusion.

281. Finally, Chapter 14 deals with questions of balanced development. The initial sections cover the strategies of decentralization, accelerated municipal development, local development, and territorial development. The final section describes the challenges and details the strategies and major programs for protecting the environment and combating global warming.

282. The third part of the document deals with the question of “How is this to be done?”Chapters 15 and 16 in particular analyze the important questions of costs and financing for the strategy. Chapter 15, on the “macroeconomic and budgetary framework,” describes the macroeconomic prospects consistent with the strategy, taking into account the growth effects of major sectoral programs. It then proposes a strategic budgetary framework (Global MTEF) to align resource allocations and sectoral priorities. It then highlights the financing requirements (government portion) for the strategy as a whole. Chapter 16 outlines the financial strategies for the entire DSCERP in terms of both the government’s budget and private resources. It suggests some innovations in this area, particularly public-private partnerships for financing economic infrastructures.

283. Chapter 17 deals with the institutional and technical organization for implementing actions, monitoring achievements, and evaluating effects. The initial section discusses the institutional arrangements and tools needed to monitor program performance and the implications for strengthening the capacities of the administrative structures concerned, particularly the General Large-Scale Projects Commission (DGGT), the coordinating structures within the plan, and the sectoral ministries. The second section deals with the statistical mechanism and system for following up and evaluating the strategy’s programs, and the implications for strengthening the capacities of the structures concerned, particularly the Statistics Directorate and the Planning Directorate.

284. The document also contains a set of illustrations that are intended to raise all stakeholders’ awareness of the importance of the policy areas considered and the relevance of the Congolese government’s strategies in each area, in terms of the experience of “high-performance” or “emerging” countries. The data used for the figures and tables are official Congolese statistics or based on World Bank data (World Bank databank, 2011).

285. Attached to this summary document are detailed operational books organized or grouped according to the “nodes.” This means: (i) a PAP (Book 2) that summarizes the programs and actions of ministries and institutions, as well as program budgets for these institutions; (ii) a complete macroeconomic and budgetary framework document (Book 3), explaining in detail how the macro framework and the comprehensive MTEF were determined and indicating how the strategic objectives – growth, employment, poverty reduction, and social development – could be achieved if the strategy as a whole is well-executed; (iii) an important document on organizing the follow-up of execution and evaluating DSCERP program performance (Book 4).

Part One: How is Congo Doing?

Chapter 2: Governance

286. Governance in all its dimensions – political, administrative, judicial, economic and financial, security and national defense – constitutes the foundation of economic and social development. It contributes to poverty reduction, sustainable human development, and the emergence of nations. In effect, poor governance, whether in the organization and exercise of power (political governance), in the management of common resources and the provision of public goods and services (economic and administrative governance), in the application of laws and protection of rights (judicial governance), or in the use of government defense and security forces (security and national defense governance) is the principal cause of the persistence or growth of extreme poverty, inequities, exclusion, and socioeconomic marginalization. In other words, the combination of poor governance and socioeconomic marginalization are at the core of a tangle of vicious circles that often generate conflicts.

287. In economic and administrative management in particular, poor governance is the source of governmental dysfunction, of poor allocation and misuse of public funds, of deterioration in the quality of public services, and of ineffectiveness in the interventions of government. It also causes significant slippages due to the poor quality of macroeconomic policies, leading to instability. It is the source of weak growth, extreme indebtedness, or inflation, which stifle the economy and impoverish households. All these factors are unfavorable to growth and poverty reduction.

288. The history of Congo, like that of many other countries, particularly in Africa, clearly shows that there is no greater cause for the impoverishment of populations and the regression of countries than conflicts, in both economic and humanitarian and social terms. It follows that poor governance is the principal factor in economic and social regression or stagnation, and thus the greatest obstacle to development.

289. These developments are analyzed in the following sections, according to the different sub-areas of governance, from political to judicial to economic governance. The strategies for strengthening governance in these sub-areas are examined in detail in the third part of the document.

Political Governance: Advances in Democracy and Consolidation of The Peace

290. Political governance is defined as the set of methods used to determine and operate the political system, the appropriations system, and the exercise of political power. The principal objective for Congo is the emergence of a modern, inclusive, and participatory democracy that guarantees institutional stability, under the rule of law, liberty, and peace.

291. It follows that good practices in the area of political governance are defined by the representativeness of those in government, which in turn depends on how they are selected (electoral process and other method of appointing leaders), the participation of the governed in the political process and their influence on the objectives, methods, and results of political action. Governance thus results from the credibility of the electoral system, from how powers are distributed, and from balance in the exercise of powers, as well as from respect for laws, rights, and liberties. Hence the famous Jeffersonian phrase extolling a “government of the people, by the people, and for the people.”

Historic Overview

292. Like most African nations, Congo has confronted the thorny issue of political governance since it gained national sovereignty on August 15, 1960. In effect, since independence, Congo has gone through a period marked by numerous tumultuous events leading to a succession of political regimes. These changes were based on ethnocentrism, recurring violence, and ceaseless and renewed instability. A period of relative stability fostered the restoration of a multi-party system and pluralist democracy.

Important Achievements in Recent Years

293. Despite the legacy of habits inherited from the past, the implementation of governance programs has been significantly improved, as these programs have made it possible, among other things, to:

- Resume the democratic process and accelerate the establishment of constitutional institutions;

- Further develop the democratic and decentralization process;

- Effectively finance political parties from the government’s budget;

- Establish a program to promote and protect indigenous populations.

294. Despite the restoration of political stability, perception indicators in the area of good governance are still low and fall far short of expectations, in that the country is still at the bottom of the scale (in the bottom quintile) in terms of the perception of the rule of law and its rating has even deteriorated slightly in the area of combating corruption.

295. These programs are also reflected in a perceptible improvement in international indicators of political governance in Congo, although major challenges remain in other aspects. Figure 4 shows the progression of international governance indicators. Congo appears to have made notable progress in the area of “political stability” between 2000 and 2010, with its rating increasing from 10 to 35 out of 100 according to the international classification of the World Bank. By comparison, the countries of sub-Saharan Africa have seen little change in this criterion over the same period, although the average rank remains higher than that of Congo.

Figure 3.Congo In International Competition – Governance

Source: STP/World Bank, Governance Indicator

296. Resumption of the democratic process, which had been interrupted by the conflicts of the late 1990s, and the establishment of institutions in accordance with the Constitution of 2002 have allowed for significant improvement in the political situation by strengthening democratic culture and governance within the framework of the PRSP. The recent organization of the latest elections (legislative in 2007, local in 2008, presidential in 2009, and senatorial in 2011) is a perfect example of this. To consolidate these achievements, consultations among the political authorities were organized prior to the upcoming elections in December 2011 in Ewo (West Cuvette).

The Main Challenges to be Addressed

297. Although significant progress has been made in promoting good political practices, individual liberties, and the independence of the media, the government should take the following actions, among others, to further consolidate social peace:

  • - Improve social and inclusion policies, particularly through transparency, impartiality, accountability, and combating public sector corruption, as well as political practices (financing of political parties, electoral campaigns, etc.);

  • - Strengthen gender policies to improve the political and administrative representation of women in society.

Administrative and Judicial Governance

Administrative governance

Historic Overview

298. Governance in Congo is a long-standing issue dating back to when it first took charge of its own destiny with the proclamation of the republic on November 28, 1958. This culminated with independence on August 15, 1960, when the colonial administration made way for the Congolese administration. Since that time, it has not ceased to be the focus of concern for constitutional regimes characterized by institutional instability (18 constitutions – from independence to 2002). This cyclical movement was summarized as follows in an assessment of the record of the fifty years that had passed since independence: “construction, destruction, and reconstruction.” Thus, as of now there is no framework capable of serving as a basis from which the dynamics of development could be successfully launched. Instead we find “institutional duplication of effort, an overload of laws and regulations, an overgrowth of projects and programs that still fail to reflect previously defined strategies, endless diagnostic assessments, and cumulative problems.” This has meant that there is still no effective social organization in the service of development.

Achievements in Recent Years

299. After the conflicts that marked the 1990s, the fabric of national administration is considerably weakened as are the values associated with respect for public affairs. This is reflected in deterioration in the quality of public services and the population’s access to them. However, as a result of the reforms undertaken, the country has made significant progress, particularly in terms of increased personnel and resources allocated to civil service, reorganization of the government in coordinating hubs to improve the sectoral coherence of programs and actions, the establishment of agencies to combat corruption, and increased staff capabilities in local governments.

The Main Challenges to be Addressed

300. Despite these efforts, government administration continues to present significant areas of dysfunction that affect its effectiveness, particularly (i) anachronistic laws and legislation for government personnel and the social protection system; (ii) ill-suited missions, structures, positions, staff, and resources; (iii) difficulties controlling civil servants as well as the payroll; (iv) the absence of an attractive compensation policy to encourage effectiveness; (v) aging government personnel and an obsolescent system for tracking civil service careers.

Judicial Governance

Historic Overview

301. Since Congo gained independence, Congolese courts have been governed by two systems of justice, one based on custom and the other based on French law. The Congolese legislature has attempted to unify these systems by enacting laws and codes, including:

  • - Law No. 18-60 of January 16, 1960 on protecting youth;

  • - Law No. 35-61 of June 20, 1961 on the nationality code;

  • - Law No. 1-63 of January 13, 1963 on the criminal procedure code;

  • - Law No. 5/63 of January 13, 1963 on looting and destruction;

  • - Ordinance No. 25/70 of August 1, 1970 on regulating the conditions under which convicted foreigners may remain in the Popular Republic of Congo;

  • - Highway code (Order No. 4223 TP-AP on the application of Decree of October 4, 1932 governing automobile traffic and road traffic in French Equatorial Africa);

  • - Law No. 45-75 of March 15, 1975 instituting the labor code in the Popular Republic of Congo;

  • - Law No. 51-83 of April 21, 1983 on the code of civil, commercial, administrative, and financial procedure;

  • - Law No. 073/84 of October 17, 1984 on the family code;

  • - Law No. 022-92 of August 20, 1992 on organization of the judicial branch in the Republic of Congo;

  • - Law No. 19-99 of August 15, 1999 amending and adding some provisions of Law No. 022-92 of August 20, 1992 on the organization of the judicial branch in the Republic of Congo;

  • - Law No. 025-92 of August 20, 1992 and Law No. 30-94 of October 18, 1994 on the organization and operation of the Supreme Court;

  • - Law No. 17-99 of April 15, 1999 amending and adding certain provisions of Law No. 025-92 of August 20, 1992;

  • - Law No. 30-94 of October 18, 1994 on the organization and operation of the Supreme Court;

  • - Law No. 026-92 of August 20, 1992 on the organization of the legal profession;

  • - Law No. O17/89 of September 29, 1989 on the institution of the notary’s office;

  • - Law No. 027/92 of August 20, 1992 on the institution of the bailiff’s profession;

  • - Law No. 023-92 of August 20, 1992 on the regulations for the judiciary;

  • - Law No. 15-99 of April 15, 1999 amending and adding certain provisions of Law No. 023-92 of August 20, 1992 on the regulations for the judiciary;

  • - Law No. 4-2010 of June 14, 2010 on the protection of children in the Republic of Congo;

  • - Law No. 5-2011 of February 25, 2011 on the promotion and protection of indigenous populations in the Republic of Congo.

302. Judicial governance refers to a legal and judicial system in which laws are clearly defined and uniformly applied by an objective and independent judiciary. The judicial branch must in particular ensure respect for the law and for citizens’ rights as well as ensure the movement of people and goods in line with the public service function. According to the Congolese Constitution of January 20, 2002, judicial power is exercised by the Supreme Court, the Court of Accounts and Budgetary Oversight, the Court of Appeals, and other national jurisdictions.

Achievements in Recent Years

303. Under the terms of Article 1 of Law No. 19-99 of April 15, 1999 “justice is rendered in the name of the Congolese people” by a single court system. For various reasons and with the exception of the military and administrative courts that have not yet been established, the judicial map of Congo includes 103 jurisdictions, distributed as follows:

  • Supreme Court (1).

  • Court of Accounts and Budgetary Oversight (1).

  • Court of Appeals (5) - (Brazzaville, Pointe-Noire, Dolisie, Owando, and Ouesso).

  • District Courts (17) sixteen (16) of which are operational (Brazzaville; Pointe-Noire; Dolisie, Sibiti; Madingou; Mouyondzi; Djambala; Oyo, Owando, Ouesso, Impfondo, Ewo, Mossaka, Gamboma, Mossendjo, and Kinkala) and one that is not operational due to lack of facilities (Kindamba).

  • Lower Courts (74) six (6) of which are led by magistrates and are operational: four (4) in Brazzaville (Poto-Poto; Makélékélé-Bacongo; Mfilou; and Talangaï) and two (2) in Pointe-Noire (Tchinouka and Tié-Tié). Some of the other lower courts are led by magistrates, clerks, and secretaries appointed by the first presidents of the Courts of Appeal, while others are awaiting the assignment of personnel.

  • Labor courts (2), Brazzaville and Pointe-Noire.

  • Commercial courts (2), Brazzaville and Pointe-Noire.

  • Children’s courts (2), Brazzaville and Pointe-Noire.

This distribution is intended to ensure minimum coverage by judicial services throughout the country.

304. Congo has also implemented significant legal and judicial reforms by enacting laws on the protection of children and the promotion and protection of the rights of indigenous peoples. Significant efforts have been made in terms of judicial infrastructure and equipment. The country has also implemented important legal and judicial reforms with respect to Congo’s integration in the Organization for the Harmonization of Business Law in Africa (OHADA).

The Main Challenges to be Addressed

305. Beyond the aspects inherent to the organization and management of judicial administration, the number of cases tried seems to have barely improved, despite the increase in judicial personnel. Under these conditions, the system is hard-pressed to respect and recognize the protection of private property and citizens’ rights in a timely way.

306. In addition, legal and judicial procedures and provisions are not well publicized, making citizens vulnerable in their dealings with the courts. The lack of law or justice centers makes it impossible to fill in these gaps.

307. Moreover, prison facilities suffer from a shortage of infrastructure and qualified personnel. In effect, many prison administration tasks are now carried out by the police and gendarmes rather than by trained personnel. In addition, there is no policy on the social and professional reintegration of prisoners.

308. Finally, Congo still shows significant weaknesses in the area of judicial security for private operators. The resulting perception of a lack of security is a significant obstacle to improving the business climate and the development of both domestic and foreign private investment, which are so essential to transformation of the economy.

Security and National Defense Governance

309. Defense and security missions are performed by the Congolese armed forces, the gendarmerie, and the national police – the three components of Congolese law enforcement. This sector has experienced significant development as changes have occurred in the world strategic context. Thus, the collapse of the socialist bloc, the end of the cold war, and globalization have led to a redefinition of national and international approaches to the issues of defense and security that once focused on the defense of territorial integrity, so that the defense and security sector is now focused on the management of new threats produced by:

On the domestic level: (i) the emergence of non-state armed groups, (ii) the problems of rapid urbanization and governance deficits, (iii) organized crime, (iv) the breakdown of the socioeconomic fabric (unemployment and poverty);

On the international level: (i) international terrorism; (ii) fundamentalism and religious fanaticism; (iv) transnational crime; (iii) armed conflicts in neighboring countries; (v) cybercrime; and (vi) uncontrolled immigration.

Principal Achievements

310. Following these sociopolitical events, the unity of the army, police, and the gendarmerie was reestablished. From that point on, they were able to perform their primary missions of securing persons and property. Providing law enforcement with equipment and hiring new personnel made it possible to appreciably reduce insecurity and organized crime groups. The participation of specialized defense units in foreign peace-keeping operations helped to strengthen regional and subregional cooperation in the area of security and defense (FOMUC, MICOPAX).

  • - With respect to national defense, nine military defense zones and two military regions were created;

  • - The gendarmerie is organized into seven regions. Besides the mobile gendarmerie corps and specialized teams (railway and air), the territorial gendarmerie has an effective presence in the country’s 86 districts;

  • - The national police has 12 departmental headquarters and six central police stations (Brazzaville, Pointe-Noire, Dolisie, Nkayi, Mossendjo, and Ouesso) and [text missing…]

This defense and security architecture is responsible for surveillance of the country, as well as for local protection for citizens.

The Main Challenges to be Addressed

311. With the new domestic and international sociopolitical context, it should be recognized that the defense and security subsectors will now be facing new challenges, namely:

- continuous adaptation to new types of crime and delinquency (consistent with strategies, material and human resources);

- more productive professionalization of the defense and security corps;

- Involvement of defense and security forces in development work (building infrastructure, producing goods and services, training young people, etc.)

Economic and Financial Governance

Historic Overview

312. During the first decade after Congo gained international sovereignty in 1960, the country experienced a short three-year period marked by a free-market-oriented economic development strategy and the launch of large projects designed to establish the foundation for the country’s sustainable economic development. In contrast, the second part of that decade was characterized by government interventionism in the spheres of production and commerce, an interventionism that allowed the creation of nearly fifty state-owned enterprises and offices.6

313. The following decade (1970s) was marked by the ideology of “ownership” of the national economy as reflected initially in a series of nationalizations, followed by difficulties managing a vast government economic sector in the second phase. Several companies were in fact nationalized in the early 1970s. In 1973, the consecration of petroleum as the country’s primary export commodity coincided with the gradual but constant decline in agricultural exports as well as the exploitation and processing of forests, representing the first crisis in this subsector, particularly with the withdrawal of Israeli developers and industrialists.7

314. In the mid-1970s, the Congolese economy had to confront its first great post-independence crisis. The Congolese government’s difficulty bringing in budgetary revenues for financial years 1975 and 1976, primarily based on petroleum revenues, and the stagnant management of state-owned enterprises, took on the dimensions of an unprecedented crisis. During the second half of the 1970s, the government became the dominant economic actor with nationalizations and government-created companies and jobs. However, the preceding crisis of “interventionist government” would expand to include the country’s political and institutional sphere until the end of the decade.

315. During the 1980s (third decade) two distinct periods could be noted as well. The early part of that decade was marked by the adoption of two interim plans in 1980 and 1981, in preparation for the launch and implementation of the five-year plan (1982-1986). It should also be noted that a Conference of State-Owned Enterprises was organized in 1980 to redefine the management framework for state-owned enterprises and the powers to be granted to their Boards.

316. The second period in the 1980s was characterized by the simultaneous collapse of petroleum barrel prices and the U.S. dollar, further impeding the successful conclusion of the five-year plan (1982-1986). This period was characterized by a worsening of the external imbalances and the financial situation of the government and the public sector at large, an increase in foreign debt service, and cumulative foreign payments arrears,8 justifying the adoption of structural adjustment plans, the restructuring of some state-owned enterprises, and abandonment of some government offices.

317. The 1990s is when government interventionism fell into disrepute and market-oriented management of the economy was restored. This choice entailed costs that had to be assumed in a tense context of public finances and the devaluation of the CFA franc in January 1994 and against the backdrop of recurring social and political tensions. During this period, public debt service became unsustainable. Despite the pronounced decline in economic activities, particularly in the productive sector, the renegotiation of petroleum contracts in 1995, and the development of new oil fields (notably in Nkossa and Kitina) during the second half of the decade allowed the government to improve the level of its revenues, and it did so before, during, and after the sociopolitical events of 1997.

318. The 2000s are characterized by relative stagnation in per barrel oil prices initially, followed by a sustained recovery two years later and continuing up to 2010. Petroleum operations thus allowed the government to garner substantial resources with which to undertake the in-depth restructuring of its economy by developing infrastructure and promoting the diversification of economic activities.

Table 1.Republic Of Congo: Key Macroeconomic Indicators: 1960-2010
Ave. 1960-1969Ave. 1970-1979Ave. 1980-1989Ave. 1990-1999Ave. 2000-200520062007200820092010
GDP, annual growth as a %4.05.56.80.84.76.1-1.65.67.68.8
Non-petroleum GDP, annual growth as a %7.46.06.65.33.96.4
Petroleum GDP, annual growth as a %-0.66.8-17.27.416.113.7
GDP per capita, annual growth as a %1.22.33.6-1.42.34.0-3.43.75.66.0
Inflation1.0-3.51.46.52.77.35.0
Agriculture (% of GDP)20.115.610.010.58.68.79.59.59.49.2
Forestry and logging2.42.52.52.41.31.2
Current account (% of GDP)-14.4-13.1-19.410.98.4-15.94.8-28.2-14.2
Trade balance (% of GDP)-31.7-17.7-0.52.925.418.523.226.321.031.8
Budget balance, including grant (% of GDP)1.8-7.02.017.011.026.95.818.8
Debt at concessional rate (% of GDP)26.129.878.955.639.935.729.534.6
Debt at non-concessional rate (% of GDP)29.3100.4144.089.744.932.020.818.0
Source: STP/DSCERP, World Bank Data, World Development Indicators (http://databank.worldbank.org) and National Authorities
Source: STP/DSCERP, World Bank Data, World Development Indicators (http://databank.worldbank.org) and National Authorities

Box 2.Governance and Leadership: Lessons from Countries that have Emerged Successfully

1. Since 1950, 13 developing countries (Botswana, Brazil, China, Hong Kong, Indonesia, Japan, South Korea, Malaysia, Oman, Singapore, Taiwan, and Thailand) have experienced average annual growth of 7 percent or more over a period of 25 years or more. At this rate of growth, an economy doubles its size (nominal GDP) every decade. These 13 countries have five similar characteristics. They have (i) been able to integrate themselves in the global economy and exploit the advantages of the international market; (ii) maintained macroeconomic stability; (iii) accumulated abundant financial resources and achieved very high savings and investment rates; (iv) allowed their domestic market to allocate resources; (v) had committed, credible, and capable governments.

2. Economic growth requires conditions that go beyond the economy. It requires committed, credible, and capable governments. The 13 countries with strong and rapid growth built their economic prosperity on solid political foundations. Their political decision-makers quickly understood that growth does not miraculously appear all of a sudden. It must be carefully chosen as the country’s primary objective. For example, in Singapore, according to a speech by Minister Goh Chok Tong: “the pursuit of the objective of growth has been a principle of the country’s policy for the last 40 years.” Singapore’s government and its institutions constantly seek to anticipate the actions needed to sustain the momentum of Singapore’s economy.

3. Several developing countries’ governments have promoted “political acceptance” of the idea that economic growth will follow. Others have adopted economic reforms solely for the sake of adopting reforms. When growth did not follow, they did not try other reforms. In contrast, in the 13 countries with rapid growth, political decision-makers understood that successful development required a commitment lasting for several decades. Even at relatively high growth rates of 7 to 10 percent, it takes decades for a country to go from a low-income country to a middle-income country. During this long period of transition, the country’s citizens must forego consumption today for higher living standards tomorrow. The public can accept this policy only if decision-makers clearly communicate their vision of the future and a clear strategy for achieving high levels of growth. They must be credible and considered thrifty and the population must believe their promises of future rewards.

4. Their promises must also be inclusive so that citizens can be confident that they and their children will share in the fruits of growth and development. In Botswana, for example, Seretse Kama ceded the rights over his own tribe’s diamond mines to the government. This gave each tribe in Botswana a more significant share in the success of the government.

5. Other governments have established an implicit or explicit contract favoring growth, by offering health and education services and sometimes by redistributing national wealth. These contracts have been maintained, at least in spirit. Without these political foundations, sustaining growth policies is very difficult, or impossible.

6. Such leadership requires time and patience and a long-term perspective. In many cases, rapidly growing countries have been dominated by a single party that could expect to retain power for several decades. In contrast, in a multi-party system, governments look only to the next election. Nonetheless, democracies can experience moments of strong growth. Today’s India and Australia are examples of this. Australia’s Productivity Commission was established by an act of Parliament in 1998. As an independent institution, it regularly evaluates the government’s regulations and microeconomic policies, analyzes long-term growth prospects, and helps bring together the principal economic actors to design economic reform proposals. Ireland’s Social Partnership, which grew out of the country’s economic stagnation during the 1980s, brings together employees, unions, and the government every three years to rethink and renegotiate the country’s economic strategy. Once ratified, these deliberations become the economic policy framework for the next three years.

7. When committed to the objective of strong growth, governments must be pragmatic in their pursuit of that growth. Political decision-makers who have succeeded in sustaining strong growth were prepared to try, to fail, and to learn from their defeats. Singapore, for example, did not establish a policy of opening up economically to foreign trade until after it had tried an economic policy that turned inward and encouraged domestic companies to compete with industrial imports (import substitution policy). In China, Deng Xiaoping described this approach as “crossing the river by jumping on stones,” a phrase often repeated in China.

Source: STP/DSCERP in Summary of World Bank Document.

Recent Economic Management: The Performance has Clearly Improved

319. There are two important aspects to economic governance:

  • How the State manages itself (management of government and the public sector)

  • How the State manages the economy and the private sector.

“How the State manages itself” can be appreciated in different areas: (i) management of the public finances; (ii) management of human resources, government investments and government property; and (iii) macroeconomic management and strategic planning.

“How the State manages the economy and the private sector” can be assessed through different policies and actions to reform and regulate markets, to procure essential public goods and services, and to create an administrative and legal climate conducive to a flourishing private sector

Management of the public finances

320. Accountability for fiscal management is overseen by the internal and external control bodies. In Congo, ex ante internal administrative control is entrusted to the Directorate-General of Budgetary Control (DGCB) and the Directorate-General of Budget (DGB), while ex-post internal control falls to the Inspectorate-General of Finance (IGF). The Office of Audit and Budgetary Discipline and the Economic and Finance Committees of the National Assembly and the Senate oversee internal controls. The Inspectorate-General of Government supervises all controls in the executive branch.

321. Revenue collection is the responsibility of the Directorate-General of the Treasury (DGT). Revenues assessed by the Directorate-General of Taxation and State Property (DGI) and the Directorate-General of Customs and Indirect Duties (DGDDI) are recovered directly by a receiving officer who deposits them on a daily basis in the treasury.

322. The quality of ex ante internal control has long been affected by the lack of representation of the DGCB in the Government Procurement Regulatory Authority and the lack of a computerized link between the file kept by government agents and the file showing the balance. Moreover, ex post internal control is hindered by a shortage of financial resources and the poor quality of human resources assigned to the IGF. The elimination of unannounced controls and inspections has also reduced the effectiveness of ex post internal control.

323. Major reforms have been undertaken to strengthen both internal and external control over fiscal management. In particular, a new budgetary accounting terminology has been adopted, based on the functional classification and consistent with international rules and standards (International Financial Statistics methodology). The objective is to facilitate consistency between budgetary allocations and the government’s strategic priorities.

324. As well, a Government Action Plan for Fiscal Management (PAGGFP) and another concerning improved management of government investments (PAAGIP) have been adopted with a view to reinforcing government transparency, efficiency and performance. The action plan for government investment management calls for improving the preparation process, cost estimation, and the selection of new projects, as well as bringing greater efficiency and transparency to execution of the government’s capital budget. These plans are designed to: (i) reinforce the capacities of the research and planning directorates (DEP) of ministries and institutions; (ii) improve the budget preparation process; (iii) streamline and rationalize the expenditure circuit and unify the payment circuits. These two plans provide a solid foundation for introducing fundamental reforms to the system for managing the public finances.

325. A new government procurement code was promulgated in May 2009. It establishes the regulatory and institutional framework for public procurement in Congo, consistent with best international practices. The code will help to optimize the utilization of resources earmarked for development, by ensuring competition and transparency.

326. At the same time, significant innovations have been introduced in recent years to strengthen fiscal management. These include:

  • Introduction of SYSTAF and the Single Identification Number (Numéro d’Identification Unique, NIU). The tax administration can now record all taxpayers and create a single file for them. This reform has served to expand the tax base.

  • Introduction of the ASYCUDA software in the customs administration, for better control of the tax base and of customs revenues.

  • Improved transparency and governance in the oil sector, via quarterly certification of oil revenues and their transfer to the treasury within 45 days following the lifting of oil shipments. Data on oil production and revenues are regularly published at the Internet site of the Ministry of Finance, Budget and the Public Portfolio.

  • Adoption of the master plan for computerizing the Finance Ministry, more specifically the revenue collecting agencies (régies financières). The objective is to exert greater control over the tax base and over government revenues.

327. Nevertheless, judicial and parliamentary supervision over fiscal management still betrays some technical weaknesses. These weaknesses have also been identified in the Directorate-General of Budget and of the Treasury, as well as in the Directorate-General of Public Accounts (DGCP), when it comes to producing administrative and management accounts for preparing the budget review act at the end of the fiscal year.

Public debt management

328. The government has created a National Public Debt Committee (CNDP) in order to monitor the country’s indebtedness more closely and avoid a return to the over-indebtedness of past years. It is widely acknowledged that the weakness of accountability mechanisms with respect to borrowing and public debt management, together with insufficient budgetary discipline, have caused the country’s over-indebtedness and problems with speculators (“vulture funds”). To address this weakness the authorities promulgated a decree (no. 2008-56 of March 31, 2008) instituting a National Public Debt Committee (CNDP) to monitor the debt and report on public debt management.

329. The creation of the CNDP is also consistent with the CEMAC regulation (12/07-UEAC-CM-15) formalizing the benchmark framework for government borrowing policy and public debt management in member states. Among other tasks, the CNDP is to prepare a national public debt strategy consistent with the country’s development objectives and its financial capacity. This strategy is now annexed to the budget law as a way of strengthening parliamentary control over borrowing mechanisms and conditions.

330. Despite these shortcomings, Congo has made significant reforms that have allowed it to reach the completion point and benefit from significant debt relief. Thanks to the solid economic performance of recent years, the debt relief obtained under the HIPC initiative, and the pay-down of domestic debt, Congo has reduced its debt considerably and has improved its sustainability over the medium term. This good performance can be seen in Congo’s debt ratios. Table 2 shows that, over the period 2004-2010, the debt stock has clearly declined as a proportion of GDP from 198.7 percent to 23.8 percent, and debt service has dropped from 16.0 percent to 3.4 percent of exports. The following table presents the country’s situation, compared to other African countries, mainly in the subregion.

Table 2.Public Debt of Congo and Comparable Countries
2004200520062007200820092010
Petroleum exporting countries57.135.617.718.017.921.721.6
Excl. Nigeria64.046.327.025.126.129.827.2
Angola55.342.520.620.831.536.335.0
Cameroon61.451.815.711.99.510.612.1
Congo, Rep. of198.7108.398.898.068.157.223.8
Gabon65.253.842.143.220.926.425.1
Equatorial Guinea6.23.01.61.10.75.17.5
Nigeria52.728.611.812.811.615.217.3
Chad34.233.629.626.023.630.532.6
Source: IMF Africa Department database (September 16, 2011) and World Economic Outlook (September 16, 2011)
Source: IMF Africa Department database (September 16, 2011) and World Economic Outlook (September 16, 2011)

Government investment

331. The management of government investments remains a major challenge that the government must address to ensure the success of the country’s development strategy. In comparison with other countries, Congo devotes considerable resources to public investment, but the quality and effectiveness of that investment is still well below that of the best performers in the region. Table 4 confirms that Congo’s public investment rate is considerably higher than the average for sub-Saharan African countries. However, effectiveness falls short of the average in those countries. This point is confirmed by other international benchmarks. For example, governance indicators show that, when it comes to government effectiveness, Congo is still at the bottom of the scale in international rankings.

Table 3.Comparative Macroeconomic IndicatorsSorry–the quality of the source document is insufficient to render this image into text.
Table 4.Comparative Agriculture Potential of Congo and Selected CountriesSorry–the quality of the source document is insufficient to render this image into text.

332. The analyses point to a number of causes underlying the investment quality problem, in particular shortcomings in: (i) the project planning process (identification, evaluation, validation); (ii) budgetary choices (aligning resources with development projects); (iii) and, most importantly, investment execution, in both financial and physical terms, and the monitoring of that execution.

333. The government is aware of these shortcomings and has instituted a program to strengthen the planning and management of government investment. The key actions already taken in this context include:

  • Adoption of decree no. 2009-230 of July 30, 2009, clarifying and simplifying the expenditure circuit and the respective roles of the principal players. That decree: (i) delegates to ministries the responsibility for committing and verifying expenditures; (ii) establishes budget control units within ministries to supervise and approve commitments and verifications; (iii) eliminates sign-off by the budget controller after the payment order (ordonnancement) is issued; and (iv) leaves the Directorate-General of Budget with only the task of issuing the payment order.

  • Adoption in 2009 of a new system for evaluating and selecting investment projects, designed to ensure that new projects financed from the budget are consistent with the objectives of the PRSP and meet clear criteria of technical and financial feasibility.

334. There have been some difficulties, however, in implementing these reforms, due to capacity problems. While decree no. 2009-230 gives the line ministries responsibility for committing and verifying expenditures, there are a number of gaps in the system that can lead to inefficiency. As well, ministries and institutions have difficulty in conducting project studies and drawing a link between these projects and the PRSP objectives.

335. Lastly, introduction of the Medium Term Expenditure Framework (MTEF), the Priority Action Programs (PAPs) and objective-based program budgets in the ministries must also allow the framework for their implementation to be rationalized. The PAP approach makes it easier to identify and plan for ministries’ human resource needs vis-à-vis priority program requirements. These needs are programmed in the PAPs and reflected in the line ministries’ MTEF. To the extent that these needs form the basis for budgetary allocations under the MTEF, the MTEF process will help align recruitment with sectoral strategy priorities. This will help to rationalize the entire recruitment process in the civil service, in line with national strategic priorities.

Management of government property

336. Congo still has no system of accounting for public assets, but the government has created two ministries in charge of government property (domaine public) and state assets (patrimoine de l’Etat). Those ministries are responsible for inventory, accounting and management of State assets, but they are not yet fully operational in carrying out their missions. The authorities are well aware of this and are working to resolve the problem so that the State will have a sound basis of information on its assets and their status.

Strategic planning

337. Congo has made significant progress with strategic planning in recent years. Key actions include: (i) adoption and execution of the first-generation Poverty Reduction Strategy Paper (PRSP) in March 2008; (ii) implementation of the MTEF in 2009 for better alignment of the budget with the PRSP; (iii) reorganization of the Investment Projects Evaluation Center (CEPI) to strengthen the project planning and evaluation process; (iv) reinforcement of technical capacities for monitoring and evaluating PRSP programs, including physical and financial execution of investments; and (v) introduction of results-based management (RBM).

338. With the first PRSP, the Republic of Congo had for the first time a coherent and credible multisectoral strategy for integrated development. The general objective of the strategy was to improve the macroeconomic framework in a sustainable manner and to strengthen the social sector, so that Congo could move toward achieving the Millennium Development Goals (MDG). The PRSP was a prerequisite for achieving the completion point under the Heavily Indebted Poor Countries (HIPC) Initiative.

339. In this context, the authorities have also made great efforts to reorganize and reinforce the entire process of program execution and monitoring. This initiative is a response to the shortcomings detected in the coordination and monitoring of activities under the strategy.

340. This problem is common to nearly all countries of sub-Saharan Africa. For example, PRSP evaluations have shown that in most cases it is not the quality of the strategy documents or other programs but rather the lack of adequate execution and monitoring capacities that has undermined the effectiveness of national strategies. In this respect, Congo has been no exception. To a large extent, the disappointing performances are due to the problems of resource allocation (budgetary alignment) mentioned above, but also to problems of organizational, execution and monitoring capacity.

341. To address this challenge, the Congolese authorities have made great efforts to strengthen the execution mechanism. The key move in this area was certainly the establishment of the DGGT (General Commission for Large-Scale Projects) to carry out major government projects of national importance. The DGGT has executed nearly 80 percent of all government investment over the period 2008-2010.

342. In the course of its efforts to resolve execution problems through a “concentrated and centralized” approach, the government has become increasingly aware of the merits but also the limitations of this approach. It is important to improve communication between the assistant project manager and the contracting authority (sectoral ministry) in the monitoring and evaluation of the work. Indeed, the ministries (DEP) often highlight information gaps with respect to the progress of their work entrusted to the DGGT.

Moreover, the government has engaged in discussions to reassess the situation and refine the criteria for DGGT intervention in capital project execution

Moreover, the government has engaged in discussions to reassess the situation and refine the criteria for DGGT intervention in capital project execution.

Box 2.The General Commission for Large-Scale Projects (DGGT)

1. Created in 2002, the DGGT is today governed by decree no. 2009-158 of May 20, 2009, which reorganized it. It is the government’s focal point for carrying out large-scale projects. It reports to the President of the Republic and has responsibility for investment projects in the amount of 250 million or more.

2. The DGGT is an administrative and technical agency. Government departments are required to delegate to the DGGT the work of preparing, tendering and monitoring contracts for government procurement or the concessioning of public services beyond the threshold indicated above. In this capacity of “owner agent” (maître d’ouvrage délégué), the DGGT is responsible for:

  • Finalizing procurement programs, together with the project owner.

  • Organizing and calling for bids for government procurement or public-service concessions.

  • Reviewing and examining bids for government procurement or public-service concessions.

  • Drafting, negotiating and managing contracts.

  • Assessing the technical and financial specifications of contracts, as well as their execution statements.

  • Organizing and conducting the acceptance of works, goods or services and overseeing the performance of public-service concessionaires.

3. The DGGT thus plays the role of a horizontal or cross-sector administration, mobilizing energies within all ministries to achieve objectives of common interest. The projects carried out by the DGGT are financed from the capital budget of the various ministries and institutions.

4. Large-scale projects handled by the DGGT include:

  • the construction of airports at Dolisie, Owando, Pointe-Noire and Impfondo;

  • construction of the second runway and air terminal at the Brazzaville Airport;

  • completion of work on the Ngoulonkila-Lékana section of highway RP 26, Ngo-Djambala-Lékana;

  • construction and paving of about 46 km of the Bouansa - Mouyondzi highway;

  • construction of 84 km of railway 1998-2009;

  • construction 2004-2009: Moukondo-Nkombo Highway; 2nd exit North Brazzaville; bridge over the Tsiémé and road; bus station at Dolisie;

  • construction of the Port Autonome de Pointe-Noire;

  • construction of the Imboulou dam; Impfondo power station; M’Pila power station;

  • water supply at Likouala; rehabilitation of the Djoué plant;

  • construction of the port at Lékéty;

  • dredging at Mossaka and de-silting of the main port of Brazzaville and secondary ports;

  • rehabilitation of high-voltage transformer stations at Tsélampo, Mongo Kamba, N’goyo and the Djoué dam;

  • construction and outfitting of the national radio and television center;

  • construction of the radio/TV station at Oyo;

  • rehabilitation of stadiums: Franco Anselmi and M’voumvou at Pointe-Noire, Massamba-Debat at Brazzaville and Pont at Dolisie;

  • construction of the municipal stadium at Owando and the Oyo gymnasium;

  • construction of the Oyo general hospital and the Loandjili hospital;

  • construction of prefecture or sub-prefecture headquarters in the départements of Kouilou, Niari, Likouala, Oyo, Dolisie, Impfondo, Cuvette-ouest, Owando.

Source: ST/DSCERP and INT-DEC.

343. At the same, aware of the growing importance of foreign investment for transforming the economy, the government has put in place the National Investment Commission (CNI) to track private investment plans and projects, under the coordination of the Ministry for Economy and Planning. Under this initiative, an inventory of investment intentions will be compiled and the introduction of investors into the Congolese economy will be facilitated. The initiative reflects the importance that the government places on foreign investments as a channel for transmitting new technologies, injecting significant financial resources into the national economy, and opening up international markets for Congolese products. This initiative will also improve the programming of the government’s own actions in support of these investments, so that public investment can be an effective complement to private investment for accelerated the transformation of the Congolese economy.

344. All these developments with respect to strategic planning and building capacities for execution and monitoring of the strategy have contributed to implementation of PRSP 1. They have been used for preparation of the PND and they will be reinforced and put to work for its effective execution.

Macroeconomic policies

345. Beyond administrative management, economic governance is reflected in the quality of macroeconomic management. Here, Congo has made remarkable progress during the last decade. The government has resolutely embraced structural reforms in order to stabilize the country’s macroeconomic situation. It was in this context that it implemented the macroeconomic program supported by the IMF under the Poverty Reduction and Growth Facility (PRGF) in the context of the HIPC initiative. The program brought Congo to the completion point in January 2010. It will continue with the support of a new instrument, the Extended Credit Facility (ECF).

346. Implementation of this aspect, together with other components of the poverty reduction strategy, has allowed Congo to consolidate the macroeconomic framework. As proof, economic growth has been robust in recent years, averaging around 7.0 percent between 2008 and 2010, despite volatility in the oil sector. In particular, the non-oil sector has produced very encouraging results, with average growth of around 5.2 percent over the same period, despite adverse world economic conditions.

347. Similarly, the public finances have been cleaned up. Non-oil revenues have been rising steadily, from 22.7 percent of GDP in 2008 to 25.5 percent in 2010. Despite the launch of the PRSP programs, spending increases have been relatively restrained in GDP terms, thanks to control over operating expenses, and despite the higher capital outlays occasioned by implementation of the PRSP.

348. This pro-growth fiscal policy has been combined with a prudent monetary policy. As a result, inflation has been kept under control (… percent) over this period, despite higher prices for food and oil products.

Structural Reforms and Strengthening the Business Climate

349. In its approach to economic management, the government has also introduced structural reforms intended to liberalize and regulate markets, together with policies to improve the business climate and promote the private sector. Economic operators had long complained of an environment characterized by bureaucratic red tape, corruption and quasi-fiscal levies that was discouraging business and hindering the competitiveness of domestic firms. The government is well aware of these ills and is facing them squarely. To this end, it has instituted a series of measures to reduce transaction costs and improve the business climate.

Key sectors

350. The government has taken a series of steps to reduce transaction costs at Customs. The main actions here included: (i) institution of the “one-stop maritime window” (GUMAR) for integrated handling of commercial operations at the Pointe-Noire customs station, together with measures to streamline and simplify customs clearance procedures; (ii) strict management of electronic manifests and a scanning device for container inspection and risk management.

351. To promote competition and reduce distortions, the government has eliminated exceptional exemptions and has computerized exemption granting and management procedures. It has also reviewed the customs privileges contained in government contracts, conventions and other texts. As well, the government has applied CEMAC Act 298 concerning establishment agreements in the oil industry, including subcontractors.

352. In the mining and oil sector, the government has devoted considerable effort to improving the transparency of natural resource management, especially in the context of its membership in 2004 to the Extractive Industries Transparency Initiative (EITI). This action was followed by the establishment of appropriate national structures, certification of oil revenues, and audits of oil company accounts (oil cost audits).

353. Improved management of the oil sector is now reflected in better performance by the two key national companies in the sector, Société Nationale du Pétrole du Congo (SNPC) and CORAF. In particular, the SNPC reforms have instituted analytical accounting in that company, which has improved its earnings results.

354. The government has adopted an action plan for marketing Congolese oil in line with international standards. A program of reforms and upgrades has been instituted to enhance the capacities and performance of CORAF. The government has also taken steps to clean up the accounts of that enterprise, including application of a transfer price for crude oil that will gradually balance its accounts while keeping the pump price accessible to Congolese consumers. As a result of these reforms, recent years have seen a clear improvement in CORAF’s earnings and in coverage of domestic market needs. These reforms and good performances have also translated into a clear improvement in government mobilization of oil revenues. In fact, the share of oil revenues in total government revenues was consistently above 80 percent between 2008 and 2010.

355. In the financial sector, the government has made major reforms to clean up credit institutions and insurance companies. Those reforms have also improved the operating conditions of micro-finance institutions. Liberalization in the banking sector has sparked the entry of new credit institutions and greater diversification of banking activities. Specifically, the government has instituted reforms to eliminate the ceiling on lending rates and to make lending conditions more transparent (in particular through publication of the total cost of loan offers, including fees and commissions). The government has also succeeded in expanding the use of banking services by paying salaries and pensions via direct deposit and eliminating account charges.

356. The government has defined a plan to reform the insurance and reinsurance market. The public operator (Assurances et Réassurances du Congo, ARC) has been restructured in accordance with code of the Inter-African Conference on the Insurance Market (CIMA) and the rules of the Regional Reinsurance Company (Compagnie Commune de Réassurance des Etats membres de la CIMA, CICA-RE). All these actions should help improve government intervention, the quality of economic and social services (transport, water, electricity etc.), and the business climate.

Management of state-owned enterprises

357. Major steps have been taken to reinforce accountability in the management of state-owned enterprises. The government created the National Management Center (CENAGES) by decree no. 49/78 of December 18, 1978 and the National Audit Office (Commissariat National aux Comptes, CNC) by law no. 13/81 of March 14, 1984 creating the Charter of State-Owned Enterprises.

  • CENAGES is the government instrument for promoting the development of modern management techniques in state-owned enterprises, semipublic enterprises, and public organizations and establishments.

  • The CNC has the task of reviewing and auditing the operations, accounts and training programs of state-owned enterprises in the fields of internal control, accounting control and organization.

However, these two agencies have performed poorly in carrying out their missions and they will have to be thoroughly overhauled, in light of the new free-market context, if they are to make a meaningful contribution.

358. In addition, the “accountability” obligation of private and public enterprises alike demands rehabilitation of a government agency to certify their accounts for various purposes (taxation, banking, legal etc.).

359. On this point, it may be noted that the legislative and regulatory framework for private-sector accounting in Congo is governed by OHADA provisions. The government has reformed the legal and judicial mechanism and has harmonized the commercial code with the OHADA treaty. The powers of the OHADA National Commission have been reinforced as have those of the commercial courts.

360. However, the absence of an officially recognized college of accountants and the ineffective organization of the Association of Professional Accountants (APC) represent obstacles to the preparation of reliable financial statements. Efforts are needed, then, to strengthen the institutional environment for the accounting profession by establishing a College of Accountants, improving initial and ongoing training for accounting professionals, and making private-sector operators aware of the need to prepare accounting and financial statements.

Infrastructure services and private sector support programs

361. Despite the reforms described above, the business climate is still not very conducive, as indicated by Congo’s low rating against international criteria. It is a demonstrated fact that it is not easy to start up and grow a business in Congo, or to invest there, not because of the lack of economic opportunities but because of an environment that is still unattractive and difficult to navigate.

362. Aware of these weaknesses, the government has undertaken major structural reforms as well as investments in essential infrastructure and services for improving the business climate and encouraging investment. These programs are backed by the country’s development partners. Thus, the World Bank is supporting government initiatives under the Economic Diversification Support Project (EDSP), focusing on its component to foster public-private dialogue and reform the investment climate. The African Development Bank is also involved in this effort through the Institutional Support Project for Improvement of the Business Climate and Economic Diversification of Congo (PACADEC). These projects, implemented concurrently and coordinated by the government, are designed to strengthen the institutional framework for supporting business and investment. In 2010 they led to creation of a high-level council for public-private dialogue (HCPP), a forum for coordination between public and private stakeholders. The council meets once a year, and reports to the President of the Republic.

363. In the transport sector in particular, the assistance provided by the third component of the PADE project for reforming the CFCO (the Congo-Ocean Railway) should improve the supply of transport infrastructure services and reduce access costs. Government infrastructure investments, including construction of the Imboulou hydroelectric station, the Pointe-Noire gas fired power station, the Pointe-Noire-Brazzaville highway (of which the Pointe-Noire-Dolisie section is completed), and various other projects are part of this move to improve the business climate.

Combating corruption

364. The government has undertaken targeted efforts against corruption as well as against money laundering and terrorism financing. In this context, it has created the National Commission to Combat Corruption, Fraud and Misappropriation (CNLCCF), the Anticorruption Observatory, and the National Financial Investigation Agency. The Commission has the mandate to formulate, coordinate and implement the national anticorruption strategy, while the Observatory was created to oversee and assess that strategy’s implementation. The Agency is responsible for investigating financial crime. The institutional and regulatory framework for combating corruption, fraud and misappropriation is governed by the anticorruption law adopted in July 2009. An action plan was adopted in August 2009. It provides for a series of measures to curb the risks of corruption in the five most exposed sectors: oil production and marketing, forestry, fiscal management, justice and police, and the social sectors.

The Main Challenges

365. As has been repeatedly noted, improving governance in all its forms, and particularly in economic management, is imperative for the modernization of Congolese society, the transformation of the economy, and the emergence of Congo as envisioned in “Le Chemin d’Avenir”. The government is well aware of this and intends to redouble its efforts in pursuit of its program to strengthen governance.

366. Specifically, the government will step up its efforts to: (i) improve delivery of the public services essential for building the infrastructure needed to support economic activity; (ii) modernize the management of state-owned enterprises and public administration, and delegate certain public services to private initiative while reinforcing accountability in public services; (iii) enhance the efficiency and effectiveness of government agents and interventions through better management of human resources, improved strategic planning and budgeting, and stricter execution and monitoring of activities; (iv) improve the business climate and boost the economy’s competitiveness through liberalization and effective regulation of factor markets as well as goods and services markets, and consolidate the achievements of public-private dialogue. The key strategies and programs in the area of economic governance are described in chapters 7 to 9 of this paper.

Chapter 3. Growth and Employment

367. Even with the best efforts at redistribution, there will be no significant decline in poverty and vulnerability if economic growth remains weak or volatile. Recent experience in emerging countries such as Brazil, Russia, India and China (the “BRICs”) shows that poverty reduction has resulted from strong and sustained growth over a long period. Similarly, a recent World Bank study showed that the 13 countries that have seen strong growth over a long period, i.e. an annual growth rate of 7 percent over at least 25 years, have also succeeded in reducing monetary poverty, and in some cases eradicating it, and making significant improvements to people’s living conditions. The lesson is clear: strong, sustained, job-creating growth is necessary to raise living standards and reduce poverty at a fast pace. Despite problems of inequality in some cases, performances of this kind have been shown sufficient at least to reduce monetary poverty and strengthen social development.

368. The government has paid attention to these outcomes, and for this reason the acceleration of growth stands at the core of its development strategies. Indeed, it is aware that this objective will not be achieved unless the country can diversify the sources of growth, in favor of the non-oil sector, and ensure the further processing of primary products, in favor of industry and services (upstream and downstream). This “integrated” vision of diversification is clearly set forth in the Chemin d’Avenir, which places the emphasis on modernization of society and on industrialization as the twin pillars of the strategy for Congo’s emergence.

369. However, the government recognizes that for the time being and for some years to come, oil will remain the primary source for financing of the state budget, and hence of economic growth. Mining resources will be progressively added to this base: iron in particular has a very promising outlook for Congo. The government is well aware, however, that these resources are hostage to world price fluctuations, and they could dwindle as wells and quarries are exhausted.

370. Moreover, and notwithstanding its weight in the economy and in government revenues, the mineral sector – oil in particular – creates relatively few direct jobs, because of its weak linkages, upstream and downstream, with the rest of the economy. The government also understands the risks of the so-called “Dutch disease” associated with appreciation of the real exchange rate in the context of abundant resources, notably oil. This would compound the mechanical effects of nominal appreciation due to the CFA franc’s linkage to the euro, and would seriously undermine the Congolese economy’s competitiveness and hence its prospects for industrialization.

371. It is for this reason that the government, while pursuing strategies for the development of extractive industries, is determined to exploit its resources prudently in order to finance a strategy for diversification into other sectors. The following sections of this paper will analyze performance in terms of program execution and will evaluate the outcomes in terms of overall economic growth and sectoral contributions.

Growth: Sources, Performance and Challenges

Historic Overview of Changes in The Congolese Economy

372. The bouts of political and economic turbulence described above, as well as the important changes in the international setting, have greatly influenced the macroeconomic performance of Congo since independence in 1960. Over that long period, Congo recorded average annual growth rates of around 4.0 percent (1960-2011) while the country’s population grew at around 2.6 percent each year. Consequently, real per capita GDP averaged annual growth of 1.4 percent, rising from US$619.20 in 1960 (in constant dollars of 2000) to US$715.10 in 2011. This performance places Congo slightly above the average for sub-Saharan Africa (1 percent annual growth in per capita GDP over the period 1960-2010).

373. In line with political developments, changes in the productive structure of the Congolese economy can be grouped into four phases: 1960-1974, 1975-1984, 1985-1999, and the years since 2000. From 1960 to 1974 the Congolese economy owed its dynamism essentially to forestry and potassium mining, to which may be added agriculture (foodstuffs, coffee and cocoa). The extension of the rail and river transport network to neighboring countries during that time gave services a prime place in national income. The economy achieved an annual growth rate of around 5.5 percent.

374. From 1975 to 1984, oil production intensified, bringing about profound changes in the structure of domestic output and exports, as well as in government revenues. This trend was assisted by a particularly favorable economic setting of high and sustained oil prices on the world market during those years. As a result, the Congolese economy consistently recorded average annual growth rates of around 10 percent.

375. This performance was then reversed by emergence of the “Dutch disease”: Congo saw a sharp appreciation in the real exchange rate and thus a steep decline in its competitiveness, which depressed agriculture and manufacturing and aggravated dependence on oil. In fact, the sharp domestic demand boost from oil revenues exerted equivalent pressure on prices, wages and production costs, and was accompanied by nominal and real appreciation of the CFA franc. The resulting loss of competitiveness was devastating for sectors producing tradable goods: agriculture and manufacturing. The contraction of these sectors, in turn, accentuated Congo’s dependence on the oil sector and made the economy and the public finances hostage to fluctuating world prices, and hence to the kind of volatility that is damaging to any sustained development effort.

376. These structural problems plunged Congo into a period of economic and political instability between 1985 and 1999. This combination of circumstances undermined the social consensus and mired the country in devastating conflicts that aggravated the economic situation. The cumulative macroeconomic imbalances and structural weaknesses, which were masked by the proceeds from oil, became steadily worse during this period. Despite significant flows of oil revenues, Congo found itself structurally indebted, and the growing burden of debt service crowded out productive investment by government. The collapse of public investment, combined with the economy’s declining competitiveness, led to a slowdown in growth and an increase in poverty.

377. Since the turn of the century, Congo has progressively consolidated domestic peace and has undertaken economic reforms that have reversed the previous trends and have revived the country’s economic growth. Several factors have contributed to this development: (i) the return to a favorable international oil market and expansion of local oil production; (ii) implementation of courageous structural reforms to liberalize the economy and restore competitiveness. As a consequence, the Congolese economy has recorded a positive average annual growth rate of around 5.0 percent, which is 24 times higher than the average for the period 1985-1999. The oil sector has contributed significantly to this performance, but the non-oil sector has also shown signs of revival, with an average annual rate of 7.0 percent led by the forestry industry (before the 2008 crisis) and by telecommunications.

378. With these results, the government is determined to step up efforts at reform in order to strengthen the business climate, encourage domestic and foreign investment, and make the private sector a partner and prime agent in transforming the economy. The following analysis of performance and opportunities by sector indicates the areas where these efforts should be directed in order to maximize the impact on the economy as a whole.

Sectoral Performances

Agriculture

379. Congo has some important agricultural assets that are still largely unexploited. The most important of these, of course, is the extent and quality of its cultivable land. The country has more than 10 million hectares of arable land, of which 90 percent remains available. This situation contrasts with the conditions in many sub-Saharan African countries, where land is in short supply as a result of demographic pressure and advanced agricultural development. This is the case, for example, in Kenya, Rwanda and Burundi and to a lesser extent in Ghana, Côte d’Ivoire and Cameroon. As a consequence, Congo still has strong potential for the development of staple food crops as well as cash crops, including the production of biofuels for which there is a booming international market.

380. Moreover, Congo is endowed with an exceptionally favorable geographic location. Straddling the equator, the country has the possibility to produce seasonal crops throughout the year. A situation of this kind, where crops can be alternated during the entire year, is rare in Africa and even worldwide. The country’s orchards have a rich heritage of fruit-bearing tree species (21 kinds of mango, six kinds of mandarin, four kinds of orange). It also has know-how in grafting, which allows production cycles to be shortened, and Congo can now position itself as an exporter of orchard products.

381. Despite these advantages, agriculture has languished over the years because of low investment and productivity. This decline has been evident as much in staple food crops, where output per head dropped from 420 kg to 300 kg from the 1980s to the middle of the last decade, as in cash crops (coffee, cocoa, palm oil, cotton, peanuts, sugar cane). This situation has resulted in a steady shrinkage of agriculture’s share in GDP, from 20 percent in the 1980s to less than 10 percent in the first decade of this century, and it currently stands at only 4 percent of GDP.

382. As a result, Congo is experiencing problems of food security and heavy dependence on imported food products. Trends in the agriculture sector are exacerbating food insecurity and making the country increasingly dependent for its food on the outside world. As agricultural output has stagnated or declined, imports of foodstuffs have risen sharply, to around 130 million CFA francs, or 12 percent of the country’s export proceeds. This is making the country and its people, in particular the poorest, increasingly vulnerable. As an indication, the index of food production per capita at the beginning of this century was barely 60 percent of its level in the 1960s, while in developing countries as a whole that index stood at 170 percent of its 1960 value.

383. This poor performance is in large part due to the competitiveness problems discussed above, aggravated by low factor productivity and small-scale production patterns. The observed weakness of agriculture performance is linked in part to the dominance of a traditional farming system, which is still practiced on 81 percent of cultivated lands and is characterized by low productivity. This system coexists with two smaller-scale but more productive systems, namely “periurban” agriculture and large-scale public or private plantations.

384. Beyond the small size of farming operations (0.5 to 1.5 ha), traditional agriculture produces very low yields. The yield for maize, for example, is only 690 kg/hectare, compared to more than 3 tons per hectare for developing countries as a whole and 1.2 tons for sub-Saharan Africa. Yields are higher for cassava (6.6 tons/hectare) but are still well below the average for developing countries (more than 10 tons/hectare in the past decade). These low yields are due to rudimentary production techniques, in particular the very scarce use of fertilizer.

385. The poor agricultural performance is also the result of inadequate government attention and the inappropriate sector policies that have long prevailed. For more than 30 years (1960-1992), agricultural policy focused on establishing large-scale, government-run farms and ranches. With the withdrawal of government from direct involvement in production activities, agricultural policy during the periods of structural adjustment shifted in favor of private operations. Unfortunately, the reforms in support of private agriculture have not been applied with the diligence required, in light of the weakness of traditional agriculture. To the contrary, the reforms have been scattered and haphazard and as a result they have had a negligible impact on transforming the sector and boosting its productivity. To this must be added the depressing effects of competitiveness problems and, more particularly, the conflicts at the beginning and end of the 1990s. The end result has been a sharp decline in agricultural activity.

386. The lack of sustained attention, in terms of government investment, is still evident in agriculture. Investment spending earmarked for agriculture is still low in comparison to national needs and international standards. Over the years 2008-2010, government investment in the sector represented only 5.5 percent of average annual capital spending. This poor performance leaves Congo well below the international benchmark established at the Maputo Summit in 2003. (The NEPAD recommendations called for allocating at least 10 percent of the budget in order to achieve an agricultural growth rate of 6 percent, or three percentage points in excess of population growth).

387. The government is determined to revive the agriculture sector and make it one of the drivers of economic transformation to achieve greater and better-distributed growth. However, there are a number of severe constraints that must be addressed in order to take advantage of Congo’s agricultural assets and reinforce their contribution to the country’s development.

388. The issue of “small-scale” production and factor productivity. As noted above, the very first constraint concerns the “small-scale” and rudimentary production technologies typical of “peasant agriculture” that account for 80 percent of farm output. As a result, productivity and competitiveness are weak and remain a drag on the expansion of Congolese agriculture. To this must be added a series of factors, in particular: (i) human capital shortcomings; (ii) absence of effective mechanisms (farm banks, microfinance) for financing agricultural investment and activity; and as a corollary, (iii) the weakness of farming technology and production methods.

389. The land question. Promoting investment and modernizing agriculture will also require addressing another essential constraint on production factors – land. Traditional farming is based on communal ownership of the land, organized according to cultural traditions in the country’s various départements. To institute modern and larger scale agriculture, the land regime will have to be adapted to the market economy. In this regard, the current regime has great weaknesses, in particular the difficulties in asserting and securing land title and developing a real land market accessible both to citizens and to foreign investors and farmers. Foreign involvement can not only contribute know-how, raise needed financial resources and inject innovations, but can also open export markets for Congolese products.

390. Market size. On the demand side, the growth of Congolese agriculture may also have been held back by the small size of the country’s population and hence of its domestic market. Experience in Congo and in other countries with narrow domestic markets (Benin, Togo, Gambia, Zimbabwe etc.), however, shows that this constraint has been greatly overestimated. As evidence, staple food crop production has not kept pace with population growth and, as noted earlier, this has left Congo increasingly dependent on food imports. Moreover, this constraint does not seem to affect cash crop production, which in all countries of the region is essentially for export. More significantly, with globalization, the domestic market size constraint is becoming less important, at least on the demand side.

391. The quality of trade policies. The weaknesses in production capacities and trade policies and the lack of competitiveness in agriculture are much more important for the sector’s growth than is the size of the domestic market. Prospects for exports to the subregion, particularly to the DRC, but also to the rest of the world, are highly favorable. To take advantage of them will require a sound combination of domestic, regional and global trade policies and targeted measures to organize domestic producers, in order to preserve the resources for balanced and sustainable development purposes. Strategies in the agriculture sector are described in chapter 8 of this document.

Livestock

392. As in the case of crop agriculture, Congo has significant natural advantages in livestock, in particular its vast expanses of pasture land, in their natural state or capable of conversion, most of which is suitable for sheep and goat raising, even if the nutritional quality is limited. Heavy-livestock raising was in fact introduced into Congo in the colonial era. Over the intervening decades, a number of experiments have been attempted, including the successful introduction of new cattle breeds (primarily Lagune and Ndama). On the other hand, small-scale, traditional cattle herding has been virtually snuffed out by the emergence of government-owned ranches that have taken over the best pasture lands and that compete with the output of traditional farmers. With the failure of state-owned ranches and farms, there is now a possibility to revive private cattle raising.

393. Congo also has great potential for the raising of small livestock and poultry, as a family farming pursuit. However, in contrast to countries of the Sahel (e.g. Chad, Cameroon), and other countries that have significant pastoralist populations (such as the Masai in Kenya and Tanzania), Congo has little in the way of an agro-pastoral tradition. Consequently, the development of small-livestock raising will require still greater efforts to arouse the interest of farmers and herders in this subsector and, for small-scale traditional farmers, to modernize their operations and boost their productivity.

394. Congo also has important native fauna reserves that should encourage family-based livestock raising. These include certain poultry species such as quails and guinea fowl, as well as ruminants and rodents such as antelope, aulacodes (cane rats) and hedgehogs, for which the lifecycle and production cycle are now well in hand, thanks to innovations.

395. Compared to these potentials, the livestock sector is still in its infancy in Congo and, like agriculture, its development has been handicapped by capacity and competitiveness problems. In recent years, livestock raising has grown at an average annual rate of 2.8 percent, well below the rate for agricultural output and for the overall non-oil economy. Its contribution to non-oil GDP has consequently been declining steadily, and is well below the sector’s potential.

396. There has however been a sharp increase in domestic demand for livestock products, as indicated by the strong growth in imports per capita. As well, regional demand is booming, especially in the DRC. Congo can benefit, then, from these natural assets to expand domestic production in response to this demand.

397. To this end, the government will have to strengthen the capacity of the working population of the sub-sector and remove the main obstacles concerning the small number of agro-pastoralists. To these factors of production must be added the problem of competitiveness of the economy as a whole which constitutes a cross-cutting prerequisite that must be met if Congolese products are to be made more attractive in comparison to imports.

Fishing

398. In this area, Congo again has some undeniable but under-exploited assets: it has a coastline of 170 km and a dense continental hydrographic network with two main river basins: the Congo and its tributaries (Oubangui, Sangha, Likouala-Mossaka, Alima, etc) and the Kouilou-Niari and its tributaries (Loutété, Bouenza, Loudima, Louvissi kibaka). These two watersheds are rich in fishery resources. As an indication, the potential annual catch is estimated at 100,000 tons of freshwater fish and 80,000 tons of marine fish. However, the marine fishery has shrunk significantly, while the freshwater fishery is still marking time, with output of barely 15,000 tons a year.

399. Despite these assets, fishing is still underexploited in Congo and its contribution to national wealth falls far short of its potential. As an indication, the sector’s average annual contribution to growth has been barely 1 percent, even during the period 2000-2010. By comparison with other coastal countries, the Congolese fishery contributes little either to GDP or to exports. This week contribution can be explained by:

  • Insufficient understanding of the available fishery resources and lack of control over their exploitation, especially in inland waters.

  • Lack of support facilities for fish harvesters, in terms of training in enhanced fishing techniques and methods (processing and conservation techniques are often outdated).

  • Inadequate facilities for conservation and processing of fishery products.

  • Obsolete equipment, processing plants and boats.

  • Inadequate fish landing and transport facilities.

Apart from these major difficulties, fishing zones have receded because of oil operations in maritime waters, the invasion of vegetation in water bodies, the silting of the Congo River and its tributaries, and the presence of floating logs that make it impossible for small vessels to navigate in forested areas.

Aquaculture and fish farming

400. When it comes to aquaculture and fish farming, the basins of the Congo and Kouilou-Niari rivers represent a major strength for the development of aquaculture and pisciculture activities. Indeed, the Congo has some rare and valuable natural species that could be raised for export. These include species such as missala (crustacean), malangwa, djombo, and ngolo (clarias, catfish), tilapia (nilotica), the Ngoki (crocodile) the skin of which is used in the leather and footwear industry. Market prospects are enticing given the sustained gowth of the domestic and regional markets, as indicated by the growth in the consumption and imports of fishing products.

401. Aquaculture is still confined to family-operated and traditional pond-based fish farming, and is limited by the lack of appropriate inputs (fry of good stock, proper feed, fertility agents etc.). This situation explains in part the poor yields obtained from fish farming. To this may be added the almost complete lack of extension agents as well as of means for the local delivery of technical support.

402. Significant measures are planned to boost capacities. These include the establishment of support infrastructure in the Lower Alima basin, for the development of aquaculture and fish farming. In terms of human resources, some départements (Pool, Lékoumou, Niari, the Plateaux, Cuvette and Kouilou) have know-how available for fish farming in ponds and in still river waters (“oxbows”).

403. From this viewpoint, boosting the sector will require coordinated action programs in two areas: (i) building the capacity of operators and strengthening key factors, in particular infrastructure and human resources, and (ii) improving the overall competitiveness of the economy, without which Congolese products will not be able to compete with imports.

Agro-industry

404. The low level of development of farming, livestock and fishing activities has also left the food and agri-food industry in the doldrums. The agri-food industry amounts at present to a single cane sugar production facility, one wheat flour mill, and some beverage producers (mineral water, beer and soft drinks). Even in these cases, the industries have had little in the way of spillover effects upstream, and many inputs are imported (e.g. wheat for flour milling, maize, malt and hops).

405. There is much room for growth in this sector, then, provided it is accompanied by an adequate supply of key inputs. As well, export prospects are attractive, particularly for vegetable oils (palm oil, peanut oil clock), soap making and newly developed lines to satisfy the growing international market for beauty products and bioenergy.

Forestry and the wood industry

406. Congo abounds in forestry resources. Exploitation began long ago in the southwestern part of the country (Kouilou) and expanded into the Niair forest and thence into the Chaillu Mountains before reaching into the northern part of the country. Congo has some 22.5 million hectares of forest and a commercially exploitable wood potential of 340 million m3. Forest production thus became the country’s main economic activity, geared essentially to export, and the one with the highest rate of growth. From 1946 to 1959, exports of raw logs rose from 5,660 tons to 197,000 tons, including 140,000 tons of limba (shinglewood), and lumber exports increased from 5,570 tons to 12,720 tons, to which may be added 3,740 tons of veneer. Public investments have included prospecting work as well as activities to enrich the natural forest and create artificial stands: for example, 5,500 ha of limba in Mayombe, 400 ha of eucalyptus near Pointe-Noire.

407. Given the proven potential, the level of output could reach 2 million m3 without harming the ecological balance. Despite uncertain economic conditions, Congolese production has been growing steadily, particularly for raw logs. The same is true for wood processing. However, the country is still far from achieving its ambitions, in terms of exploitation and in terms of the provision in the forestry code that calls for processing 85 percent of wood production locally.

408. Despite the disruptions mentioned above, the forestry industry remains one of the biggest employers in the economy. Having been displaced by oil since 1974, wood is still the country’s second largest export resource. The industry has grown steadily in 2009-2010 after considerable contraction in 2008 due to the global economic crisis and the collapse of wood prices.

409. As in Cameroon and Gabon, the “wood industry” can contribute substantially to economic growth, to job creation as well as to government revenues. The government has already launched a program to increase domestic wood processing in order to derive greater value added. Targeted actions are already under way to build capacities in the sector and to encourage investors in this sector.

Market services

410. Congo has great potential to develop a transit economy because of its geographic position in the heart of central Africa. Congo has a proven track record in providing services to neighboring countries both for imports and for export of their products. Despite the slowdown caused by structural problems and the crises described earlier, Congo remains a country of transit and it has the principal “economic entry and exit gateway” in central Africa, namely the Port Autonome de Pointe-Noire (PAPN).

411. Transport. Congo has a natural transport corridor to the countries of central Africa. This corridor consists of the Port of Pointe-Noire, the railway, the Port of Brazzaville and the secondary ports. However, problems with the Congo-Ocean Railway (CFCO) and navigation constraints on the Congo River during certain periods of the year (low water levels) have frustrated development of Congo’s capacities to provide transit services to countries of the region.

412. Significant efforts have been made in recent years, or are now underway, to address this situation. These include rehabilitation of the railway (under way), construction of the Pointe-Noire-Brazzaville Highway (under way), expansion and modernization of the Pointe-Noire port (under way), in particular its container terminal, planned rehabilitation of the Port of Brazzaville and the secondary ports, as well as completion of the “bridge-road-rail” project between Brazzaville and Kinshasa.

413. Completion of these major projects is bound to allow Congo to take full advantage of its potential as a “corridor country”, thereby improving interconnection of the economies of the subregion to the rest of the world.

414. Tourism. Congo has great potential for ecological tourism, but that potential has been underexploited. Congo is in fact a vast and relatively virgin natural garden situated in the heart of the Congo basin, commonly known as the “African Amazon” because of the wealth of its biodiversity. Its physical relief and its climate offer different ecological zones, the flora and fauna of which constitute an exceptional tourism resource. Its variety of watercourses, consisting of rivers, streams, lakes and lagoons, is one of its most attractive tourist assets. In particular, the equator-straddling city of Makoua symbolizes Congo’s location in both the northern and southern hemispheres.

415. A number of natural sites have the potential to attract tourists. The principal ones are: (i) the Loufoulakari, Minguele and Moukoukoulou waterfalls and the cataracts of the Congo; (ii) the Diosso gorges, the Nkila-Ntari caves, the Inoni cliffs and the “holy hand” of Sembé; (iii) the mangroves of Conkouati, Lake Nanga and the “Blue Lake” of Louvakou; (iv) the biosphere of Dimoneka; and (v) the Léfini and Nouabalé Ndoki reserves and the Odzala National Park.

416. Congo has a great diversity of peoples and of cultural, linguistic and artistic riches, on which the country could build a “high-end” tourism business that would enhance the sector’s contribution to national income, to foreign currency generation, and to job creation.

417. The tourism sector’s contribution to growth is still very low in comparison to its potential. This poor performance reflects the shortage of capacities, and in particular the lack of development of tourist sites and circuits and the shortage of hospitality facilities, especially hotels. Here again, competitiveness is a problem, for transportation costs on the Congo River are still very high for a country that aspires to become a tourist destination. The government is well aware of the problem and intends to correct it in the context of this plan.

418. Financial services. Congo is currently experiencing a growth spurt in its banking sector. After the crisis of the 1990s, the Congolese banking sector underwent a cleanup, and several international banks moved in. However, the level of use of banking services in financing the economy, remains poor. Although credit institutions are awash in liquidity, they extend little credit to the private sector. The deepening and diversification of banking structures and products is one of main conditions for the sustainable funding of the development and modernization strategy of society.

419. The microfinance industry has been performing well, and savings and loan activities are growing strongly. This is very encouraging from the viewpoint of poverty reduction, for such services are used for the most part by poor people. At the same time, the insurance industry is undergoing a profound restructuring with the reorganization of the public operator – Assurances et Réassurances du Congo (ARC) – and stepped-up oversight of the industry.

420. Yet development of the financial market is still awaiting the effective start-up of the Central Africa Stock Exchange (BVMAC). That exchange is to serve the six countries of CEMAC and is intended to facilitate investment financing for private operators. Its failure to commence trading is holding back the efforts of the country and of the financial system to achieve the diversification of long-term financing instruments for private investment.

Recent Macroeconomic Performance: 2008-2011

The Government’s Economic Program

421. The macroeconomic performance of recent years has been particularly encouraging, since introduction of the Government’s economic program supported by the IMF (December 2004) and the Poverty Reduction Strategy (PRS, 2008-2010). Implementation of the PRS made Congo eligible for cancellation of nearly US$3.5 billion in debts, representing 67.4 percent of the country’s total debt stock and 32.4 percent of its GDP.

Figure 4.Congo In International Comparison: Macroeconomic Policy

Source: ST/DSCERTP and INT/DEC, World Bank Data, World Development Indicators <http://darabank.worldbank.org/>

Growth and competitiveness

422. The oil sector remains the driver of economic growth in the Congo. Its positive performance during recent years is due to the favorable trend in global crude oil prices, the increase in exploitation at the M’boundi, Nkossa Sud, Kombi, Likalala, Loango and Zatchi fields and the operationalization of the Moho Bilondo field. During the period 2008-2011, the Congo experienced annual average growth close on 7,0% drawn from both the oil sector (9,6%) and the non-oil sector, whose contribution is on the rise (4,0% in 2009, 6,4% in 2010 and 8,0% in 2011) and this, despite the global economic crisis which shook the wood industry (2008-2009).

The oil sector’s performance is due to rising oil output, which has been driven by the favorable trend in prices and good success in exploiting the fields (M’boundi, Nkossa Sud, Kombi, Likalala, Loango and Zatchi). With the coming on stream off the Moho Bilondo field, oil output rose from 15.3 million tons in 2007 to 15.7 million tons in 2011, for an average annual growth rate of 2.6 percent.

Table 5.GDP Performance, 2008-2011
Year2008200920102011Average

2008-2011
(Annual change, in percentages)
Primary sector6.810.611.82.68.0
Agriculture6.26.86.47.96.8
Sylviculture and forestry2.0-42.55.04.1-7.8
Extracted industries7.416.113.71.19.6
Secondary sector6.65.36.38.76.7
Manufacturing7.05.55.98.66.7
Electricity, gas and water3.61.35.57.44.5
Construction and public Works7.68.78.810.58.9
Tertiary sector5.05.45.77.25.8
Transport and telecommunications6.76.16.99.27.2
Commerce, restaurants and hotels6.07.57.49.27.5
Government, all levels3.02.93.23.23.1
Other services4.14.84.96.75.1
GDP at factor cost6.07.68.55.36.8
Import duties and taxes4.24.516.06.67.8
GDP at market prices5.97.58.75.46.9
Non-oil GDP5.33.96.47.55.8
Source: CPCMB
Source: CPCMB

423. The performance of the non-oil sector has been particularly encouraging with respect to prospects for diversification. In fact, after a downturn in 2009 in the wake of the global crisis, which affected forestry output in particular (-42 percent), the non-oil sector saw growth accelerate to 4 percent in 2009, and to nearly 8 percent in 2011, according to recent estimates. Besides commerce and services, we note a sustained buoyancy in tradable goods, notably agriculture (7, percent), manufacturing (7.0 percent) and transport and commerce (6.0 percent).

Figure 5.Change In GDP (Percentages)

Source: CPCMB

424. Exports. The behavior of exports and the structure of Congo’s international trade follow production trends and seemed to confirm the gains in productivity. While oil remains the dominant sector, other tradable goods sectors have seen still sharper growth in exports as a share of growth in output, signaling an enhanced propensity in favor of export. This is particularly evident in wood products. Consequently, the share of non-oil exports has been progressing favorably, even if their weight remains low in the total of exports, given the dominance of oil.

Table 6.Goods Exports 1987-2009
Products1987-19931994-20002001-20062007-2009
1.Crude oil83%92%92%93%
2.Oil products2%1%1%1,53%
3.Tropical wood12%5%6%3,50%
4.Eucalyptus logs2%2%0%0,10%
5.Sugar1%1%1%0,34%

425. Investment. There was a favorable progression of non-oil investment over the period, consistent with the growth in non-oil output. The non-oil investment rate in Congo rose steadily over the period (10.8 percent in 2008 and 14.8 percent in 2011). The intersection of this curve with that of non-oil GDP growth indicates a recovery of investment productivity in the non-oil sector.

426. More interestingly, foreign investment in the non-oil sector has risen considerably over the period. An analysis of the balance of payments confirms that foreign investment in the non-oil sector rose sharply in recent years (by an annual average of 35 percent between 2008 and 2011). This finding corroborates the modest improvement in the business climate, reflecting the courageous initiatives taken by the government. These positive developments have encouraged the government to persevere on this path and to redouble its efforts to strengthen the business environment, in order to stimulate investment for transforming the Congolese economy.

Inflation

427. The inflationary pressures recorded at the beginning of 2009, after the 2008 explosion in food and oil prices, slowed considerably in 2010. This favorable trend can be seen in the deceleration of the consumer price index (CPI), which rose at an annual average of 3 percent between 2008 and 2010.

428. The decline in world food prices contributed to this slowing of inflation. Also observable are the competitiveness effects resulting from structural reforms and the reinforcement of infrastructure services. The downward trend in inflation can in fact be correlated with the substantial reduction in business and transaction costs resulting from improvements in the supply routes for food products in urban centers, and the progress made in the delivery of electricity. With intensification of these reforms and improvement in the quality of infrastructure services (transport and energy), thanks in particular to rehabilitation of the power distribution networks and transport infrastructure, the downward trend in inflation should continue.

429. The fiscal and monetary prudence exhibited by the government in the context of its economic program should help contain inflation at around 3 percent, consistent with the CEMAC zone convergence criteria. On the fiscal and monetary side, the government continues to pay close attention to the rate of growth of spending and credit. This prudence is essential to avoid inflationary tensions that could result from sharp growth in domestic demand, given production and import capacities.

430. This policy, which is at once prudent but also accommodating of growth, is evident in the monetary situation. The money supply has grown at a rate proportional to GDP (the ratio remained stable at around 64 percent over the period), while the favorable trend in the government’s debt position has served to free up credit for the private sector. As an indication, credit to the private sector rose at an average pace of 38.8 percent, in correlation with the progress of investment and private-sector activity, although the level still remains low. All told, the government’s pro-growth but prudent fiscal and monetary policies have made it possible to sustain activity and maintain macroeconomic stability.

The public finances

431. Fiscal policy has been geared to restoring balance in the public finances, by stressing improvement in the collection of non-oil revenues and a reduction in the pace of growth of current expenditures. This judicious policy has allowed the government to boost investment spending while continuing to save a portion of oil revenues. The strategic objective is to constitute reserves both for “financial stabilization” needs and for the needs of future generations, recognizing that oil revenues will inevitably decline over the long term.

432. Revenues. Thanks to stepped-up collection efforts and the sound performance of the non-oil sector, government revenues rose strongly at an average annual pace of 25.8 percent over the period 2008-2011. This remarkable performance is due in particular to the solid record with non-oil revenues, which rose by 19.5 percent over the period, increasing their share of GDP from 7.6 percent in 2008 to 10 percent in 2011, and raising their contribution to government revenues from 14.3 percent to 20.4 percent.

Table 7.Government Revenues 2008-2011

(as percentage of GDP)

Year2008200920102011Average
2008-2011
Revenues and grants53.334.641.745.243.7
Own revenues53.334.241.745.243.6
Oil revenues45.624.132.936.034.7
Non-oil revenues7.610.18.89.28.9
Tax revenues6.99.28.38.78.3
Non-tax revenues0.70.80.40.50.6
Grants0.00.40.00.00.1
Source: CPCMB
Source: CPCMB

433. Expenditures. The government has clearly reoriented its fiscal policy so as to reinforce infrastructure, boost competitiveness, and accelerate the transformation of the economy and of growth. To this end, and despite administrative and social pressures, the government has succeeded in containing the rise in current expenditures, while steering them towards growth sectors and social development (health and education). This has freed up fiscal room in favor of capital spending. As table 9 indicates (Public Spending 2008-2011, as percentages of GDP), while these two aggregates have behaved favorably, the share of current spending declined from 17 percent of GDP in 2008 to 10 percent in 2011, while capital expenditure rose from 10 percent to 16 percent over the same period.

Table 8.Government Expenditure 2001-2011 (Percentages Of Gdp)
2008200920102011
Net spending and loans27,2%28,8%23,0%23,3%
Current spending.17,2%16.2%12,7%9,0%
Compensation and salaries.3,6%4,5%3,4%3,0%
Goods and services.4,8%4,5%4,3%2,8%
Transfers.5,0%4,3%3,2%2,6%
Local governments.0,5%0,6%0,8%0,5%
Interest on the public debt.3,3%1,9%1,1%0,0%
Capital spending.10,0%12,5%10,2%14,3%
Internally financed.8,6%12,1%9,6%11,3%
Externally financed.]1,4%0,4%0,6%3,1%

434. On the strength of the policies described above, the government has been able to persevere along the path toward cleaning up the public finances. As an indication, the budgetary balance on a cash basis improved considerably over the period 2008-2011, moving from a deficit of 4.1 percent of GDP in 2008 to a surplus of 15.9 percent in 2010. This surplus should stabilize in 2011 at around 14.3 percent. However, the picture is not the same once oil revenues are isolated. In fact, over the period, the primary balance excluding oil revenues remained structurally in deficit to the tune of around 14 percent of GDP. This poses a challenge to the authorities in terms of the risks to fiscal sustainability and macroeconomic stability over the medium term. These risks could be accentuated with the increase in spending for implementation of the development program. The government is well aware of this challenge and is determined to show the greatest prudence and frugality in its budgetary policy, while ensuring that it remains – in terms of intensity and quality – compatible with Congo’s ambitions as an emerging economy.

Employment: Performances and Challenges

Overview

435. The results of the ECOM2 survey point to particularly encouraging trends for employment. Of a workforce that represents 62.2 percent of the total population (4.085 million), 57.9 percent of its members are working and thus generating revenues through their productive activities. The ECOM also shows that, with the steady progress of the economy over the period 2005-2011, the unemployment rate dropped considerably over that time, from 19.4 percent (ECOM1) to 6.9 percent (ECOM2). This improvement can be seen both in rural areas (down from 5.8 percent to 1.7 percent between 2005 and 2011) and in the cities, where the unemployment rate stood at 10.0 percent in 2011.

436. Nevertheless, young people remain particularly hard-hit by unemployment. Youngsters under the age of 15 years account for around 40 percent of the population, and more than two thirds of the population is under 29 years. The results of ECOM2 show that, despite the overall downward trend, people between 15 and 29 years face an especially high unemployment rate of around 12 percent, although it has improved since 2005 (40.0 percent). When “discouraged job seekers” are taken into account, the youth unemployment rate is even higher.

437. An analysis of employment status by sector reveals another cause of concern: many jobs may be precarious or in sectors and occupations where productivity is low. As was the case in 2005, two thirds of the “gainfully occupied” are working for their own account. They are often engaged in informal, precarious and low-productivity activities where pay is low. On the other hand, there are fewer workers in the more stable and relatively higher-paying employment sectors such as the civil service (11.4 percent), small and medium-sized enterprises (7.7 percent) or large private firms (4.8 percent). Agriculture and silviculture employ the highest share of the working population (37.8 percent), followed by wholesale and retail trade (“commerce”, 23.1 percent), and services (10.9 percent). By contrast, the mining and quarrying industry, where the highest paying private jobs are to be found, employs the fewest Congolese workers (0.9 percent). These trends confirm that most jobs are still in low-productivity and therefore low-paying sectors where job insecurity is high. An analysis of employment trends, both in terms of productive sectors offering work and of the people looking for work, provides a closer look at employment, its quality, and its outlook in Congo.

Employment Opportunities

Recent trends

438. The results of the ECOM (2011) confirm those of the survey of urban employment and the informal sector (EESIC, 2009), showing a clear decrease in unemployment across the country, and most notably in Brazzaville and Pointe-Noire. Over the decade 2000-2009, employment in the modern sector rose steadily overall, from 105,827 jobs to 131,455, for an average annual increase of 2.4 percent, compared to an average annual rate of GDP growth of 4.6 percent. In the non-oil sector, employment rose by 4.1 percent and GDP by 7.0 percent. These trends are encouraging in several respects. They show that output growth has translated into job creation. Just as importantly, the intersection of the two trends reveals that the Congolese economy has seen sharp gains in labor productivity over the period, especially in the non-oil sector. Yet the data do not make it possible to assess the performance of wages and incomes, which is needed to obtain an overview of the scope and quality of the jobs created.

Employment by sector

439. The greatest number of Congolese workers earn their livelihood in agriculture (35.6 percent) or in commerce (20.7 percent), while the proportion of persons working in manufacturing is relatively low (16.3 percent). The ECOM2 indicates that more than two thirds of the workforce (35.6 percent) is engaged in agriculture. Construction, commerce and other services each account for around 20 percent of the working population.

440. In terms of occupational category, persons working for their own account remain the largest group, accounting for 70.1 percent of labor market participants. The proportion of poor workers in this group is also the highest, at 75.2 percent. The prevalence of poverty in this group is correlated to the informal nature of activities.

441. Overall, a large portion of the workforce is engaged in the informal sector, and only 15 percent have formal jobs. This indicates that, despite the encouraging performance of recent years, job insecurity still prevails for a large portion of the population. That finding confirms the need for greater transformation of the economy (supply-side) but also of human resources (demand-side), and for greater attention to the functioning of the labor market.

Job Seekers

442. The ability to find a job depends on a number of socio-demographic characteristics, the most important of which is the level of education. Overall, gender seems relatively unimportant, except in the cities. In fact, there is scarcely any difference in male and female unemployment rates in the economy as a whole (18 percent versus 20.5 percent), but the difference becomes more pronounced in urban areas (14 percent versus 19 percent).

443. Age is a much more important factor, as noted earlier. According to ECOM1 (2005), the unemployment rate exceeds 40 percent for the 15-19 years age group and varies between 20 and 40 percent to the age of 30. These results from 2005 are confirmed by those of 2009, when the unemployment rate in the 15-29 years age bracket in the country’s two biggest cities was 25 percent as compared to 5.4 percent for persons 50 years and older. The ECOM2 2011 confirms these gaps: the 15-29 years unemployment rate dropped to 12 percent (11.7 percent for men and 12.4 percent for women), while the over-50 rate was 3.8 percent for men and 0.6 percent for women.

444. The most interesting finding has to do with the contrasting trends in employment and education levels among young people. The ECOM1 2005 and the EESIC 2009 reveal that youth unemployment rises with the level of education. Young people with no schooling have in fact a lower unemployment rate than those with secondary schooling or higher.

445. This phenomenon lends itself to several interpretations. It is highly likely that the current, predominantly informal structure of the Congolese economy offers more jobs in sectors that require less human capital (in terms of quality), particularly in quasi-informal and SME activities. To the extent that they have higher expectations for wages and working conditions, the more educated jobseekers will have more trouble finding employment. The heavy weight of the informal sector may also have skewed the results. For example, many workers with little or no education may be tempted to leave the labor market to find or develop an informal occupation as small operators or “own-account workers”. Lastly, it may well be that, besides being more demanding, the best-educated individuals have the kind of general training that is ill-suited to pursuing practical activities.

446. These explanations are complementary and they underscore a major source of concern for the economy and the government: the dominance of the informal sector. That dominance means that many workers are engaged in, and unable to escape from, activities where productivity and pay are low and where insecurity and vulnerability are high. Far from abandoning its education and training policy, the government will have to accelerate and intensify its human resource building program to make primary and secondary education universal. It will also have to encourage and facilitate young people’s access to higher education, and strengthen its quality, in order to develop a sizable pool of skilled workers who can absorb new technologies and respond to the demands of Congo’s modernization and industrialization.

The Labor Market and Promotion Policies

447. The formal employment market in Congo is dominated by the public sector, which accounted on average for more than 61 percent of employees over the decade 2000-2009. However, the private sector has been gaining ground (from nearly 20 percent in 2000 to 37 percent in 2009), driven primarily by employment in agro-forestry, mining and telecommunications.

448. Yet the institutional mechanism for matching labor supply and demand needs to be reinforced. The Directorate-General of the Civil Service (DGFP) and the National Employment and Labor Office (ONEMO) are the principal government agencies for labor market facilitation. The Directorate-General of Vocational Training and Employment (DGFQE) supplements the efforts of the other two agencies.

449. According to the latest urban employment survey (EESI 2009), a very low proportion of the unemployed (3.2 percent) makes use of the services of ONEMO to find employment. The great majority rely on social and family networks in their job search. The reasons for this negligible reliance on government agencies are unclear, but the finding must call into question their raison d’être. In effect, if they were seen as particularly useful in the search for employment, there would be no reason why jobseekers and potential employers should not make more use of their services. In the end, it is the relevance and effectiveness of these administrative structures that are called into question.

450. The success rate of job searches through the intermediary of government agencies is low. Over the last five years, only 3 jobseekers in 20 (or 14 percent) were successful. When this low rate is viewed against the significant decline in unemployment, it must be concluded that government intermediation facilities are ineffective. Their poor performance can be attributed to capacity problems (human resources, equipment and databases), as well as the qualification shortcomings of jobseekers, vis-à-vis the demands of employers. The government is aware of these problems and is determined to correct them by, on one hand, boosting the capacities of the intermediation agencies and, on the other hand, strengthening the education system and its capacity to produce workers with the skills needed for the modern economy.

451. Reflecting the dysfunctional and distorted labor market, wages in the private and public sectors are ill-aligned with labor productivity, and this contributes to a mismatch between labor supply and demand. Private-sector wages and salaries are negotiated in collective contracts with firms, and are often determined according to “pay grids” and on the basis of academic qualifications, rather than the worker’s productivity. Consequently, the benchmark minimum wage is not explicitly determined and adjusted on an objective, meaningful basis such as the cost of living index, below which a worker will prefer to stay home rather than go to work (the “reservation wage”). As a result, many potential workers are tempted to leave the labor market and “go it alone” rather than search for a formal job. This is probably the underlying cause of the high rate of “discouraged” job seekers and the gap between the total economically active population and formal employees. It is also one of the causes of the high rate of “underemployment” (more than one worker in two – 52 percent – is working less than 35 hours a week).

452. This problem of alignment persists in the public sector as well. It has been exacerbated by the long-standing freeze on the minimum wage and by decree no. 06/96 of March 6, 1996 blocking the financial benefits attached to promotions in the civil service. As noted earlier, these obstacles have reduced motivational incentives for civil servants, with the consequent depressing effect on their productivity and efficiency.

453. The government’s recent measures will help to address these problems and to bring wages into line with labor productivity. In particular, the government has repealed decree no. 06/96 and has raised the minimum wage from CFAF 50,400 to 60,000 as of January 2011. Overall, wages are trending upwards in both the private and public sectors.

Summary of The Main Constraints on Growth and Job Creation

454. In summary, despite the significant progress in job creation, some major challenges remain. While the unemployment rate has fallen significantly since 2005, it is still high, particularly for young people, and it masks a low labor market participation rate.

455. With a small population, Congo cannot afford to have a poorly educated workforce, much less a low participation rate, especially in the modern sector. The government has recognized these challenges and intends to address them by refining its policies for labor market facilitation and workforce education, and offering incentives to align wages with labor productivity and thereby improve human resource efficiency.

456. At the same time, the government is working to remove various constraints in terms of capacities and competitiveness that are handicapping the productive sectors and preventing them from realizing their potential in light of the country’s assets and the encouraging outlook for the international market. These policies are described in chapters 8 to 12 of this paper.

Chapter 4. Poverty and Social Development

Household Living Conditions

457. The second Household Consumption Survey (ECOM2) makes it possible to appreciate the trend in household living conditions, to estimate economic and social welfare indicators, and to perform extrapolations for the incidence of poverty and human development indicators. The “poverty perception” component of the ECOM reveals how Congolese households themselves experience and understand their living conditions and how they judge the credibility and effectiveness of economic and social development policies and the government’s poverty reduction efforts. These analyses serve to consolidate estimates to date on welfare and poverty trends.

Box 3.Congolese Household Conditions in 2011

1. The National Center for Statistics and Economic Research (CNSEE) conducted its first nationwide survey of household living conditions in 2005. This was the “Congolese Survey of Households to Evaluate Poverty” (ECOM1 2005). This socioeconomic survey covered 5,256 households distributed across the country, and estimated the monetary poverty rate (those living below the threshold of CFA 544.40 per day and per adult equivalent) at 50.7 percent for the Congolese population as a whole.

2. The second household survey (ECOM2) was launched on February 25, 2011, and covered 10,584 households, again nationwide. The survey results, and in particular the analysis of the “core welfare indicators” module (the CWIQ [French “QUIBB”] questionnaire), produced some indicators of household living conditions in 2011. The 201 CWIQ derived from ECOM2 can be used to draw some comparisons with selected indicators for 2005 produced by ECOM1.

3. Beyond ECOM 1 and 2, other socioeconomic and demographic surveys have been conducted since 2005: (i) the Demographic and Health Survey (EDS, 2005), (ii) the Survey of Seroprevalence and AIDS Indicators (ESISC-1, 2009), (iii) the Survey of Employment and the Informal Sector (EESIC, 2009), and (iv) the Agricultural Survey (2010). These surveys, along with some specific studies, provide an overview of the trends in household living conditions.

Source: STP-DSCERP

Socio-Demographic Trends

458. Population. The cross-results from ECOM2 2011 and ECOM1 2005 indicate that the population grew at an average annual rate of 2.7 percent over the last five years. According to ECOM, the population is estimated at 4,085,422, compared to 3,551,500 in 2005. The gender make-up of the population has scarcely changed in five years: women continue to account for slightly over half (51.7 percent) compared to men (48.3 percent) in 2011.

459. Along with its strong growth, the Congolese population has become more heavily concentrated in urban areas, while its composition has remained the same. Demographic growth is higher in the cities (2.3 percentage points) than in the countryside, where it has declined (-3.8 percent). This has resulted in a greater concentration of population in urban areas (67.1 percent urban versus 32.9 percent rural) in 2011 than was the case in 2005 (58.4 percent versus 41.6 percent). Migration has accelerated over the last five years, confirming the attractiveness of the major cities and the perception that they afford better living conditions and economic performance. In particular, the départements of Pointe-Noire and Brazzaville have proven attractive, receiving 38.5 percent and 28.1 percent of migrants, respectively.

460. The city of Pointe-Noire seems particularly attractive because of its perceived employment opportunities. For example, nearly half (48.7 percent) of migrants looking for work choose Pointe-Noire as their destination, compared to 34.7 percent who choose the political capital of Brazzaville. These tendencies are at once favorable and worrisome.

461. Vigorous growth in the population of these “economic hotspots” is essential for assuring a labor force of the strength and quality needed to support the transformation of the economy. At the same time, this process will demand sustained efforts to develop infrastructure and provide essential social services at a rapid pace.

462. Overall, the Congolese population is young. People under 15 years of age represent around 40 percent of the total, and those between 15 and 29 years, 22.8 percent. This means that nearly two thirds of the population is under 30 years of age. By contrast, persons over 60 years represent only 5.8 percent of the total population.

463. This youthful population is at once a major asset and a cause of concern for Congo. On one hand, it offers a strong workforce which, with greater efforts at education and training, will provide a base of highly productive human resources. On the other hand, youthfulness also means that the government and Congolese society will have to devote considerable efforts to education and training in order to provide opportunities for young people and boost job creation in response to their needs.

464. On this point, the ECOM2 data show some alarming results. They indicate that more than a third of the population (38.4 percent) has not completed primary school, and only 3 percent has gone on to higher education. More detailed analysis will of course be needed to assess the education levels of young people and of the workforce as a whole. Unable to count on a large volume of workers because of the small size of its population, the country needs, in compensation, a highly educated workforce in order to reinforce its human capital. This constitutes a challenge for the modernization of the economy and society.

465. Congolese households. The household is defined as the basic socioeconomic unit within which members pool their resources and together meet their essential food and nonfood needs. Judging from the ECOM surveys, the characteristics of Congolese households have changed little over the last five years. In 2011 as in 2005, (i) around 75 percent of households were headed by men, in both urban and rural settings; (ii) the vast majority of households (79.5) were monogamous unions; (iii) 10.2 percent of household heads were single; and (iv) 6.4 percent were widowed, divorced or separated.

466. These considerations of marital status are important for the stability or vulnerability of the household as the nucleus of social organization, and for the capacity of households to fulfill their social responsibilities in terms of educating their children and maintaining the health of the population. More refined analysis will be needed to determine whether there is a correlation between marital status and socioeconomic welfare or vulnerability indicators. This will allow the authorities to plan appropriate actions through programs for the inclusion of “vulnerable groups”. For the time being, it is important to note that more than a quarter of Congolese households are headed by “own-account workers” (26.6 percent), engaged essentially in rural occupations, and that unemployed household heads account for 16.4 percent of the total, almost as many as are employed in the private sector (16.6 percent).

Table 9.Main Indicators Of Household Living Conditions
Year of referenceAverage annual growth
Indicators20052011
Demographics
Total population (in millions)3.5514.0852.7
Number of households (in thousands)693.4955.16.2
Urban population (%)58.467.12.3
Female population (%)51.751.70.0
Population under 15 years (%)39.939.5-0.2
Population over 65 years (%)3.63.70.5
Urban households (%)58.467.12.3
Average household size5.14.3-2.8
Under 15 years39.939.5-0.2
15-64 years57.356.8-0.1
65 years and over3.63.70.5
Education and literacy
Access to primary education (%)86.691.50.9
Gross enrollment rate in primary (%)128.3117.7-1.4
Girls (%)123.5115.9-1.1
Boys (%)133.1119.5-1.8
Net enrollment rate in primary (%)86.889.30.5
Girls (%)86.389.40.6
Boys (%)87.289.20.4
Primary school satisfaction rate (%)27.330.82.0
Adult literacy rate (%)80.4830.5
Women (%)72.576.81.0
Men (%)89.190.20.2
Access to secondary education (%)58.572.63.7
Gross enrollment rate in secondary (%)65.384.54.4
Net enrollment rate in secondary (%)44.459.14.9
Secondary school satisfaction rate (%)28.333.42.8
Health
Access to health services (%)68.765.8-0.7
Health services need39.338.2-0.5
Utilization rate of health services (%)26.723.8-1.9
Patient satisfaction with health services (%)71.272.50.3
Female population receiving prenatal care (%)88.991.80.5
Employment
Employed population 15 years and over (%)5657.90.6
Underemployed population (%)9.327.820.0
Population 15 years and over employed in health and education (%)55.51.6
Population 15 years and over employed in agriculture and silviculture (%)33.837.81.9
Unemployment rate (%)19.46.9-15.8
Unemployment among 15-29-year-olds (%)36.712-17.0

Household Economic Situation

467. Generally speaking, the ECOM2 results show that the economic situation of Congolese households has improved over the last five years. The improvement can be assessed in terms of the following two dimensions: (i) the growth in net household assets (net of financial liabilities); and (ii) the growth in employment and occupations.

468. Net household assets were strengthened in recent years, with the resulting improvement in “economic capacities” and well-being, and a concomitant decline in economic vulnerability. Household assets comprise all the goods acquired by the household, through purchase, gift or inheritance, excluding the consumption of fungible goods (such as food products). They represent household productive goods (land, house, car, electric and electronic devices such as power generators, computers etc.) as well as leisure goods (houses, cars and household appliances such as television, telecommunication etc.). These assets are, then, good indicators of households’ productive capacity and of their social well-being.

469. The data on these assets, taken together, show an unambiguous improvement in household capacities and economic welfare. In particular, they reveal that: (i) a high percentage of urban households are homeowners (43 percent in 2011 and 47.8 percent in 2005); (ii) a growing proportion of households owns a television set (46.1 percent in 2011 and 20 percent in 2005); and has electric lighting (38.4 percent in 2011 and 28.0 percent in 2005). One particular feature stands out: over this period few households had a car (2.3 percent in 2011 and 1.8 percent in 2005). This meager increase in car ownership reflects, in part, the fact that public transportation is better developed in Congo than in neighboring countries, both in terms of the quality of vehicles and the density and safety of service, which is relatively affordable. This could help explain the low proportion of Congolese households with personal vehicles. More detailed analysis will however be necessary to support this assumption.

470. Employment. Rising household occupation rates confirm the favorable trend in economic capacities and conditions. Employment and, more generally, economic occupation are the most important means by which households can earn the incomes to acquire the goods and services needed for their well-being. However, employment alone does not guarantee economic well-being: the stability and growth of income are just as important for reducing insecurity and vulnerability.

471. The survey results show that, out of the active population of 2,541,132 (62.2 percent of the total population), 57.9 percent are gainfully occupied, and therefore earning income. The unemployment rate fell sharply between 2005 and 2011 from 19.4 percent (ECOM1) to 6.9 percent (ECOM2). This trend is evident both in urban areas (30.2 percent in 2005 and 10 percent in 2011) and in rural areas (6.3 percent in 2005 and 1.7 percent in 2011). At the same time, the rate of underemployment rose steeply, from 9.3 percent in 2005 to 27.8 percent in 2011, reflecting a situation of employment insecurity.

472. Nevertheless, unemployment continues to weigh heavily on the young in particular. According to ECOM, unemployment is highest among the 15-29 year age group, at around 12 percent, although it has improved considerably since 2005 (36.6 percent). Yet when “discouraged” jobseekers are taken into account, the youth unemployment rate is still higher.

473. Just as worrisome, employment status by sector indicates that many jobs are perhaps insecure and in low-productivity sectors. As in 2005, nearly two-thirds (62.9 percent) of the “gainfully occupied” are working for their own account. They are often engaged in informal, precarious and low-productivity activities where pay is low. On the other hand, there are fewer workers in the more stable and relatively higher-paying employment sectors such as large private firms (4.8 percent), the civil service (11.4 percent) and SMEs (7.7 percent). Agriculture and silviculture employ a large share of the working population (37.8 percent), followed by wholesale and retail trade (23.1 percent), and services (10.9 percent). By contrast, the mining and quarrying industry, where the highest paying private jobs are to be found, employs the fewest Congolese workers (0.9 percent). These figures confirm that most jobs are still in low-productivity and therefore low-paying sectors where job insecurity is high.

Household Living Conditions

474. In addition to assets and occupations, another important dimension of household well-being is the living environment and access to essential social services (education, health, housing etc.). In this respect, there has been an improvement in the living conditions and the economic and social well-being of Congolese households.

475. Housing. Housing in Congo is dominated by individual dwellings, and 57.7 percent of households are owner-occupants. This has changed little since 2005, when 64.4 percent of households owned individual homes. The homeownership rate is high, and this might suggest a sharp improvement in living standards. Unfortunately, this indicator is subject to ambiguous interpretations. For example, while rural living standards are, on average, well below those in the cities, the majority of rural households (83.4 percent) are homeowners, while almost half (49.2 percent) of city dwellers live in multiunit apartment buildings. This reflects the higher costs of urban land and construction compared to those in the countryside. In both environments, moreover, many properties are precarious hovels which are indicative of poverty rather than the comfort of a detached dwelling.

476. The trends are encouraging and they confirm the progress in household living standards. For example: (i) more than half of households (57.7 percent) own and inhabit individual homes; (ii) in 2011, compared to 2005, a greater proportion of dwellings were constructed of durable materials (55.0 percent were of cinderblock and bricks, versus 51.2 percent), rather than of clay or stabilized earth; (iii) a slightly higher proportion of households had flush toilets (7.8 percent versus 6.0 percent), and more households had domestic electricity connections (38.0 percent versus 27.7 percent). These indicators confirm the general trend toward a substantial improvement in housing quality and thus in the living environment of Congolese households over the last five years.

477. Water. Access to this precious commodity is still problematic, despite the abundance of the country’s water resources. Much of the population still draws its water from artesian wells (3.3 percent), or relies on rainwater (2.3 percent), watercourses and unimproved sources (17.1 percent). Recent years have seen heavy public investments in production and storage facilities for the urban water supply. However, the SNDE network is limited and aging, with high technical loss rates (30 percent). Rehabilitation and expansion of the network are major challenges for improving access to drinking water in the cities. In the countryside, on the other hand, efforts will be made to equip towns with drinking water systems and to provide improved springs, boreholes and wells for the villages.

478. Hygiene and sanitation. Public sanitary conditions have deteriorated, posing a challenge to the competent authorities, particularly in the management of household wastes. Garbage collection is in fact a problem for households and for local authorities alike. Appropriate facilities for treating solid and liquid wastes do not exist. The percentage of street bins has fallen from 6.1 percent to 1.9 percent. At the same time, the percentage of households dumping garbage in public spaces or in nature has risen by six percentage points (from 53.7 percent of households in 2005 to 60.0 percent in 2011). As well, the use of sanitary facilities remains low. While the number of flush toilets and “improved” WCs has increased, 9 percent of households were not using any sanitary facility in 2011 (compared to 7.8 percent in 2005), and only one household in two (52.4 percent) has an adequate sanitary toilet, with covered latrines predominating (43.8 percent). When it comes to the disposal of wastewater, only 10.6 percent of households use an appropriate system (sewer systems and drains). A large percentage of households dump their waste water into nature, the dooryard or the street (54.4 percent in 2005 versus 83.2 percent in 2011). This testifies to the pressing problems of public sanitation in large cities, and calls for urgent rehabilitation of public trash collection and hygiene services.

479. The results of ECOM2 show great shortcomings in this area. Despite the increased number of flush toilets and improved WCs, many households are not using any sanitary facility: 9.0 percent of households were defecating “out in the open” in 2011, compared to 7.8 percent in 2005. Uncovered latrines are used by 35.7 percent of households. 52.4 percent of households have adequate sanitary facilities, versus 51.9 percent in 2005; covered latrines are still used by 43.8 percent of households. When it comes to the disposal of wastewater, only 10.6 percent of households use an appropriate system (sewer systems and drains). A large percentage of households dump their waste water into nature, the dooryard or the street (54.4 percent in 2005 versus 83.2 percent in 2011). The number of households equipped with cesspools has declined [sic] (4.5 percent in 2005 versus 6.5 percent in 2011).

480. In short, the good results recorded in the socioeconomic areas, particularly with respect to employment and household assets, reveal a positive trend in the economic situation of Congolese households, but one that is offset by alarming tendencies when it comes to water and especially sanitation. These contrasting developments confirm the government’s concerns over water, sanitation and hygiene for the country as a whole. These concerns were the focus of debate in 2011 in preparation for the 2012 budget.

Household Access to Essential Services

Education

481. Since the early years of this century, the government has taken steps to revive the education system and to guarantee primary education for all, in accordance with the MDG. Achievements in this area include:

  • Effectively free access to primary education.

  • Free schoolbooks.

  • The recruitment of more than 6,000 primary school teachers between 2002 and 2008.

  • The revival of adult literacy and informal basic education activities nationwide.

To ensure the effective presence of teachers in the classroom, a census was conducted. The education system can be analyzed by subsector, as described below:

Preschool education. The coverage rate for preschool education is still low (12.3 percent in 2009), despite the rising numbers of preschool pupils, from 5,600 in 1995 to 39,652 and 2009, for an increase of 33.6 percent per year. Preschool education is essentially limited to urban areas and to a certain socioeconomic class. This situation is detrimental to those children who move directly into primary education without preschool experience. Preschool education faces the following problems:

  • The coverage rate of daycare centers and preschool education facilities across the country is low.

  • The model currently used in preschool education centers is inappropriate to the local setting.

  • Coverage is unequal between rural and urban areas.

  • Special early childhood education is only a marginal feature of the education system.

  • Insufficient financial and material resources are devoted to preschool education, a which is not included in free schooling.

  • Teaching equipment and supports are inadequate in nearly all preschool education centers.

  • The objectives, contents and methods of education are not adapted to children’s emotional, psychomotor and intellectual needs or to the socio-cultural environment.

  • The training of private school teachers is inadequate and there is no continuous training for publicly-employed teachers, with the consequent repercussions on learning.

  • No attention is paid to holistic development integrating health, nutrition and education aspects.

  • There is a lack of synergy in the interventions of the ministries involved in early childhood questions.

  • Personnel in charge of early childhood programs have inadequate qualifications.

Primary education

482. The results in primary school have improved in recent years. With the support of technical and financial partners, the government has taken steps to improve access, quality and productivity in the education system. These actions include: (i) free tuition in the public primary and secondary systems; (ii) free schoolbooks; (iii) the recruitment of a significant number of new teachers; (iv) strengthened service capacity through school rehabilitation and construction. The ECOM2 results indicate improved access to education services and better outcomes in terms of enrollment rates and family satisfaction with education services. Between 2005 and 2011, the rate of access to primary school improved perceptibly from 86.6 percent to 91.5 percent. This was accompanied by an almost equivalent increase in the net primary school enrollment rate (from 86.8 percent to 89.3 percent) and in the primary school satisfaction rate (from 27.3 percent to 30.8 percent).

483. However, there are still major shortcomings in the internal efficiency of the Congolese education system. The primary school completion rate is still low (83 percent in 2011), with a dropout rate of 5.7 percent. As well, gender gaps have narrowed: the girls-boys parity index improved from 92.8 percent in 2005 to 97.1 percent in 2011. This shows that, in the education field, gender parity is indeed a reality. Yet regional disparities persist. In 2011 the access rate was considerably lower in rural areas (42.5 percent) than in the cities (84.7 percent), despite lower population numbers and density in the countryside. This combination of a low enrollment rate and a relatively small population points to the need for specific policies for rural areas.

484. Primary education has seen significant qualitative improvement in recent years. The number of schools rose from 1,542 in 2003 to 3,008 in 2007. This trend reflects the emergence of private institutions, of which there were 1,154, including 63 that were conventionné (officially recognized) in 2007, versus 601 in 2003. Enrollment numbers in public education have increased more slowly than in the private sector, although there was a jump in 2009, two years after free tuition was introduced. However, primary education still faces a number of problems:

  • High repeater rates.

  • Excessive reliance on support personnel (i.e. non-teachers) in the classroom because of the recurrent shortage of teachers.

  • High pupil-teacher ratios in large cities.

  • Difficulties in financing education projects.

  • Difficulties of access (supply/demand) in remote areas and among vulnerable population groups.

  • The scarcity of alternative education solutions.

Table 10.Key Education Indicators
INDICATORS200520082011PRSP I target
Gross enrollment rate in primary128.3111.117.7N/a
Gross enrollment rate of girls in primary123.584115.9N/a
Girls/boys parity index (% *)92.88997.1N/a
Gross primary school admission rate11395113N/a
Gross primary school completion rate7783N/a
Pupil/teacher ratio5275.750
Source: ECOM 1 and 2, GTDR Education Report

Gross enrollment rate for girls relative to that for boys.

Source: ECOM 1 and 2, GTDR Education Report

Gross enrollment rate for girls relative to that for boys.

Secondary education

485. The ECOM results confirm strong growth in the secondary enrollment rate. The gross enrollment rate rose from 65.3 percent in 2008 to 84.5 percent in 2011, for a substantial gain of 19.2 percentage points in five years. This gain may in fact be due to the government’s introduction of free tuition in 2007. The rate of access to secondary school increased from 58.5 percent in 2005 to 72.6 percent in 2011.

486. Despite the good performance of recent years, many children are still missing out. Congo compares poorly in this regard with the average for sub-Saharan Africa and for emerging countries: 4.9 percent of school-age children 12 to 18 years were effectively “left behind” in 2011, a considerable number given the small size of the country’s population. The satisfaction rate with secondary education improved from 28.3 percent in 2005 to 33.4 percent in 2011.

487. The total number of students enrolled in the first cycle of secondary school showed a sharp increase between 2005 and 2010. The student body increased by some 8 percent, from around 191,000 to 206,000. Despite this progress, the coverage rate is far from 100 percent. At the lycée level, the student body also grew, but the coverage rate remains low, and there are regional disparities between rural and urban areas (32.8 percent versus 69.7 percent).

488. Compared to other countries, the secondary school enrollment rate is still low, and the government is concerned at the system’s inefficiency: a relatively low rate means a shortage of human capital equipped to absorb new technologies, to boost productivity, and to contribute to modernization of the economy. Given the small size of the country’s population, the government will therefore need to set a target of 100 percent enrollment in primary and secondary school, in order to assure the human capital needed for modernizing society and industrializing the economy, as envisioned in the “Future Path” [“Chemin d’Avenir”]. The government is determined to redouble its efforts to address this challenge over the next five years. The specific objectives, strategies and programs in this field are described in chapter 11 of this paper.

At the present time, secondary education (first and second cycles) faces the following problems:

  • Institutions are run down and obsolete.

  • There is a shortage of classroom space, especially in urban areas.

  • Laboratories are nonexistent or poorly equipped in nearly all institutions, meaning that science instruction is strictly theoretical.

  • There is a shortage of teachers, especially in the sciences.

  • Teachers have inadequate qualifications.

  • There is excessive resort to substitute personnel (supply teachers, volunteers) in the classroom.

Moreover, the Congolese education system must address several other factors that are holding back its development:

  • Under-representation of girls.

  • Unequal distribution of enrollment (which is heavily concentrated in the large cities).

  • A high rate of monetary poverty among households.

  • Shortage of assistance and support services (remedial courses, school transport, etc.).

Literacy

489. The literacy issue concerns the population 15 years and older. The results of the ECOM surveys show that the literacy rate has increased, rising from 80.4 percent in 2005 to 83 percent in 2011. However, these rates conceal sharp disparities between urban (91.5 percent) and rural areas (63.2 percent). The gender analysis also reveals a disparity in favor of males. The analysis by socioeconomic group finds that public sector employees have higher literacy rates in comparison, for example, to independent agricultural workers and other employees.

Technical education and vocational training

490. As with basic secondary education, technical instruction and vocational training are essential for reinforcing human capital. They supplement basic education, serve the needs of the economy, and prepare students to enter the labor market.

491. In practice, the authorities recognize that efforts to date have been insufficient and the results well below expectations. This sector still suffers from weaknesses in terms of its functioning and its outcomes. The Technical and Vocational Education (TVE) sector has only 74 institutions, more than 60 percent of which are concentrated in Brazzaville and Pointe-Noire, and 2,344 government-employed teachers. TVE accounts for 10 percent and 37 percent, respectively, of the student body at the collège (junior secondary) and lycée (senior secondary) levels. Because of the system’s limited capacity, TVE is not yet in a position to meet the growing needs of the Congolese economy for skilled workers and qualified technicians.

492. Different kinds of training have been organized to boost the operational capacities of the TVE sector, which is now hiring new teachers and so improving the student/instructor ratio. This subsector betrays a number of shortcomings that are accentuating the difficulties and weaknesses of the system. The most pressing issues are: (i) the insufficient and uneven distribution of facilities; (ii) the uneven distribution of personnel across the country; (iii) the lack of infrastructure and equipment; (iv) an aging teaching body with inadequate refresher training; (v) the weakness of the linkages with the workplace and with related sectors and institutions in other countries; (vi) training that is inappropriate to real needs; (vii) programs that are poorly designed and often incomplete; (viii) a limited range of training fields and difficulties for graduates in accessing higher education; (ix) certain streams provide training that leads nowhere; and (x) lack of awareness raising about HIV/AIDS and preventive measures.

493. These shortcomings were highlighted in the review of sector strategies and programs in the PRSP 1 completion report. The authorities have taken due note of them and intend to redouble their efforts to strengthen the vocational education system, its intake capacities and its outcomes. This is regarded as an imperative, for the country requires stronger human capital to pursue its objectives of economic modernization and industrialization as called for in the Chemin d’Avenir.

Higher education

494. The government has taken steps to expand the capacity to offer higher education and to improve its quality and performance. To overcome the capacity limitations of the Marien Ngouabi University, the higher education sector has been opened to private interests: as a result, several institutions have been created, and some have been officially recognized. Recent developments include the following: (i) application of programs under the LMD (licence-master-doctorat) system; (ii) supervision and inspection of officially recognized private higher education institutions; (iii) redefinition of the missions of the Marien Ngouabi University as part of the decree reorganizing it; (iv) construction of a new library within the framework of Sino-Congolese cooperation.

495. However, the subsector betrays some shortcomings, notably these: (i) until 2010, private higher education institutions were not officially recognized; (ii) taxes and fees (license fees, flat tax on salaries) for institutions performing a public service are hard to justify; (iii) imports of technical and teaching materials are not exempt from customs duties; (iv) there is no partnership with local businesses to promote on-the-job training; (v) the banking sector is reluctant to finance graduates’ projects.

Box 4.The Merien Ngouabi University and The Licence Master Doctorat (LMD) System

1. Created by ordonnance 29/71 of December 4, 1971, Marien Ngouabi University initially embraced four institutions. 40 years later, it has 11 institutions, including five faculties, three institutes and three schools. These are the Faculty of Law, Faculty of Economic Sciences, Faculty of Letters and Human Sciences, Faculty of Sciences, Faculty of Health Sciences, Superior Institute of Management, Institute of Rural Development, Superior Institute of Physical and Sports Education, National School of Administration and the Magistracy, National School of Advanced Studies (Ecole nationale supérieure), and National Polytechnic School. At its creation, Marien Ngouabi University had only 3,000 students; today it has more than 20,500. This growth is placing great strains on the institutions’ infrastructure and facilities.

2. Changes in the organization of training in Europe, with introduction of the Licence Master Doctorat (LMD) system, have altered the higher education landscape significantly and have had major repercussions on training systems in CEMAC countries. The main decisions concerning the LMD reform were taken at a conference of rectors in October 2003 in Yaoundé, Cameroon. Three principal points were adopted at that time: (i) to initiate, in 2005 and 2006, reforms to the structural organization of higher education in order to adapt the university curriculum to the LMD system; (ii) to take measures in the course of 2004 to strengthen capacities for regional integration by establishing a network of university and research institutions in the CEMAC zone; and (iii) to seek technical assistance from the European Union for training members of university and research institutions in CEMAC countries in the formulation of projects eligible for the ACP-EU program of cooperation in higher education.

3. It was against this backdrop that the various academic councils of Marien Ngouabi University adopted texts on the teaching organization of university and research establishments and on studies in the LMD system; those texts were to be signed during 2009. However, the organization of training under the LMD system might suggest that the system is merely a pedagogical reform. On the contrary, it is an in-depth and comprehensive reform that also affects the administrative management of Marien Ngouabi University. It entails new demands that, if not handled carefully, will accentuate the problems that the University is experiencing today. (For example, the law faculty has more than 9,000 students, and they must get up at 3 AM in order to secure a seat in the lecture hall. In the faculty of economic sciences, which has around 5,000 students, the first-year courses are given in two shifts).

4. These demands in terms of coaching and guidance may accentuate (i) the time management problem (additional hours, outreach work, vacations etc.) and (ii) the costs of directing research work (dissertation, doctoral thesis). In terms of infrastructure and equipment: (i) the shortage of classrooms and lecture halls; (ii) the shortage of computer equipment; (iii) lack of up-to-date libraries, and (iv) serious computerization problems in various institutions that lack visibility (particularly via the web). Congo must therefore address the challenge of economic diversification and modernization so that Marien Ngouabi University can become part of this globalization of instruction, which demands harmonization and standardization of measures for higher education, research and vocational training.

Source: STP/DSCERP

Health and HIV-AIDS

496. The results of the Household Economic Survey (ECOM) confirm the disappointing trends observed in other health statistics. Substantial efforts were made in connection with Congo’s first Poverty Reduction Strategy Paper (PRSP-1) and the National Health Development Program (NHDP). During the PRSP-1 period (2008-2010), these programs aimed to reduce infant mortality (from 75 deaths per 1,000 live births to 30 deaths per 1,000 live births), maternal mortality (from 781 to 390 deaths per 100,000 live births) and to fight major endemic diseases—specifically malaria, tuberculosis, and the HIV/AIDS pandemic. In addition, HIV/AIDS was one of the pillars of PRSP-1.

497. Performance levels are still inadequate. However, we observe that these indicators have improved substantially. Trends, at the same time, seem to be less favorable. In any case, despite the efforts that have been made, health indicators are still cause for concern, particularly as compared with other countries. In fact, we observe even higher levels of maternal and neonatal mortality and lethality levels for malaria.

Table 11.Key Health Indicators
Indicators200520092011PRSP 1 target level
Infant mortality rate (per 1,000 live births)87.58066.856.25
Child mortality rate (per 1,000 live births)117127117
Maternal mortality rate (per 100,000 births)781740
Health service attendance rate383937
Health service attendance rate (children 0-5 years of age)7886ND
Births assisted by medical and/or paramedical personnel838693
Prenatal consultation rate8686
Rate of HIV/AIDS prevalence in pregnant women (in prenatal visits to health centers)2.222.1Less than 6 percent
Malaria lethality rate per population of 10,000ND13514062.5
Source: Health Demographic Survey (EDS1), Urban Survey on Employment and the Informal Sector (ESIC 1) and Research and Planning Directorate (DEP)/Ministry of Public Health (MSP).
Source: Health Demographic Survey (EDS1), Urban Survey on Employment and the Informal Sector (ESIC 1) and Research and Planning Directorate (DEP)/Ministry of Public Health (MSP).

498. This situation has persisted for a number of reasons, such as difficulties in accessing high-quality health care and targeted programs. The infant/juvenile mortality rate (assessed at 117 deaths per 1,000 births—EDS, 2005) may correlate with insufficient immunization coverage. We note that one out of three children does not have access to measles immunization.

499. Nutrition problems are also a major cause of morbidity and high mortality levels. Besides the shortcomings in available energy due to a shortage of food for some, and eating disorders for others, reflected by malnutrition with the resulting worsening in health conditions with the upsurge in emerging disease (AVC (cerebrovascular accident), hypertension, obesity…). In fact, agricultural and fish production are insufficient to achieve public food security, as many cannot afford high-cost imported goods. This factor explains why many poor households, who are unable to cover all of their nutritional requirements, suffer from hunger and various fragile conditions, contributing to the high levels of morbidity and mortality in Congo. Pregnant women, elderly persons, and above all, children are most vulnerable to food insecurity.

500. In fact, national food production is dominated by manioc and tubers, whereas cereals, livestock and oilseed products are largely imported. According to a 2007 FAO study on the food balance sheet in the Congo, average consumption is 2512 Kcal per person per day, but a more thorough analysis of food security and vulnerability (2009/2010) has highlighted the fact that the diet of most households is lacking more in quality than in quantity. A nutritional assessment carried out by the WFPs in Brazzaville, Pointe-Noire, Likouala and Plateaux, measured the rate of Severe Acute Malnutrition (SAM) at 3,8%, whereas the Global Acute Malnutrition (GAM), at 9,5% is lagging in growth at 15,4%. The analysis carried out at the departmental level showed that the departments of Lékoumou, Plateaux and Cuvette are the most vulnerable. The northern part of Pool could also be included here, given its recent past.

501. To reverse this situation, it will be necessary to strenghthen nutritional education slightly. This would take place through, among others, the introduction of nutritional training modules (for mothers, adults and students) on the one part, and the improvement in the living conditions of household (salaries, pensions, bursaries, school canteens, meal vouchers, …).

502. It must be highlighted that performance levels in the health sector are still poor, even though the authorities have redoubled their efforts to achieve their defined goals. The significant growth in resources allocated to the sector bear testimony to this. As an indication, during the past three years, investments in the health sector increased from F CFA 29,8 billion in 2010 to F CFA 47 billion in 2011 respectively, then to F CFA 94 billion in 2012, the “year of health”. But more relevant programmes of better quality will be necessary, as well as greater coherence and diligence in the implementation to reverse the situation.

Box 5.Improving Performance and Enhancing Productivity in University Hospitals

  • Established under Law 008/87 of February 2, 1987, the university hospital (CHU) is the reference hospital in Congo, encompassing a substantial number of health specialists and accommodating the largest number of patients. It is responsible for tertiary care, training, and biomedical research. Accordingly, it is in contact with Université Marien Ngouabi and its staff includes physicians on the faculty of the School of Science and Health.

  • The CHU has the following specializations: Pathological anatomy; Medical biology; Surgery; Cancer treatment; Dermatology; Pediatrics; Rheumatology; Gastroenterology; Hematology; Infectious disease; Metabolic and endocrine disease; Nephrology; Ophthalmology; Otorhinolaryngology (ORL); Pneumology; and Urology.

  • Despite the presence of specialists, patients are often evacuated to hospitals in the Maghreb and Europe, as the equipment is technically obsolete (technological plateau). In addition, the CHU does not cover a number of pathologies and certain medical operations (heart or brain operations, organ transplants, hemodialysis, etc.) cannot be performed owing to the shortage of equipment.

    In addition to these shortcomings, the CHU faces operational problems, specifically in the supply of drugs and other essential supplies such as oxygen. In addition, as there are no elevators, patients are carried on stretchers by porters who must be paid by their families. To correct the shortage of equipment in the CHU, the government decided to invest in its renovation in certain areas. The Ophthalmology, Stomatology, Gynecology, and ORL departments, for example, have been modernized.

  • In addition to the modernization of the CHU, the country must be equipped with reference health centers. As a result of this concern, government made 2012 a year for health, and in this connection, decided to make all quality health care services universally available. The following activities are planned: (i) rehabilitation and equipment of health care centers; (ii) reorganization and modernization of hospitals; (iii) creation of dialysis centers and specialized hospitals; and (iv) building of health institutions that meet normal standards.

Source: Technical Secretariat (ST)/DSCERP, and International Development Consulting.

HIV/AIDS

503. The HIV/AIDS pandemic is an ongoing concern. According to the results of the survey on seroprevalence and AIDS indicators (ESIS-C), the situation has improved only slightly as the overall prevalence rate for HIV (both genders combined) changed from 4.2 percent in 2003 to 3.2 percent in 2009, registering a gain of one point. However, we observe some progress in HIV prevalence at the department level. While in 2003 the highest prevalence rate was 9 percent in certain areas, in 2009, the highest rate was 4.8 percent in the region of Lékoumou, 4.6 percent in Pointe-Noire, 4.4 percent in the region of Niari, and 4.0 percent in the region of Sangha. In other areas, the prevalence rate was below 4 percent. With the exception of Brazzaville, we observe higher prevalence rates in areas where substantial levels of economic activity are present, which is indicative of a greater concentration of sex workers. The government should support educational efforts to promote the use of condoms in sexual relations, specifically targeting men. Surveys indicate that more women are now using condoms (an increase from 21 percent in 2003 to 29 percent in 2009). By contrast, fewer men are using condoms (a decline from 42.8 percent to 28 percent).

Figure 6.Distribution of Seroprevalence by Department

Source: ESIS 2009

Table 12.Comparative Statement of Public Efforts in Education and Health
Country2000200120022003200420052006200720082009
Public education expenditure (as a percentage of total public expenditure)
--
Congo, Rep.--9109811.511.411.411.4
Burundi1314131313182223
Cameroon10121517171615191719
Gabon
Central African Republic1613131413-1212-
--
Congo, Dem. Rep.---
---
Public health expenditure (as a percentage of total public expenditure)
Congo, Rep.54565555
Burundi9791012121212
Cameroon79888868
Gabon6666666666
Rwanda818171819181817--
Congo, Dem. Rep.119912141817--
HIV/AIDS prevalence rate in adults 15-29 years of age (in percent)
Congo, Rep.4.2444443.
Burundi5444443.3
Cameroon10.86.86.86.86.86.85.1
Gabon7776665.2
Rwanda4443332.9
Congo, Dem. Rep.2222222
Source: Permanent Technical Secretariat (STP)/DSCERP, World Bank Data, World Development Indicators (http://databank.worldbank.org/).
Source: Permanent Technical Secretariat (STP)/DSCERP, World Bank Data, World Development Indicators (http://databank.worldbank.org/).

Scientific research

504. Scientific research is conducted at Université Marien Ngouabi as well as in research and development agencies. The various activities conducted in this connection have produced satisfactory results in the following areas:

  • Forestry: development of subculturing for eucalyptus and afara; creation of high-productivity industrial varieties of high-productivity eucalyptus; creation of clonal plantations;

  • Agriculture: layering and grafting of fruit trees; micropropagation of food and fruit crops; in-vitro preservation of germplasm for food crops; creation of varieties of cassava resistant to bacterial wither;

  • Intellectual property: during the period 2003-2007, 111 applications for protection were submitted to the African Intellectual Property Organisation (OAPI).

Further, studies conducted on flora and vegetation have made it possible to: (i) establish a catalog of vascular plants assessing flora of Congo at 4,397 species among 198 families and 1,338 genuses; and (ii) create a national herbarium in Brazzaville accommodating nearly 4,500 species.

However, some research on fish in the Congolese continental waters, snakes and amphibians, and mammals is still fragmentary.

505. Congo now has a National Plan for Scientific and Technological Development (PNDST) for 2009-2013, for which the implementation is covered by two coordination and cooperation agencies: a higher council for science and technology and an inter-ministerial council for science and technology.

However, the success of scientific research and higher education in Congo is subject to ongoing constraints, as a result of internal (resources, management, efficiency, etc.), external (sociopolitical problems, support from development partners for which the sector is not a priority), and cross-cutting issues (population explosion, expansion in HIV/AIDS, gender disparities, cultural and socioeconomic constraints, etc.).

506. Where scientific cooperation is concerned, Congo has also benefited from a number of agreements and conventions to stimulate research activities in certain areas and on certain scientific topics.

Poverty

507. During the period 2005-2010, the Congolese economy registered a sound annual average growth rate of approximately 6 percent. At the same time, while confirming prior estimates, the ECOM 2 Survey confirmed that the Congolese population grew at an annual average of 2.7 percent during the period 2005-2011. If we cross check these two estimates, we note a substantial increase in per-capita income averaging 4.4 percent per annum during the period. This performance places Congo among the highest performing countries in sub-Saharan Africa in terms of growth during the period.

508. While it constitutes the most important factor in poverty reduction, income growth alone is insufficient. The distribution of growth and income by sector, and more generally speaking, trends in economic and social development inequalities are also important factors in the dynamics of poverty. These factors are analyzed in the sections below, following an overview of the scope and recent trends in poverty in Congo.

Table 13.Demographic Dynamics of Congo, 2005-2007
Population LocationECOM 2005 (Estimates)General Population and Housing Census (RGPH)
Population3,551,5003,697,490
Share of population (percent)
Brazzaville29.037.1
Pointe-Noire23.519.3
Other municipalities5.96.7
Semi-urban7.010.0
Rural areas34.626.8
Total100.0100.0
Average annual growth rate 2005-20072.0 percent
Growth rate between censuses 1984-20072.9 percent
Sources: National Center for Statistics and Economic Research (2005 and 2007).
Sources: National Center for Statistics and Economic Research (2005 and 2007).
Table 14.Comparison OF Populations of Young Persons and Adults 2005-2007
Age groupECOM 2005 (Estimates)RGPH 2007
Total young persons67.867.5
0-4 years13.715.1
5-9 years12.712.4
10-14 years12.711.2
15-19 years11.410.3
20-24 years9.39.6
25-29 years7.99.0
Total adults32.232.5
30-34 years6.57.8
35-39 years5.96.5
40-44 ans4.74.9
Over 44 years15.113.3
Total100.0100.0
Sources: National Center for Statistics and Economic Research (2005 and 2007).
Sources: National Center for Statistics and Economic Research (2005 and 2007).

Scope of Poverty According to Quantitative Estimates

509. The results of ECOM 2, which are in production, will make it possible to assess the incidence of and trends in monetary poverty during the period 2005-2011. However, the results that are now available on trends in household well-being, as analyzed in the preceding sections, can be used as a basis to estimate poverty trends in correlation with trends in household well-being indicators. This micro approach was crossed with a more macro approach in which developments in the monetary poverty rate incidence correlate with average per-capita income and the income distribution variance.

510. If we cross the results from ECOM 2 with the movements in the non-petroleum sector growth rate, we can assess that the rate of monetary poverty has declined substantially during the past five years of sustained reforms. The incidence declined from 50.7 percent of the population in 2005 (ECOM 1) to ** percent in 2011 based on macroeconomic performance and micro trends reported by ECOM 2. Although still provisional, these results are in line with the movements in in household well-being indicators and the favorable performance in the economic growth, employment, and occupation rates.

511. These results show that approximately ** out of ** Congolese nationals were poor in 2011, as opposed to one out of two in 2005. The results in fact show that just under ** percent of the Congolese population lives under the poverty line (CFAF ** per day in 2011), as compared with 50.7 percent in 2005 (CFAF 839 per day in 2005). In other words, approximately ** million out of 4 million Congolese citizens in 2011 registered average annual income (average annual consumption) levels below the national limit of CFAF ** per year.

512. It is quite encouraging to observe the contribution from growth, along with social development, and the substantial reduction in inequalities. If we analyze the breakdown of trends in the poverty rate into the growth and distribution effects, we find that the bulk of the reduction in the poverty incidence (approximately ** points out of a total gain of ** points) can be attributed to sustained growth in average per-capita income (4.4 percent); while the effect of improved income distribution has also come into play (see Table **). These results clearly show that the government’s efforts to sustain growth, diversify the economy, and strengthen the social sector have already led to a significant impact on poverty reduction.

513. In Congo, poverty, which is common to almost all sub-Saharan African countries, is still more severe in rural areas than it is in urban areas. However, poverty reduction seems to be less pronounced in rural areas than in urban areas. Rural and semi-urban areas in fact already registered substantial poor sectors in 2005 (64.8 percent and 67.4 percent, respectively) as compared with the cities of Pointe Noire and Brazzaville (33 percent and 42 percent, respectively). In light of the trends in the household well-being indicators analyzed above, the gap between rural and urban areas can only have persisted or worsened.

514. The key lesson for programs is the persistence of poverty, which is still severe in rural areas. The gap between rural and urban areas has also persisted, as observed in analyzing progress in terms of household well-being, and which is confirmed in the analysis of the poverty incidence, which underscores the increased emphasis the authorities should place on rural development. Quality must be enhanced and execution of rural development programs must be intensified, in economic activities (agriculture, stock breeding, etc.) as well as for infrastructures (rural roads and tracks, water, etc.). The government has clearly acknowledged the foregoing issues and is determined to intensify and optimize its efforts to address rural development. This issue has also been incorporated into the strategy for balanced development.

Household Perceptions of Poverty and its Determinants

515. The quantitative poverty analysis was supplemented with a qualitative analysis to gain an understanding of how households themselves perceive the poverty situation, their assessment of the causes of poverty, and how they evaluate the effects of poverty reduction strategy implementation. A subjective poverty component was incorporated into ECOM 2 to gain an understanding of how households assess their day-to-day living conditions.

516. Poverty “perceived and experienced” by households is still more severe than the poverty “measured” by surveys. In general, most of the Congolese population tend to consider themselves poor in a country they deem to be rich. More importantly, poverty experienced and perceived by households seems to be more severe than poverty observed with quantitative measurements. In other words, households consider themselves to be much poorer than trends in the quantitative indicators would indicate.

517. This mismatch between “experienced reality” and “observed reality” is often indicative of a greater problem of social cohesion: the perception or real situation of substantial economic and social inequalities. In fact, households may often consider themselves to be “more impoverished” than they are in absolute terms because they see other persons who are richer and who are enriching themselves further. In other words, poverty may increase in relative terms while it is in fact on the decline in absolute terms. This situation is often observed in countries registering substantial disparities, particularly in petroleum exporting countries, as shown in the poverty analysis in countries of the subregion (Equatorial Guinea, Gabon, etc.).

518. The Congolese authorities are highly attentive to these mismatches, and are well aware that they can cause social unrest and affect the credibility of poverty reduction and inclusion policies. This could undermine the effectiveness of such policies, which depends greatly on the extent to which the public believes in them, owns them, and works towards their success. Experience in emerging countries confirms that public support for development programs and the change of attitudes from cynicism and defeatism to hope, diligence, and perseverance is prerequisite for social consensus and the success of emergence strategies. The Congolese government therefore intends to intensify its efforts to reduce inequalities and reduce experienced, perceived, and observed poverty.

519. Access to employment and essential services is also a determinant factor in perceived and experienced poverty. These factors can also explain the discrepancy between trends in poverty as observed and experienced by the public. In fact, household income may have registered favorable trends; while the standard of living may have deteriorated at the same time, and while essential services have become less available or accessible. This can also cause a mismatch between “income” poverty and poverty in terms of living conditions.

520. For this reason, poverty analysis must be supplemented with an analysis of the economic and social environment and factors connected with household well-being. In this connection, perceptions confirm the objective trends discussed above. Satisfaction rates have improved substantially in the area of education, although very marginally in health—findings consistent with the objective results. Accordingly, the perception of poverty factors has changed little between the two surveys. In general, the public continues to associate the state of poverty with a number of well-known economic and social problems. According to ECOM 2, the main causes of poverty are still: (i) shortage of employment (91.5 percent in 2011, as against 86.0 percent in 2005); (ii) poor public management (62.9 percent in 2011, as against 49.0 percent), (iii) insufficient income (58.9 percent in 2011, as against 41.0 percent); and (iv) corruption (51.6 percent in 2011, as against 15 percent in 2005). We also observe different forms of socioeconomic marginalization and exclusion. Well-being or poverty performance levels in these other areas are discussed below.

Other Dimensions of Human Development

Women

521. Gender. Although a number of texts have been adopted (the Constitution, Law on Education, Law on Elections, etc.), establishing legal equality between men and women, and while most of these international instruments having the same purpose have been ratified, the situation of women in Congo is still characterized by well-known discrimination at the legal levels (tax law, criminal law, family code, and social and economic rights) to which we can add de facto inequalities (Levirat marriages, widowhood customs, estates, and gender-specific violence). In formal education, despite an egalitarian access policy, we observe disparities between girls and boys that can be explained by a substantial dropout rate for girls from the secondary level, attributable to poor guidance, early pregnancy, and poverty of the family, inter alia.

522. The recent analysis of the situation shows that, in the past few years, Congolese women have fought bravely and tenaciously for their emancipation, in order to enjoy all of their rights. The government has made every effort to involve women fully in the decision-making process. Despite the persistence of some negative trends, gender issues have taken on a truly national dimension.

523. The improvement of the status of women now faces a number of constraints, including: (i) insufficient policy support for gender issues, preventing them from being effectively addressed in all development projects, programs, and policies, despite the 2008 adoption of a national gender policy accompanied by an action plan for 2009-2013; (ii) insufficient representation of women in decision-making circles; (iii) persistence of violence against women, with those responsible going unpunished; (iv) the influence of retrograde customs and practices as women do not understand their rights; and (v) access to and control of resources and means of production.

524. Where women’s participation in decision-making processes is concerned, a decline in the number of seats occupied by women in the national parliament was observed: the proportion of seats occupied by women has declined from 12 percent in 2005 to 8.6 percent in 2009 and to 6 percent in the current parliament. A study on the status of the representation of women in other institutions in the republic conducted in 2008 indicates that five women out of 39 (12.8 percent) are in government, four out of 21 (9.5 percent) serve in the Supreme Court, six out of 36 (16.7 percent) can be found in the High Court of Justice, and one out of nine (11.1 percent) serves in the Constitutional Court; while in the departmental and municipal councils, representation for women is estimated at 12 percent.

Table 15.Key Gender Indicators
Indicators200520082011
Index of parity between girls and boys enrolled in primary school0.930.920.97
Index of parity between girls and boys enrolled in secondary school0.990.990.99
Index of parity between girls and boys enrolled in higher education0.510.650.67
Seats occupied by women in the national parliament (percent)128.66 percent
Source: STP/DSCERP.
Source: STP/DSCERP.

Social Security

525. Social security. The failure of past development policies, armed conflicts, and social disintegration as a result of many breakdowns in the social system (deterioration of practices and customs, social and generational conflicts, etc.) have not only worsened the living conditions for the population, but have also led to a breakdown in social equilibria that had served as a sort of social security system for the most vulnerable groups. The breakdown of this safety net has meant that more of the population is at risk. In addition to the traditional vulnerable groups (orphans, very young mothers, retired persons, unemployed young people, and handicapped persons), other vulnerable groups have appeared as a result of the sociopolitical unrest (disaster victims, displaced persons, and veterans). It was found that national solidarity requirements are insufficiently covered. Solidarity activities are incumbent on the Ministry of Social Affairs, Human Activity, and Solidarity. Social security activities are also carried out by humanitarian associations focusing on children in difficult situations, handicapped persons, the elderly, etc.. Despite the efforts of various institutional players, social security still lacks the features of a comprehensive, coherent system.

526. The national social security system is limited to benefits from the Civil Service Retirement Fund [Caisse de Retraite des Fonctionnaires—CRF] and the National Social Security Fund [Caisse Nationale de Sécurité Sociale—CNSS] covers only 15 percent of the population, excluding, de facto, the majority of the Congolese population, who are operating in the informal or small farming sector. A national social security policy is now being studied with support from agencies in the United Nations system.

527. Insufficient social coverage reflects the absence of a coherent social security system in the country. In fact, the coverage of social protection measures is limited to civil servants and employees in the private sector, despite the drafting and adoption of a framework law overhauling the social security system, which institutes social security entailing a number of components to cover the majority of the population. The number of retired persons in the National Social Security Fund (CNSS) increased from 34,594 persons in 2009 to 35,205 persons in 2010, while the personnel covered by the Civil Service Retirement Fund (CRF) amounted to 18,950 persons in 2010.

528. The current situation reflects the fact that the pay-as-you-go model of one retired person per four wage earners is no longer at financial equilibrium. The current demographic dynamics now require the Congolese economic system to create more formal employment opportunities to ensure that the two retirement funds reach equilibrium among the generations and that they remain sustainable.

529. The inadequacy of the social security system in Congo is illustrated by the existing mechanisms that do not cover all risks of vulnerability and weakness and do not reflect the fact that only a small proportion of the population—in this case, workers in the formal sector, is covered. However, the government intends to pursue its efforts, above all, to promote women and other vulnerable groups in keeping with its vision of inclusive development.

530. As a result of the absence of a national policy for families, the latter face numerous problems of housing, food, education, health, and transportation, in particular. The situation of children is of particular concern as described by the indicators presented in the areas of health, nutrition, and education. We note, however, that some progress, including the following, has been made:

  • - Measures to provide free benefits (school fees, malaria treatment for children 0-15 years of age, identification of women considered to be suffering from obstetric fistulas, socioeconomic reintegration of women who have been cured of this condition, and Cesarean procedures);

  • - The transportation allowance of CFAF 10,000 for civil servants and the 10 percent increase in the minimum wage paid to government employees, from CFAF 64,000 to CFAF 70,000;

  • - The increase of more than 100 percent in family benefits paid monthly by the state for the children of civil servants. The benefits were increased in 2011 from CFAF 1,200 to CFAF 2,000 and have now been increased to CFAF 5,000 per child per month.

  • - The 50 percent increase in stipends.

During 2009-2010, the government also undertook the care of 22,106 orphans and other vulnerable children, reintegration of 300 street children, and school enrollment for 411 children.

531. Where handicapped persons are concerned, following the preparation of the national action plan for the decade of handicapped persons, the government undertook care for 1,600 handicapped persons during 2009 and 2010.

532. For indigenous people, the government enrolled more than 4,011 children during 2009 and 2010 and 4,864 benefited from other programs during the same period. The government also promulgated Law 5/2011 on protection and promotion of the rights of indigenous peoples (civil, political, social, cultural, and ownership rights).

533. Where women’s issues are concerned, women occupy a central place in social organization and play a critical role in the balance of the family and in society. They constitute the cement that holds the family unit together. Women represent more than half of the population of Congo (51.4 percent according to the ECOM 2 survey). In rural areas, women play an active role in production (58.3 percent). Their activities in rural and urban areas contribute directly to food security. Women are particularly involved in social and family life (basic education, health, child assistance, etc.). This position, however, is not reflected in economic status or in the political status of women within Congolese society. Of course, major efforts have been made in basic education, where Congo has to all intents and purposes achieved parity, although discrepancies do remain: (i) in economic affairs: access to land and financial resources; and (ii) in political affairs: insufficient representation in government, constitutional institutions, among elected officials, in decision-making circles in both the public and private sectors, etc.

534. Society and the Congolese government are increasingly aware of these gaps, which, if they remain, stand to limit Congo’s capacity to promote inclusive development commensurate with its human potential and true shared prosperity. For this reason, the government decided to place further emphasis on women, children, and the family in its development program.

Congo Addressing the Challenge of the Millennium Development Goals

535. During the period 2008-2010, Congo registered sound average annual growth levels of 7.4 percent. This average level is truly important, in comparison with the data from other petroleum producing and exporting countries in the Sub-Saharan African subregion, not including Nigeria, in positively influencing developments in household living conditions in Congo and therefore in achieving the Millennium Development Goals (MDG).

536. MDG 1: Eradicate extreme poverty and hunger. According to the results of the ECOM 1 survey (2005) and the World Health Organization Statistical Report (CNSEE, 2010), the proportion of the poor population declined by six points (from 50.7 percent to 44.0 percent) between 2005 and 2009, equivalent to an average decline of 1.7 points per annum. At this rate, the goal of 35 percent by 2015 is achievable. Where food poverty is concerned, the data indicate that the proportion of children under five years of age suffering from hunger (insufficient weight) at the national level declined from 14.4 percent in 2005 to 10.64 percent in 2009, equivalent to an average progress rate of approximately one point per annum. At this rate, the goal of 7.8 percent is achievable. With intensified efforts and more efficient program implementation, the outlook for reaching the goals for extreme poverty and hunger is encouraging.

537. MDG 2: Achieve universal primary education. According to the ECOM 1 and 2 surveys, the net primary school enrollment rate increased from 86.8 percent in 2005 to 89.3 percent in 2011, equivalent to an average annual progress rate of 0.5 points. This rate is insufficient to reach the universal school enrollment goal (100 percent) by 2015. The adult literacy rate (for persons 15-24 years of age) has improved substantially from 80.4 percent in 2005 to 83 percent in 2011, equivalent to an average annual progress rate of 0.4 points. This rate is insufficient to reach the goal by 2015. The government is determined to intensify the efforts and efficacy of program implementation to restore Congo to the path to achieving the objective of universal school enrollment and eradicating illiteracy.

538. MDG 3: Promote gender equality and empower women. Trends in the indicators in respect of the adopted goals show that the situation of women has improved, particularly in primary education, where the ratio of girls to boys increased from 0.93 in 2005 to 0.97 in 2011, equivalent to an average annual gain of 0.04 points. At this rate, the goal of 1 is achievable by 2015. Where economic activity is concerned, there are no reliable statistics available describing the labor force participation rate (employees) for women in the non-agricultural sector. In terms of political representation for women, the presence of women in the government and republican institutions is still insufficient. Women now represent only 8.6 percent of parliament.

539. MDG 4: Reduce child mortality. The child mortality rate in the Republic of Congo increased from 117 deaths per 1,000 live births in 2005 to 118 deaths per 1,000 live births in 2009. This rate is to all intents and purposes constant, and at this rate, the target of 55 deaths per 1,000 live births by 2015 cannot be achieved. Similarly, the neo-natal mortality rate in the Republic of Congo increased from 75 deaths per 1,000 live births in 2005 to 76 deaths per 1,000 live births in 2009. This increase is sufficient indication that the goal of 33 deaths per 1,000 live births will not be reached by 2015. In this connection, the government intends to take action to improve accessibility of health services and the quality of health care for children.

540. MDG 5: Improve maternal health. Between 2005 and 2008, maternal mortality decreased from 781 deaths per 100,000 live births to 740 deaths per 100,000 live births, equivalent to an average reduction of 14 points per annum. At this rate, the target of 390 deaths per 100,000 live births will be difficult to achieve by 2015. In addition to the steps taken, particularly the provision of free Caesarian procedures, the government intends to intensify its activities to improve maternal mortality rates to reverse the trend. However, it is quite possible to reach levels close to the target of 100 percent by 2015 for this indicator. The mortality rate indicators contrast with those for births assisted by qualified personnel (86 percent in 2005 and 91.6 percent in 2009) characterized by a gain of 1.4 points per annum. At this rate, the goal of 100 percent is achievable.

541. MDG 6. Combat HIV/AIDS, malaria, and other diseases. The survey on seroprevalence and AIDS indicators in 2009 revealed that the prevalence of HIV/AIDS is 3.2 percent at the national level, as against 4.2 percent in 2003, equivalent to an average decline of 0.17 points per annum. At this rate, the established goal of 2 percent by 2015 is not achievable. We also note that women (4.1 percent) are more vulnerable to HIV/AIDS than men (2.1 percent) in the 15-49 year age bracket. The incidence is also higher in urban areas than in rural areas, respectively with 3.3 percent as against 2.8 percent. Higher prevalence rates have been detected in the second poorest quintile (3.7 percent) and in the fifth richest quintile (3.5 percent). While substantial efforts have been made concerning HIV/AIDS, achievement of the MDGs by 2015 will be adversely affected by the lack of indicators describing coverage of persons living with HIV and malaria.

542. MDG 7: Ensure environmental sustainability. The government is implementing an active policy for the environment. Areas protected to conserve the environment represent more than one tenth of the national area (11 percent in 2010). The target of 70 percent of forest areas by 2015 is potentially achievable in light of the percentage of forest areas, i.e., 65 percent in 2008, as against 65.1 percent in 1990 and 64.6 percent in 2002. The proportion of the population using an improved source of drinking water is rising daily. However, there is still much scope for further efforts as the proportion of the population having access to drinking water, although clearly on the rise, harbors local disparities indicating a bias against rural areas. Negative trends have been observed in the proportion of the population using improved sanitary facilities.

543. MDG 8: Develop a global partnership for development. The plan to achieve the MDGs shows that tremendous financial resources are required to reach the MDGs. Domestic financing will be insufficient, and support in the form of external aid will be required. Substantially more budget appropriations will be required for the social sectors. The partnership to be implemented aims to:

  • – control and reduce the unemployment rate among young persons, particularly in urban centers,

  • – align revenue with the cost of living

  • – to provide the least favored sectors with the essential medicines they require

  • – to reduce inequalities between men and women by promoting strategies for economic empowerment of women,

  • – to expand the use of information and communication technologies, and to improve living conditions.

Chapter 5: Basic Infrastructures

544. Access to high-quality infrastructure services is more than an indicator of economic development and well-being—it is also a key factor in economic modernization. It is both a goal in itself and a means to achieve shared prosperity and growth.

545. In fact, road, energy, water, and telecommunication infrastructures, and road access in general are key factors that support an improved quality of life. Such services are also essential inputs in production, i.e., cost components of transactions, production, and distribution that determine the competitiveness of the economic area. They also enable transactors to interconnect with domestic, regional, and international markets, and pockets of poverty to be opened up to the outside world. Accordingly, these are important factors in helping to bring about shared growth and poverty reduction.

Transportation Infrastructures And Public Works

546. Economic transformation to promote industries or services requires even further infrastructure services, as competitiveness in industry is even more sensitive to transaction costs than in the primary sector, and therefore to the quality and cost of infrastructure services. For this reason, the government has made the strengthening of infrastructures one of the pillars of its priority investment program.

Roads And Road Transportation

547. The Congolese road system comprises 20,925 kilometers of roads, most of which are in substantially poor repair, while less than 10 percent (1,976 kilometers) are asphalted, including urban roadways. Since the 2000s, the Congolese government has stepped up its programs to asphalt the roads and to rehabilitate the road system. These efforts have been intensified during the past three years, with encouraging results. Many asphalting programs are also now in progress (approximately 1,500 km).

548. Despite the efforts that have been made, substantial challenges remain to be met in the modernization of the overall road system, owing to the: (i) scope of deterioration; (ii) shortage of road maintenance; (iii) absence of structured road transportation companies; (iv) inadequacy of technical vehicle inspection organizations; and (v) insufficiency of road administration capacities.

549. Roads. To recover its delay in the development of its road system, the government has intensified its programs to asphalt roads and to rehabilitate the system, since the 2000s. The development and asphalting program for the road system has already made it possible to (i) asphalt more than 100 kilometers, including road sections between Bouansa and Mouyondzi and Inoni Plateau-Imboulou Dam; (ii) to build more than 150 linear meters of bridges (bridge over the Vouma River at Abeya on National Route 2 (Obouya-Owando); bridge over the Loémé River on the Pointe-Noire-Nzassi route; and (iii) development of roadways for several cities: Brazzaville, Makoua, Ewo, Owando, and Ouesso. The rehabilitation program involves asphalted and unpaved roads covering more than 1,000 kilometers, nearly 400 of which have been completed on the routes of Owando-Manga; Botanga-Niangué-Malala; Mapati-Zanaga; Dolisie-Londéla-Kayes; and Dongou-Boucy-Boucy.

550. Many projects are still in progress. In the asphalting program, nearly 1,500 kilometers are under construction on the following major routes: Obouya-Boundji-Okoyo-Border with Gabon; Owando-Makoua-Ouesso-Border with Cameroun; Pointe-Noire-Brazzaville; Makoua-Etoumbi; Sibiti-Mapati-Ibé (Zanaga); Boundji-Ewo; Oyo-Tchikapika-Tongo; and Bouansa-Mouyondzi. The same is true for the rehabilitation program in which the works are continuing primarily on the following sections: Ewo-Okoyo; Ewo-Palabaka; Etoumbi-Mbomo; Etoumbi-Kellé; Owando-Ngoko-Kenvouomo; Talas-Mbomo; Poueret-Mbomo-Katsoko-Isseyi-Okona; Issabi-Aboundji-Engwala; and Ingoumina-Kebarra.

551. Ultrasonic testing operations have been launched on the bridge over the Kouilou River with a view to its rehabilitation, along with feasibility studies for the construction of the road-rail bridge over the Congo River between Brazzaville and Kinshasa. Last, work in progress under the road system development program focuses on the cities of Brazzaville, Pointe-Noire, Dolisie, Impfondo, Mossendjo, Nkayi, Owando, Oyo, and Ouesso.

552. While the foregoing progress is important in many ways, the government should intensify its efforts to make up for Congo’s delays by strengthening the country’s transportation infrastructures, and roads in particular, to reflect the country’s modernization and industrialization requirements. For roads, this effort entails (i) continuing and completing the projects in progress, while bearing in mind that maintaining and protecting the country’s existing road facilities is of paramount importance.

553. In addition to the investments made in developing the road system, a number of road transportation facilitation infrastructures have been established, specifically signing and rehabilitation works to upgrade the bus stations.

554. By contrast, despite these efforts, much remains to be done in the area of road transportation regulation. Specifically, substantial upgrading efforts are required to keep Congo abreast of the new challenges involving climate change, road safety, and enhanced security for road transportation documentation in connection with the subregional integration process.

Other Means Of Transportation: Rail, Air, River, And Maritime

Rail transportation

555. The government has made a substantial effort to strengthen the rail transportation infrastructures. Specifically, the rehabilitation and equipment program for the Congolese railway company, Chemin de Fer Congo Océan (CFCO), launched in 2007, continues to produce tangible results. However, irregular traffic patterns and network service levels make it impossible to ensure optimal operating conditions. The reasons for these failures are related to the following, inter alia: (i) ageing equipment and staff of the CFCO; and (ii) insufficient transportation and hauling equipment.

556. Substantial effort have been made in the area of infrastructures. The CFCO rehabilitation and equipment program launched in 2007 has already produced visible results: the rehabilitation of seven CC500 locomotives; rehabilitation of six BB700 locomotives; the purchase of four new locomotives; treatment of 27 specific points on the overall rail system, and construction of a bypass to avoid flood zones in the Kiélé area. However, the level of service on the network still does not provide passenger transportation under optimal safety or comfort. The average speed of passenger trains is now estimated at 34 kilometers per hour as a result of the constant risk of derailments. Making the railroad system safe for passengers will continue to be an important challenge for the government in the forthcoming years.

Air transportation

557. Congo has made a significant step forward in modernizing the Brazzaville and Pointe-Noire international airports as a result of substantial rehabilitation and expansion investments. Through this support, the country’s two main cities have been equipped with airport infrastructures, making them into regional hubs. The strengthening of airport infrastructures has also been accompanied with major operational changes with the issue of concessions for the Brazzaville, Pointe-Noire, and Ollombo airports. The challenge will now be to maintain these new facilities (infrastructures and equipment) and to optimize their profitability, so that they can serve as true transit platforms for all countries in the subregion.

558. Despite this progress, there are still major challenges to be met to optimize the installed capacities. Although the attendance rate for these airports is still low during this initial period, in light of maintenance costs, the development dynamics that will be launched with the creation of Special Economic Zones, industrial areas, and tourism in the vicinity should offset the initial costs of construction and maintenance.

River transportation

559. The government has made efforts to enhance navigability of the Congolese waterways. However, these efforts have not been followed up with traffic organization efforts, particularly at the Brazzaville port, where passenger arrival formalities are still lengthy (45 minutes, as opposed to the average of 10 minutes according to international standards). Moreover, navigability problems in certain Congo River tributaries have meant that timber transport has been detoured from northern Congo to Douala, Cameroon. Despite the marking (1,050 kilometers in 2009 and 1,200 kilometers in 2010) and dredging works (210,000 cubic meters in 2009 and 233,000 cubic meters in 2010), insufficient investments to purchase handling equipment and develop docks and warehouses, and insufficient traffic organization are the main constraints in the subsector.

560. The government, however, will intensify its efforts to maintain the riverways and to rehabilitate the river ports. Development of river transportation will also facilitate the flow of wood felled in Northern Congo and will help improve the flow of inland fishing products. In addition to strengthened infrastructures, the government intends to focus more on facilitating trade traffic flows transported by river.

Maritime transportation

561. The Pointe-Noire deepwater port has undergone substantial capacity expansion under the Pointe-Noire Port Authority (PAPN) rehabilitation program. Under this program, three storage warehouses have already been renovated. The major renovation works in progress (access, networks, etc.) will further strengthen this port’s functionality and competitiveness and make it into a regional hub.

562. In the sections below, this performance will be examined for each subsector. Special attention will be given to issues of access for the public and service operators. The implications on transaction costs and the competitiveness of the economic area will also be analyzed. Last, the analysis will examine how Congo has used regional cooperation in this area to benefit from the substantial regional opportunities offered by its position as a corridor and border between west/central and east Africa. Infrastructure development strategies are reviewed in Chapter 11, Section Three of this paper.

Table 16.Comparative Indicators For Selected Countries – Infrastructure (2009)
IndicatorUnitBotswanaCameroonCongoMalaysiaMoroccoTunisia
I. Transportation and public works
Km/100
1. Road surface densitysquare kmND11.16.14ND1312
2. Proportion of asphalt roadsPercentND109.4ND67.875.2
3. Volume of goods transported by railThousands of tons7591,0015938311,9481,041
4. Number of passengers transported by railThousands of persons1063865929171,986750
5. Number of passengers transported by planeThousands of persons23446614023,7664,9312,279
II. Energy, water, and sanitation
6. Rate of access to electricity in urban areasPercentND90.445NDNDND
7. Rate of access to electricity in rural areasPercentND23.15.6NDNDND
8. Electricity producedGWh6315,55146197,39220,82415,311
9. Rate of energy loss during transportation and distributionPercent529.776.82.71112.4
10. Rate of access to drinking water in urban areasPercentND86.840NDNDND
III. Housing and urban development
11. Urbanization ratePercent60.3457.5861.7271.2856.3666.9
IV. Telecommunications and information and communication technologies
12. Number of telephone lines per population of 100Unit7.281.690.6215.4311.1212.25
13. Proportion of households having a mobile telephonePercent94.638.655.1108.78093.4
14. Number of fixed Internet subscribersUnit15,0009001,5001,671,800475,767372,818
15. Number of fixed Internet subscribers per population of 100Percent75.700.473.81598.15150.39357.12
16. Proportion of the population using the InternetPercent6.13.96.256.632.633.5
17. Number of Internet servers per population of one millionUnit3.530.520.5133.021.9612.45
Source: STP/DSCERP, World Bank Data, World Development Indicators, 2010.
Source: STP/DSCERP, World Bank Data, World Development Indicators, 2010.

Energy, Water, And Sanitation

563. During 2010, the government adopted a strategy and policy paper for the electricity, drinking water, and sanitation sectors. This paper was broken down into two specific programs for each subsector: The National Electricity Program (PNEE) for the electricity subsector and the National Sanitation Program (PNEA) for the water and sanitation subsector.

Energy

564. Congo has substantial hydroelectric potential (approximately 14,000 MW as surveyed). This potential, however, is still insufficiently exploited (just under 194 MW) and the country registers a shortage of electricity service. In recent years, the government has devoted substantial resources to absorb the energy production deficit by implementing a number of programs to build capacities for production, transportation, and distribution of electricity. These activities include construction of the gas-fired plants at Ndjeno (50 MW) and Côte Matève (300 MW), rehabilitation of transportation lines and related substations, rehabilitation of the electricity distribution networks for Brazzaville and Pointe-Noire, and of the Imboulou hydroelectric plant (120 MW), and using this plant as a base to intensify rural electrification. Commissioning of the Imboulou plant strengthened Brazzaville’s energy capacities and made it possible to connect Ngo, Djambala, Gamboma, Ollombo, Oyo, Boundji, and Owando to the national electricity network.

Accelerated municipalization works have also enabled certain departments (Likouala, Cuvette, and Cuvette Ouest) to establish electricity production and distribution facilities. Despite the efforts that have been made, the subsector still faces the following major challenges:

- To continue the rehabilitation of the Brazzaville and Pointe-Noire distribution systems;

- To continue construction of the energy boulevard intended to connect the northern and southern Congo and neighboring countries;

- To connect all cities located near the boulevard to the national system;

- To build new dams (Sounda, Kouembali, Chollet, Liouesso, etc.) to meet potentially increasing demand;

- To improve the electricity coverage rate in rural areas with appropriate energy (solar, wind, and pico- et micro-hydroelectric plants);

- To optimize management of services in the subsector through management and commercial decisions appropriate for the context.

Water

565. Despite the country’s abundant water resources, the population still registers serious difficulties in accessing drinking water. These access problems are the result of substantial shortages in the physical and institutional capacities of the sector, including (i) equipment that is obsolete and in poor repair (ii) insufficient rural water points; (iii) insufficient water quality control mechanisms; and (iv) insufficient governance in the sector.

566. Most of the population obtains its supplies from artisanal wells (3.3 percent), rainwater (2.3 percent), and undeveloped springs and waterways (17.1 percent). In recent years, substantial public investments have been made in water production and storage in urban areas. However, the national water company (SNDE) network is limited in scope and obsolete, and registers substantial technical losses (30.0 percent). Rehabilitation and expansion of the network represent major challenges to improve the access rate to drinking water in urban areas. By contrast, in rural areas, efforts are under consideration to equip the municipalities with drinking water supply systems and villages with developed sources, boreholes, and wells.

567. The government intends to earmark substantial budget revenue for investments to increase the number of persons having access to drinking water. For the past three years, the budgets have respectively amounted to CFAF 27,144 billion in 2009; CFAF 25,430 billion in 2010, and CFAF 31,034 billion in 2011. As a result of these resources, a number of projects, including the following, have been carried out: (i) in Brazzaville: rehabilitation of the Djoué water treatment plant; purchase and installation of compact drinking water production units; drinking water connections for outlying areas of Brazzaville; rehabilitation and expansion of the drinking water distribution network; (ii) in Pointe-Noire: purchase and installation of compact drinking water production units; construction of a new drinking water supply system (SAEP); rehabilitation and expansion of the drinking water distribution network; (iii) in the secondary cities and departments: rehabilitation of water production and storage infrastructures in the department seats; construction of SAEPs; (iv) in rural areas: construction of boreholes in several village localities.

568. Further, accelerated municipalization works have enabled certain departments (Kouilou, Niari, Likouala, Cuvette, and Cuvette Ouest) to establish water production and distribution facilities. Reforms undertaken at the institutional level have led to the establishment of the Water Sector Regulatory Agency (ORSE) and the National Rural Hydraulics Agency (ANHYR).

However, insufficient quality control for the water provided to the public persists owing to a shortage of adequate organizational, technological, and infrastructure resources. It is therefore still a major challenge to improve governance in the subsector.

Hygiene And Sanitation

569. In urban areas, ECOM 2 revealed that the coverage rate with adequate individual sanitation facilities (flush toilets and improved ventilated latrines) is still insufficient. Accordingly, implementation of improved waste collection and treatment infrastructures is still a major challenge in improving public living conditions.

570. Congo’s leading cities do not have updated master plans to reflect the challenges in the subsector, including waste collection and treatment systems, controlled public waste disposal systems, a system of drains and sewers, purification stations, etc. Owing to deterioration in health and sanitation conditions, the competent local authorities must take steps specifically to manage household waste. Household waste disposal in fact is a substantial problem for households and the local public authorities. There is a shortage of appropriate solid and liquid waste treatment facilities. The percentage of public sanitation tanks has declined from 6.1 percent to 1.9 percent. Similarly, the percentage of households discharging waste in public or nature areas has increased six points (from 53.7 percent of households in 2005 to 60.0 percent in 2011). Usage of sanitary facilities therefore remains insufficient. Although the number of flush toilets and improved toilets has increased, many households still do not use convenience facilities (7.8 percent in 2005 as compared with 9.0 percent in 2011); while only one out of two households (52.4 percent) has adequate sanitary facilities, with a predominance of covered latrines (43.8 percent).

571. Only 10.6 percent of households use an appropriate wastewater removal system (sewer and drainage systems). A substantial percentage of households dispose of wastewater in natural areas, courtyards, or in the street (54.4 percent in 2005 as against 83.2 percent in 2011). This is indicative of the problems affecting public health and sanitation in urban agglomerations, which call for an urgent effort to rehabilitate the public hygiene and sanitation systems.

As a result, the rehabilitation, construction, or implementation of sustainable infrastructures for wastewater removal and improved collection and treatment of liquid, solid, and gaseous wastes are major challenges to improve public living conditions.

Housing And Urban Development

572. In Congo, housing is comprised predominantly of single-family homes. The surveys indicate that 57.7 percent of all households own and live in single-family homes. This situation has changed little since 2005, when two thirds of households (64.4 percent) owned single-family houses. Such a substantial home ownership rate would imply a significant improvement in living conditions. Unfortunately, this indicator is subject to ambiguous interpretations. For example, although the average standard of living in rural areas is clearly lower than in urban areas, we observe that most rural households live in single-family homes (83.4 percent) while in the cities there is a greater tendency (49.2%) towards houses comprising several apartments. This situation is attributable to the relatively high cost of land and construction in the cities. In general, in both urban and rural areas, many properties can be considered slums owing to their informal construction, as opposed to villas which reflect a privileged standard of living.

Housing

573. Under the program for urban renewal and densification of the old neighborhoods in the major cities, a number of property projects have been launched, both by the government and the private sector. Such programs primarily involve (i) in Brazzaville: Jardins de Bacongo, Cité du Clairon, le Camp 15 août, Mpila, and Kintélé; (ii) in Pointe-Noire: Songolo Close; (iii) in Oyo: Alima Close; and (iv) in Kindamba. These projects have made it possible to produce just under 400 dwellings in 2009 and 2010. The supply of housing however, is still largely below expressed demand. The government’s challenge for the next few years is to ensure that the program now under way to build low-cost housing continues and is accelerated.

The Banque Congolaise de l’Habitat was established to accompany property developers and households in purchasing homes, although the results still fall far short of the requirements expressed by the public. The government’s challenge for the next few years will be to accelerate implementation of the program to build low-cost housing and to provide adequate mechanisms to finance home purchases, primarily targeting low-income sectors.

Urban Development

574. In 2009, the government undertook a vast property reform, one major component of which is to contribute to the servicing of urban areas by establishing subdivisions before any construction begins, and the reorganization of spontaneous neighborhoods. The accelerated munipalization program implemented a number of years ago is also helping to improve urban living conditions. Obstacles, however, persist as a result of property problems and insufficient technical and institutional tools for urban management.

575. Moreover, some Congolese cities lack an updated master plan for urban development (Brazzaville, Pointe-Noire, Dolisie, Nkayi, Ouesso, and Mossendjo); while others have none at all, which is true for most recently-created urban communities.

Post, Telecommunications, And Information And Communication Technologies

576. To resume their traditional activities, the Congolese postal and savings company, Société des Postes et de l’Epargne du Congo—SOPECO undertook a rehabilitation and modernization of post offices. In the area of post and telecommunications, the government has provided the subsector with a regulatory agency (ARPCE). It has made investments in heavy infrastructures just as the mobile telephone operators. These efforts have led to increased capacities, with a national coverage rate of 90 percent (100 percent in urban areas and 72 percent in rural areas). Subscriptions have increased dramatically and communication charges are now among the lowest in Sub-Saharan Africa. In contrast to mobile telephony, access to information and communication technologies is still limited to a small proportion of the population owing to the excessive cost of the relevant supplies and services.

Postal Service

577. To resume their traditional postal activities that were interrupted as a result of the sociopolitical crisis, the state undertook an effort to rehabilitate and modernize the post offices. Today, more than 45 post offices have reopened, and the two postal checking centers (in Brazzaville and Pointe Noire) were partially rehabilitated and computerized. It is still a major challenge to pursue this program to modernize the postal service in Congo.

Telecommunications And Information And Communication Technologies

578. In connection with the national coverage program, the government has made substantial investments in heavy infrastructures, along with the mobile telephone operators. The number of allocated fixed lines increased from 6,200 in 1997 to 15,000 in 2010, equivalent to an average annual rate of nearly 11 percent. This figure, however, is a far cry from achieving the pre-war level of 23,000 fixed lines. Mobile telephone subscriptions have also increased dramatically as a result of the competition now existing between four companies present in this market segment. As a result, mobile telephone communication costs in Congo are among the lowest in Sub-Saharan Africa. It will be an ongoing challenge to maintain this competitive advantage over other countries in the subregion, to be more attractive to new investors who register substantial requirements for communication equipment.

579. Unlike telephony, access to information and communication technologies is still limited to a small proportion of the population owing to the excessive cost of the relevant supplies and services. However, all other indicators describing the sector are on the rise: for example, during 2009 and 2010, the number of households having a computer was estimated to have increased to 43 percent; the number of Internet users per population of 100 increased to 40 percent, and the number of jobs created in the information and communication technology sector increased to 43 percent.

580. The audiovisual sector has experienced enormous problems reflected by insufficient levels of national coverage. This business sector is characterized by: (i) obsolete production and distribution equipment; (ii) insufficiently qualified technical staff; and (iii) no statistical database. The sector still has few operators and insufficient press enterprises.

Table 17.Status of Infrastructures in Congo: 2010
IndicatorsUnitStatus in 2010
Transportation and public works
Road surface densitykilometers/square kilometers0.06
Proportion of asphalt roadsPercent9.4
Proportion of road system in good conditionPercent32
Average passenger train speedKilometer/hour34
Volume of goods transported by trainThousands of tons770.70
Number of international airportsUnits3
Proportion of riverways markedPercent16.5
PAPN ship usage ratePercent35
2. Energy, water, and sanitation
Rate of access to electricity in urban areasPercent45.0
Rate of access to electricity in rural areasPercent5.6
Installed electricityMW171
Rate of access to drinking water in urban areasPercent40.0
Rate of access to sanitary facilitiesPercent14.0
3. Housing and urban development
Stock of low-cost housingUnits2,107
Urbanization ratePercent61.7
4. Telecommunications and information and communication technologies
Fixed telephone penetration rate%0.125
Mobile telephone penetration rate%60.00
Internet coverage rate%2.07
Number of public communication portalsUnit12
Source: STP/DSCERP, World Bank Data, World Development Indicators, 2010).
Source: STP/DSCERP, World Bank Data, World Development Indicators, 2010).

581. These data clearly show that, despite Congo’s considerable advantages, to become an emerging country, Congo still has a substantial infrastructure gap to fill, which is preventing it from reaching the same level as other currently emerging countries (Malaysia, Morocco, and Tunisia). The gap is more pronounced in the transportation and energy sectors, in which Congo cannot sustain any comparison with non-emerging countries such as Botswana or Cameroon. As more than three fourths of the electricity produced is lost (as against less than 10 percent in Cameroon) it is clear that by simply increasing efficiency in electricity transportation and distribution, the country could cover most of its current energy deficit without any additional production efforts. A massive, sustained investment effort in transportation infrastructures is therefore required in order to supply electricity, which will directly and immediately impact enterprise production and competitiveness as well as performance in the education and health sectors, and therefore the country’s economic and social development.

Part Two: Where Does Congo Want To Be In 2016 And What Can Be Done To That End?

Chapter 6. Long-Term Vision And Medium-Term Strategies

582. To accelerate the country’s economic, social, cultural, and political transformation process, the President of the Republic has defined a medium and long-term vision to set the stage for emergence. This vision prepared by the president is based on his plan for society known as the Future Path. This is an ambitious modernization and industrialization program for Congo. This chapter presents this vision and its major programs. It explains how the economic growth and poverty reduction strategy paper (DSCERP) and its components are designed and organized for the implementation of this vision in the context of strategic planning for the next five years.

Medium And Long-Term Vision Of Congo In Connection With The Future Path

Major Objectives Of The Future Path

583. After having achieved peace in Congo, laid the groundwork for a state under the rule of law and the foundations for a dynamic economy, the government has set new goals for the President’s seven-year term: accelerated modernization and industrialization of Congo. This ambition is part of the vision of the country’s emergence at the horizon 2025. Emergence must be reflected by integrated, wealth-generating sustainable economic and social development in sum, by a robust and competitive economy built by the Congolese for the Congolese.

584. To that end, Congo must gradually reduce its petroleum dependence while benefiting prudently from petroleum resources to accelerate the diversification of its productive base. With this approach, the industrial sector in general, and the manufacturing sector in particular, should play a predominant role in Congo’s GDP and export formation. The emergence process should enable quality improvements and further integration into the world economy with high value added products. In this will it will help generate a sustained increase in per-capita income and eradicate extreme poverty.

Box 6.Megaprograms Under the Future Path

The Future Path

The strategic plan for the Congo in its emergence process aims to industrialize the Congolese economy and modernize society to promote shared ownership. This vision is broken down into three “Megaprograms:” Growth, Competitiveness, and Empowerment/Inclusion.

[Tr.: Please see page 157 of the source text for graphics.]

Emerging CongoShared Prosperity
IndustrializeGROWTH
Agriculture and ForestryPetroleum, Gas, and MiningConstruction and TourismIndustrialization will be based on the key clusters of the sector
Competitiveness Infrastructures
Human ResourcesBusiness EnvironmentAccess to markets and support for the private sector
Capacity-building and Inclusion
EducationHealthSocial AffairsVulnerable Groups
Congo – National Development Plan – 2012-2016
PillarsNo.Strategic Objectives
1. Modernize the country1.Promote values favorable to development
2.Modernize national education
3.Modernize general government
4.Modernize justice
5.Modernize the armed forces and police
6.Modernize national political affairs
7.Modernize other fundamental issues in society
8.Modernize public economic governance
9.Modernize basic infrastructures
10.Modernize the diplomatic system and promote diplomacy in support of development
PillarsNo.Strategic Objectives
2. Industrialize the country11.Help consolidate, diversify, and increase capacities of existing industries
12.Industrialize the country through agriculture
13.Industrialize the country through local processing of natural resources
14.Industrialize the country through local processing of manufactured goods
15.Industrialize the country through organization of the supply of local tourism
16.Industrialize the country through services
17.Create industrial economic areas specializing in exports
18.Create conditions for the emergence of heavy industry
Source: STP/DSCERP in “Future Path.”
Source: STP/DSCERP in “Future Path.”

Framework Programs Under The Future Path

Modernize the country

585. Modernizing the country is tantamount to promoting values conducive to development, to loosening the vice of crippling societal, structural, institutional, social, economic, and physical constraints—contingencies that block access to development.

586. The vision of the Future Path is broken down into framework programs for the modernization of the country. This program includes a set of key actions targeting key sectors of Congolese economy and society. As indicated in the foregoing box, modernization involves the major areas of governance, and in particular:

  • Public administration, through the computerization of tasks and strengthening of human resources, and the strengthening of governance and transparency in public affairs management;

  • National education, through improvement of facilities and the quality of education services, as well as through increased capacities of the education structures, including institutions devoted to applied research and promotion of technological expertise;

  • Justice and the armed forces and police, so that they are better equipped with material and human resources: development of a democratic and republican culture to guarantee individual and collective liberties and to protect the public’s rights, including ownership;

  • National political affairs, through continued implementation of activities to consolidate peace, adoption of democratic processes, effective enforcement of the law governing the political parties, organization of the opposition, and more peaceful relations between the latter and the majority;

  • Social fundamentals, through the formulation and implementation of policies on employment, consolidation of the supply of health care, and restructuring of the social security system;

  • Economic governance, through improved infrastructures, a better business framework for existing enterprises, creation for incentives for the establishment of new enterprises, and creation of public enterprises for clearly targeted activities incumbent on the state.

Industrialize the country

587. Industrializing the country is tantamount to organizing national production of goods and services on a large scale, with an integrated approach for the processing of primary products to increase national value added. This approach entails creating new production and marketing activities to ensure robust, diversified growth.

588. Just as in the case of modernization, the Future Path comprises an industrialization framework program based on the following:

  • Consolidation, diversification, and increased capacities of existing industries through a strategy to build capacities and competitiveness;

  • Industrialization of agriculture through the reorganization and advanced integration of agricultural and agro-industrial subsectors. This effort involves establishing and developing synergies between agriculture, processing industries, and applied research;

  • Local processing of natural resources, including reorganization of the petroleum, mining, and forestry sectors;

  • Emergence of a manufacturing industry through the exploitation of the country’s potential to meet the increasing requirements of the regional and international markets;

  • Promotion of service industries, and specifically the tourism industry and transit services, in light of the country’s advantages in these areas, so that they can contribute more effectively to national revenue; as well as the development of sources of foreign exchange in non-mining industries to build export capacities and support investment and development;

  • Establishment of industrial economic areas specializing in exports and in growth sectors.

589. Industrialization programs in turn will be reflected in operational subprograms under a Congo Industrialization Policy Letter (LPIC), which defines substrategies of industrialization policy, provides the main guidelines for national industrial redeployment, and describes the framework for implementing this policy.

The Economic Growth and Poverty Reduction Strategy Paper (DSCERP) as an Integrated Framework For Implementation of the Future Path

590. The aim is to reflect the various dimensions of the foregoing vision and megaprograms in an overall set of strategic objectives for the medium term (2012-2016), and in programs based on key projects and activities to be carried out during this period.

Strategic Pillars and Objectives of the Economic Growth and Poverty Reduction Strategy Paper

Objectives of the DSCERP

591. The main objective of the DSCERP is to increase and support growth, in order to create jobs and reduce monetary poverty with a view to reaching the Millennium Development Goals and fulfilling the expectations of the Congolese people. Increasing and supporting growth clearly requires diversification and enhanced transformation of the Congolese economy. The target sectors include hydrocarbons; mining; the agroindustrial sector; and the construction and services sectors, including exported services, and particularly tourism. Experience has shown that, for emerging countries or those that have been successful in eradicating extreme poverty, in Congo’s current situation, the country will require a sustained average overall growth rate of 7 to 8 percent during the period 2012-2016 (the figure for the non-petroleum sector is approximately 9-10 percent) to meet the challenge of the MDGs and that of poverty reduction

592. The second set of objectives involves the “sharing of prosperity.” The aim is to develop the social sector to improve living conditions for households, and to more effectively empower them, or prepare them to participate in production and consumption activities. Combined with income growth, the strengthening of essential services is an important factor in public well-being. The secondary objectives include enhanced performance in education, and specifically universal primary and secondary education; health, including mother and child health; eradication of HIV/AIDS; and strengthening of social security.

593. Achievement of the MDGs by 2015 is an important benchmark for sustainable human development in Congo. These objectives have already been incorporated into the sectoral targets of the DSCERP, and specifically (i) reduction of hunger and extreme poverty (growth overall and in food production); (ii) universal primary education, reduction of infant and child mortality and of the incidence of HIV/AIDS (human resources and social development).

594. Finally, a series of strategic objectives relating to all aspects of governance entails: (i) strengthening the democratic process, consolidating peace and preventing conflicts; (ii) strengthening justice to protect and foster liberties, rights for the public and for transactors, and to fight corruption and impunity; (iii) developing a modern public security and defense force that respects individuals and republican and democratic values, and that protects the public’s liberties and property; (iv) improving management of public administration and the economy to enhance efficiency in public interventions.

Strategic pillars

595. These strategic objectives or pillars will in turn be addressed according to the breakdown of programs and subprograms that will serve as a basis for action plans for the ministries, institutions, and other stakeholders for the period 2012-2016. As explained in Chapter 1, the major strategic areas (pillars) include the following:

  • Governance: political, administrative, judiciary, security, and national defense, as well as economic and financial;

  • Economic diversification and growth;

  • Development of economic and social infrastructures;

  • Social development and inclusion;

  • Balanced, sustainable development.

These programs are described in Chapters 7-15. They are also discussed in connection with the macroeconomic framework and budget allocations under the medium-term expenditure framework in Chapter 15.

Chapter 7. Strengthen Governance

596. Governance from all of its standpoints—political, administrative, judiciary, economic and financial, security and national defense—constitutes the foundation for economic and social development. Accordingly, good governance requires transparent, responsible management of resources, and the establishment of clear decision-making procedures for the public authorities and local governments. It also aims to develop transparent political, administrative, and republican institutions and the effective exercise of power to strengthen democracy and to instill in the mind of each citizen the values of merit, diligence, and competition, as well as respect for rules and laws, the dignity of each individual, and solidarity with others.

597. From the judiciary standpoint, good governance aims to strengthen the rule of law and justice in management of society and the economy, and the prevention and fight against corruption and official lawlessness.

598. From the security and national defense standpoint, good governance aims to strengthen the republican approach of the defense and security forces. In fact, the new domestic and external sociopolitical context requires constant, diligent, and effective adaptation of the defense and security forces to new forms of crime and delinquency, upgraded professional standing, and ownership of responsibilities in connection with development.

599. Last, from the economic and financial standpoints of good governance, the aim is to strengthen management of government, the economy, and financial affairs, and to empower transactors to facilitate their full participation in economic and social development and to enjoy the benefits of growth.

Political Governance—Promote an Inclusive Democracy

600. The participatory democracy deficit has worsened the country’s issues of identity slippage and deepened the social gap. As Congo is a country in democratic transition, the effort will consist in reconciling the universal values of democracy with those of African solidarity. The government would like to engage in concerted public affairs management so that those who benefit do not gain all of the benefits, and so that those who lose do not lose everything.

601. With the understanding that inclusive, participatory democracy constitutes the foundation of satisfactory public governance, the government is committed to building a state under the rule of law, to protect the general interests, based on the following foundations: (i) participatory democracy, (ii) social cohesion, (iii) decentralization, (iv) regional and international cooperation, and (v) prevention of conflicts to promote the consolidation of peace.

Strengthen Participatory Democracy

602. The following objectives have been adopted to strengthen participatory democracy: (i) strengthen the constitutional institutions so that they fully assume their intended functions in the political system; (ii) consolidate the electoral system to further guarantee the integrity of results and the rules of equity and transparency; (iii) develop public participation by strengthening civil society organizations and the media; and (iv) improve Congo’s international image and standing in the area of democracy and good governance.

Strengthen the constitutional institutions

603. These objectives entail strengthening: (i) the political parties, the status of the opposition, and the quality of political competition; (ii) the parliamentary institutions, their representativeness, and their accountability to the people they represent.

604. Enhance democracy and strengthen the political parties. The government intends to pursue the financing efforts in progress to ensure the parties greater territorial access and promote their seasonal activities in the political area. For the political parties to fully execute their citizens’ function and contribute effectively to civic education, it is in fact important for them to form sustainable social organizations that provide appropriate solutions to the major challenges facing the national community, particularly the challenge of credible changeovers.

605. Government support for the political parties will more effectively reflect the mechanisms for approval and a performance-based subsidization system in the areas of political and citizens’ education. Such support will also require better representation for young people and women in the leadership authorities, as well as transparent trust management that requires financial reporting. The government also intends to strengthen the status of the parliamentary opposition.

606. Strengthen the parliamentary institutions. The government also intends to engage in strengthening the independence and autonomy of the parliamentary institutions. It will address capacity building for members of parliament so that they discharge the new responsibilities incumbent on them in assessing public policies, as well as budget supervision and oversight.

Consolidate the electoral system

607. The government will consolidate the electoral system by focusing on legislation reform with actions to build the credibility of the national electoral system. It is important to strengthen this process and the capacities of the players and institutions to promote a modern, competitive, and vibrant democracy in support of economic development and social peace.

608. This also means strengthening the financial autonomy of the political institutions with the appropriate budget mechanisms. In this connection, the reforms will extend to budget streamlining and electoral consultations with the aim of controlling costs while substantially improving the integrity, impartiality, and independence of the agency responsible for organizing the elections. Against this backdrop, special emphasis will be placed on updating the electoral roll and statistics. Similarly, the capacities of the Constitutional Court will be strengthened.

Develop citizens’ participation

609. The government is committed to preparing an operational program to promote the involvement of civil society in public affairs management. The aim is to promote greater demand for democracy among the citizens and democratic watchdog institutions such as the press and civil society organizations.

610. The following subprograms are aimed at strengthening participatory democracy: (i) building capacities and autonomy of the media and representative organizations of civil society; (ii) expansion of forums for dialog and consultation between nonstate players and the public authorities; (iii) participatory monitoring of the public authorities and intensification of the budget tracking mechanism at a time when Congo is undertaking vast works to build social services and infrastructures essential for the economic development and well-being of the public; (iv) advanced institutionalization of the participatory approach in DSCERP implementation with substantial involvement of target groups such as young people, women, grassroots communities, and unions.

Promote International and Regional Cooperation

611. Promote cooperation and the image of Congo. The government intends to take specific actions to promote regional integration. Beyond the Economic Community of Central African States (CEEAC) and Central African Economic and Monetary Community (CEMAC), Congo will undertake to expand its cooperation with other regional organizations to benefit from its position as a corridor between central, east, and southern Africa. To that end, it should undertake missions aiming to: (i) modernize and rationalize the diplomatic system and expand the diplomatic charter; (ii) contribute to the acceleration of the processes of subregional integration; (iii) undertake diplomacy in support of development; and (iv) strengthen cooperation and good neighbor relations.

612. With performance-based management, the diplomatic approach will reflect the: (i) opening of new diplomatic missions to emerging countries to give more substance to South-South cooperation; (ii) restructuring of diplomatic missions to attract foreign direct investment using a win-win approach; (iii) easing of legal and tax constraints to benefit the diaspora so that they will become actively involved in the country’s development; and (iv) improvement of coverage and assistance for Congolese nationals abroad.

613. In connection with the mobilization of resources for development, Congo’s technical and financial partners will be approached according to the five principles of the Paris declaration on public aid for development.

Promote Decentralization

614. Decentralization is the pillar of good governance at the local level. It brings the state and public services closer together and involves them more effectively in the management of such services. This enhanced public participation and accountability in the design and implementation of policies and programs affecting them is a key factor in accountability for governing authorities and for the efficacy of the services. Accordingly there is a need for grassroots management in support of development.

615. The subprograms in this area include: (i) promotion of integrated local development entailing development of local economic activities and the provision of essential services in social sectors and infrastructures; (ii) promotion of grassroots democracy to foster public involvement in governance at the local level, and for decisions that affect their living conditions.

Promote participatory local development

616. In this connection, the government intends to strengthen local governance by expanding the areas covered and building institutional capacities to provide essential services. The priority subprograms involve the following activities: (i) improving the institutional and regulatory framework for decentralization; (ii) strengthening management capacities in local governments by providing the territorial civil service with specialized, competent professionals and the infrastructures and equipment required to operate effectively; and (iii) promotion of community mechanisms such as parents’ associations in the schools, management committees for drinking water wells, mutual health associations, etc.

617. Moving towards a national program for local development. The government intends to incorporate these measures into a national program for local development with the support of the technical and financial partners. In this connection, pilot tests have already been conducted in Plateaux and Kouilou. Expansion of this program to the national scale will require measures to build capacities for local planning, execution, and monitoring to make the territories more attractive.

Develop grassroots democracy

618. The government’s objective is to make the local governments a school of democracy. To that end, appropriate measures must be devised to reflect the sociological and political developments in the country. This necessary progress will be embodied with the following: (i) definition of the rules governing local elected officials; (ii) regular renewal of the management and representation authorities for local units of government to avoid the establishment of “feudal” systems at the local level; (iii) neutrality of the devolved governments, the state, and the traditional authorities during local electoral consultations; (iv) strengthened involvement of civil society organizations in management of local units of government; (v) development of social communications at the local level.

619. To that end, it is essential for the local authorities, and particularly the mayors, to be elected directly by the people. In fact, to meet the requirements of a democracy of the people, by the people, and for the people, where elected officials are accountable to the public, the mayors should be directly elected by the public. These authorities should be responsible for management of resources for the implementation of programs and should be accountable to the public and to the central government for their performance. The process undertaken should be pursued with the conversion of urban communities into municipalities and through the establishment of the relevant municipal councils.

Strengthen Justice to Consolidate the State Subject to the Rule of Law and Fight Impunity

620. The Preamble to the Congolese Constitution of January 20, 2002 affirms that Congo is a state subject to the rule of law. Title 2 of the Constitution guarantees Congolese citizens fundamental liberties and rights enjoyed by people in almost all advanced and emerging countries. The institution of a judiciary power is part of the movement to affirm human dignity as, in a state subject to the rule of law, it is incumbent on the judiciary power to play its constitutional role as guardian of the citizens’ rights and liberties.

621. As corruption is the most serious of all vices in the area of governance, its prevention and repression are the first battlefield where the willingness of the public authorities to embark permanently on the path to good governance will be judged. Mindful of these ethical requirements, the government undertakes to consolidate the rule of law by: (i) accelerating the process of modernizing justice; (ii) providing greater protection and promotion of human rights; and (iii) intensifying the fight against corruption and impunity.

Accelerate The Process of Modernizing Justice

622. In a state under the rule of law, the function of justice is to regulate social relations to guarantee social peace. For the modernization of justice, the government has adopted important guidelines consisting in: (i) increasing the efficacy of justice; (ii) making the law and justice more accessible; (iii) strengthening the credibility of justice; (iv) making incarceration conditions more humane; and (v) strengthening the participation of nonstate players in development of the justice sector. In pursuit of these objectives, the government intends to take action at several levels.

623. Legal and organizational framework. In this connection, the government intends to ensure that the new organic framework for the Ministry of Justice and Human rights is fully operational. It undertakes to continue the juridical and judiciary reform launched with the implementation of the national commission for the revision of codes. The commission was also assigned the task of ensuring that the new national juridical and judiciary framework is adapted to current justice requirements, and specifically the enforcement of its decisions; as well as with international standards, and specifically priority for implementation of the system of the system of the Organization for the Harmonisation of Business Law in Africa (OHADA).

624. Modernization of infrastructures is being pursued gradually with the aim of coordinating the establishment of judiciary coverage with the administrative map of the territory and the rehabilitation and establishment of new penitentiary institutions. This movement will be intensified with recourse to grassroots justice through regular open hearings and the institution of conciliation and police courts; as well as appropriate recourse to the judiciary assistance mechanism. Special emphasis will be placed on improving the system of archives, documentation, and computerization of judiciary and penitentiary services.

625. Human resource development will cover training, reinforcement, and motivation of judiciary staff to affirm their competence, specifically in new business contentious matters and international or environmental contentious matters. The government also intends to create a specialized penitentiary administration agency to reconcile their mission of security with the duty of social reintegration and respect for the dignity of the prisoners. Last, programs will be implemented to build capacities in the areas of budget management, planning, programming, monitoring and evaluation, and statistics management.

626. Participation of nonstate players will be intensified through (i) implementation of a support fund for initiatives by civil society organizations; (ii) redefinition of the legal and institutional framework for private sector operations to create a permanent forum for dialog and consultation to strengthen judicial security for investments; and (iii) implementation of mechanisms for prisoners to organize and maintain family or community ties to better prepare them for reintegration into society or for rehabilitation.

Promote Human Rights

627. To confirm its commitment to the dynamics to protect human dignity initiated by the United Nations, Congo has incorporated the major international and regional texts on human rights into its domestic legislation. This convergence has become particularly important in Congo with the legal protection of two vulnerable groups through the promulgation of the Law of June 14 on protection of children; as well as the promulgation of the Law of February 25, 2011 in respect of the promotion and protection of the rights of indigenous populations.

628. The government undertakes to consolidate these dynamics through the following activities: (i) promotion of the knowledge and culture of human rights through the pursuit of human rights education operations, capacity building for the national commission on human rights and its departmental directorates, and intensification of human rights information and awareness campaigns; (ii) protection of human dignity in prisons through improved management and oversight of penitentiaries, improved living conditions for prisoners, and promotion of justice for children.

Intensify The Fight Against Corruption and Impunity

629. Congo has implemented an institutional system to fight corruption and impunity. This system includes the national commission to fight corruption, fraud, and misappropriation of public funds; and the national anti-corruption observatory and ministerial units to fight corruption.

630. However, the government has not sufficiently supported the activities of the national entities. For example, rather than encouraging them to pursue serious investigations and to make the results available to the justice system for action, the government has acknowledged a proliferation of such institutions along with a dilution of their efficacy. The government is aware of the importance of the work of these organizations in fighting corruption and intends to support them more effectively in this effort. However, the government has not sufficiently supported the activities of the national entities. For example, rather than encouraging them to pursue serious investigations and to make the results available to the justice system for action, the government has acknowledged a proliferation of such institutions along with a dilution of their efficacy. The government is aware of the importance of the work of these organizations in fighting corruption and intends to support them more effectively in this effort.

631. Prevent corruption. The government undertakes to rectify the national strategy by: (i) conducting a prior study to identify the phenomenon of corruption: “active” corruption and “passive” corruption (giving and acceptance of bribes); (ii) implementing codes of ethics and professional conduct within the administration and in public contracting and services; (iii) implementing specific mechanisms such as mandatory accountability, declaration of property and assets, and protection for whistleblowers.

632. Law enforcement. The government intends to undertake the following: (i) criminal justice reform to reduce the discretionary principle in criminal proceedings as it implies partiality in justice (justice quicker to chastise the courtiers than the king); (ii) substantially improved financial information to more effectively fight cross-border organized crime; and (iii) strengthening of the system of national integrity, as fighting corruption and impunity also involves rewarding merit and excellence.

Strengthen National Defense and Security in Support of Democracy

633. Focusing initially on defending the territorial integrity, the Congolese defense and security system has shifted its focus gradually towards management of new threats deriving from endogenous and exogenous factors, particularly the emergence of armed groups, illegal light and small-caliber weapons trafficking, large-scale banditry, religious fanaticism and fundamentalism, transnational crime, armed conflicts in neighboring countries, and destabilizing influences from other countries.

634. Despite encouraging results in restoring public order and keeping peace, the Congolese armed forces and police face highly specific requirements in their work, which demands constant vigilance and innovation in light of seemingly unlimited crime potential; as well as the constraints inherent in armed activities, entailing exposure to risk, separations, and requiring availability regardless of the time or place. To meet these challenges, the government has adopted two approaches to continue the effort to upgrade the professional status of the armed forces and police and their role in economic and social development.

Upgrade the Professional Status of the Armed forces and Police

635. To modernize the armed forces and police, the government undertakes to endow this sector with an appropriate mechanism. According to the constitutional requirements, it has prepared the military programming law that will have the capacity to use a multiyear horizon to define activities to be conducted to strengthen the intervention capacities of the armed forces and police.

636. Staff. The government undertakes to rationalize and strengthen human resources, including to: (i) adapt training to requirements in connection with new threats; (ii) optimize the work force to reflect the missions to be carried out; (iii) strengthen the role of the police in execution of laws and regulations to better ensure security at the grass roots level; (iv) take due account of factors related to military status in personnel management; (v) improve discipline and the attitude of defending republican institutions within all corps of the armed forces and police; (vi) take due account of merit, excellence, and gender issues in promotions and access to responsibilities; (vii) intensify HIV diagnostics; (viii) take exemplary law enforcement action to fight acts against public assets; and (ix) take enforcement action against sexual violence.

637. Infrastructures and facilities. The government shall undertake to: (i) build administrative and barracks infrastructures to improve working and living conditions; (ii) increase the operational capacities of the armies and service support through the procurement of appropriate, effective equipment; (iii) improve and strengthen resources to project and protect the national land, air, and maritime spaces; and (iv) equip units with powerful computer and communication systems. The authorities further undertake to strengthen financial management and planning by adopting the performance-based management framework and target-based program budgeting under the medium-term expenditure framework approach.

Involve the Armed Forces and Police in Poverty Reduction

638. The government intends to benefit from the reinforcement of specialized corps of the armed forces and police to enhance their contribution to the development process and therefore to poverty reduction. In this connection, the opening of the National Regional School of Engineering and Works (ENVR) will make it possible for defense and security personnel to participate in: (i) disenclosure of the territory, specifically in construction and public works; (ii) mechanization of farming; (iii) industrialization; and (iv) computer, hydraulic, and energy engineering.

639. The government is focusing on development tasks involving the following: (i) territorial disenclosure in keeping with the accelerated municipalization and balanced development policy; (ii) mechanization of farming to increase productivity; (iii) gradual industrialization to cover its own essential equipment requirements; (iv) computer engineering; (v) hydraulic engineering; (vi) construction and public works; and (vii) energy engineering.

640. To fight idleness among young persons and citizen’s participation, the government will experiment with appropriate forms of conscription and civic service. This new focus for the defense and security forces is a partial solution to the problem of retraining staff.

Governance and the Quality of Economic Policies

641. To eliminate the dependence of the Congolese economy on petroleum, i.e., for the country’s economic diversification, sectors must emerge in which the country has comparative advantages as a result of its geographic position and other natural advantages (see Chapters 3 and 8). Strengthened economic governance is essential to ensure effective management of this change. This effort in fact requires the following:

  • (i) A clear strategic vision and integrated priority sectoral programs and activities in support of this vision (strategic planning);

  • (ii) Macroeconomic and financial management compatible with the relevant expectations but prudent enough to accommodate the requirements of medium-term macroeconomic stability, and budget management effectively aligned with the emergence program priorities;

  • (iii)A high-quality investment program that promotes economic and social development and that is effectively executed to maximize its impact; and

  • (iv) A technical institutional system that is involved in the execution of activities and in the monitoring of accomplishments and results.

The government must also devote more attention to the accompaniment of the private sector to make it a true engine for development, and adopt creative mechanisms to finance investments.

Improve the Tax System

642. The level of Congolese public revenue is still low against the backdrop of financing economic emergence and growth. It is essential to increase domestic revenue in order to avoid spending external financing, which is often difficult to forecast, insufficient, and volatile, to finance development. Such an increase in domestic revenue is also a necessary condition for the state budget to finance heavy investment required for robust, sustainable growth.

643. Mobilization of revenue requires implementation of measures to expand the tax base. The effort to improve the fiscal system will above all involve modernization of the financial administrations, strengthening of the competence of human resources, legal and regulatory texts, as well as the simplification of tax procedures and instruments. The effort will also require generalized use of information and communication technologies within the financial administrations.

Contain Current Expenditure

644. The government’s objective is to enhance the effectiveness of expenditure to ensure broader credibility in budget policy and to conduct contra-cyclical budget policy, when required to sustain economic growth. As a result, rationalization of transfers to state enterprises that are running deficits and not performing will be emphasized, so that more expenditure can be earmarked to support sectors serving as growth engines, and in this case water, electricity, roads for general use and agricultural service, and the social sectors (health, education, social security, etc.).

Promote Public Investment

645. Public investment is one of the key instruments through which the state can establish a competitive environment conducive to business, stimulate private investment, and in so doing, economic and social growth and development. From this standpoint, public investment is complementary to private investment; it also positively impacts performance in the education and health sectors.

646. Accordingly, the government will strengthen the effectiveness of public investments during the period through:

  • - The obligation it has adopted to approve in the state budget only projects that have been first subject to pre-feasibility or feasibility studies;

  • - Implementation of all reforms undertaken in connection with the plan to improve public expenditure (PAAGIP) designed to enhance the quality of investments.

Where the evaluation process is concerned, the government will ensure that all projects are subject to feasibility studies and tendering processes will be required in accordance with the public contracting code, to be coordinated by the authorities involved in public contracting in different capacities.

647. Capital expenditure will be financed to reflect the constraints of domestic financing capacities. Such expenditure may also be cofinanced with external resources mobilized under concessional terms.

Strengthen Budget Control

648. Budget control is a necessary condition for sound fiscal management. While giving new impetus to the internal supervision structures, the government therefore intends to include the networking of external supervision bodies for fiscal management, and specifically the audit and budget discipline office, parliament, and various public policy monitoring and evaluation bodies in the framework of the anticorruption law.

Strengthen Strategic and Operational Planning

649. An economic emergence strategy requires strategic and operational planning focused on achieving clearly targeted results. Against this backdrop, the government has undertaken the implementation of performance-based management instruments in the context of strengthened strategic planning organized on the basis of the DSCERP and other documents comprising the national development program.

650. The DSCERP constitutes the reference framework for public programs and policies and the operations of the technical and financial partners, which must be aligned with the national priorities under the Paris Declaration. These priorities should underpin the budget orientations to ensure effective implementation of the strategy through state budget programming and execution.

651. Within the administrations, the government will ensure generalized use of the sectoral priority action plan/medium-term expenditure frameworks (PAP/MTEF). To that end, it will establish a new organic framework to organize the administrations to reflect the pillars, objectives, and strategic missions as defined individually in the DSCERP, PAPs, and MTEFs. The aim is to move forward towards target-based planning and budgeting for programs. To that end, the status of program directors, planning and research directors, and departmental directors must be strengthened.

652. The government deems it a very important matter to maintain a continuous program to build human and institutional capacities to ensure that the recent progress in the area of strategic planning is sustainable. Special emphasis will be placed on reinforcing the statistics system in general, and specifically on the ministerial statistics units. In the long term, the MTEF/PAP approach should become standard operating procedures for all administrations.

Strengthen Administrative and Human Resource Management

653. Economic development in Congo is closely related to the quality of its administration and its human resources. Mindful of this requirement, the government has implemented a civil service reform with the following objectives: (i) to promote a new administrative culture for development; (ii) to establish a modern, effective administration; (iii) to foster the emergence of a new type of civil servant; (iv) to promote good governance and ethics within the government services; and (v) to prepare an inter-ministerial directory of civil service professions for rational recruitment management.

Policy to Finance Growth

Private investment finance credit

654. Limited access to credit is a major obstacle to business development for Congolese enterprises, particularly small and medium-scale enterprises, and therefore to economic growth. To correct this situation and stimulate growth in credit to the private sector, the authorities have implemented a financial sector reform strategy prepared with assistance from IMF staff.

655. This strategy provides a roadmap and schedule of measures executed in consultation with the private sector. These measures will concentrate on promoting better access to credit, specifically for small enterprises and households, by encouraging competition, eliminating interest rate ceilings, and ensuring that the credit supply is more transparent. These measures are discussed in detail in the financial services cluster.

Indebtedness strategies

656. Following the completion point for the enhanced Heavily Indebted Poor Countries (HIPC) Initiative, the government has undertaken to conduct a prudent indebtedness policy. Accordingly, it will pursue its policy consisting in financing development primarily based on its own resources, and will seek grants and external assistance only with concessional terms.

Improve Property Affairs Management

657. The government intends to control property affairs management in connection with the state reform. To that end, its activities will involve the following: (i) regulation of ownership duality; (ii) strengthening of institutional capacities in the sector; (iii) establishment of property reserves to benefit real property developers; and (iv) facilitation of access to serviced plots of land.

Chapter 8. Diversify The Economy to Accelerate Growth

658. Economic diversification is the key in absorbing the effects of external shocks on the Congolese economy, whose performance is closely dependent on fluctuations in the prices of inputs, and particularly petroleum. By reducing growth volatility, diversification along with greater competitiveness will lead to more robust, higher-quality growth.

659. The example of 13 developing countries9 which registered sustained growth over 25 years indicates that sound competitiveness and sustained growth fostered structural economic transformation. Against this backdrop, the resulting transformation in the Congolese economy will strengthen the economic fabric, consolidate interrelations between sectors and interactions between transactors, consolidate the markets, and lead to development in the formal sector.

660. In turn, the strengthening of the markets and enhanced factor productivity will make it possible to generate remunerative jobs and therefore attractive revenue for both wage-earners and entrepreneurs. Ultimately, the expansion and consolidation of the sources of wealth creation will make it possible to sustain a higher growth rate while ensuring that it is more broadly distributed, to increase income, and therefore to reduce monetary poverty.

661. Economic diversification strategies in Congo aim not only to develop economic activity within the sectors (intra-sectoral consolidation of agriculture with industries and commercial services); and above all to intensify the intersectoral transformation from a primary-sector economy (agriculture, mining, and forestry) to industries and commercial services, and for the players to move from the informal sector to the formal sector.

662. The objective of economic diversification will therefore require coordinated strategies and activities at three levels: (i) direct actions and strategies to stimulate the growth sectors (production sectors) of agriculture, forestry, and services; (ii) public investments to strengthen infrastructures and human resources (production factors) to reduce factor costs and improve economic competitiveness; (iii) strategies and activities to support economic players, and specifically farmers and the private sector, to improve the business and investment climate.

663. With this approach, these diversification strategies should be grouped into three major categories: (i) sector support strategies that aim to develop activities within production sectors, while stimulating conversions from the primary to secondary and tertiary sectors (cluster approach); (ii) player support strategies for private transactors, specifically involving the business climate; (iii) strategies to strengthen and liberalize the markets to facilitate domestic, regional, and international trade flows (strategies for business and regional integration and institutional and infrastructure support). These major types of strategies and key programs are described in the sections below.

664. Congo’s geographic position and advantages in connection with its physical geography (soil types, hydrography, rainfall patterns, and vegetation), make farming, stock breeding, fishing, agro-industry, forestry, wood processing industries, and commercial services the potential engines for diversifying the sources of its economic growth. Comparative advantage analyses (domestic resource cost analyses) clearly confirm that Congo is relatively competitive in the sectors discussed above (agriculture, stock breeding, wood production, mining, construction, and tourism). The study also indicates that such competitiveness may be strengthened with integrated policies to strengthen human resources, economic and institutional support infrastructures, and regional integration, with an integrated support by “cluster” of activities.

8.1. Cluster-Based Diversification Strategy

665. Concept of “clusters.” A cluster is a group of enterprises and institutions in different areas of a sector, with lead subsectors, support activities, and basic economic infrastructures. The cluster is a part of a logical sequence of primary activities (agricultural production, petroleum production, etc.), secondary production activities (agrofood, wood industry, petroleum products, etc.), and tertiary production activities (transportation, marketing, regulation, etc.).

666. Cluster approach and conventional sectoral strategies. The “integrated” primary-secondary-tertiary approach, focusing on activity sequences as well as on public and private players, offers distinct advantages as a multisector strategic planning tool and industrial policy tool. As shown by experience in many emerging countries (see box on Kazakhstan), the cluster approach helps organize and facilitate choices of economic diversification and transformation strategies (which cluster should be developed in light of its comparative advantages and market opportunities). It also facilitates coordination of programs and activities between the public and private sectors and between ministries within the government.

667. The cluster approach strengthens the conventional sectoral approach used in poverty reduction strategy papers and first-generation sectoral strategies. Under the conventional sectoral approach, subsectors are considered on an isolated basis, which leads to compartmentalized strategies making consistent programming of cross-cutting activities upstream or downstream in the production chain a difficult matter. We observe, for example, essential “rural” or “agricultural” strategies.

668. With such an approach, it is easy to overlook essential activities in the development of the subsector such as upstream activities (fertilizer, seed, etc.), downstream activities (agroindustrial products or wood products) that are in the “industrial sector,” support services” (transportation, marketing, financing, etc.) that are in the “tertiary sector,” and, to a lesser extent, key production factors such as such as labor, land, and infrastructures. In such cases, the “neglected” components will quickly become bottlenecks that will prevent growth in the sector.

669. Clusters envisaged by Congo. The government has opted to use the cluster approach to strengthen coherence in strategies between sectors and between strategies and action plans used by the players, in the implementation of its diversification and industrialization policy. In light of the regional and international market outlooks and the country’s competitive advantages, Congo envisages basing its industrialization strategy on seven clusters, including: (i) agriculture and the agrofood chain; (ii) forestry and wood processing and marketing industries; (iii) petroleum and hydrocarbons; (iv) mining; (v) construction and construction materials; (vi) tourism and hospitality; and (vii) financial services.

Figure 7.Industrial Policy Using The Cluster Approach The Case Of Kazakhstan

Source: STP/DSCERP.

670. Clusters and Special Economic Zones. The economic diversification strategy is based on the development of clusters and the creation of Special Economic Zones (SEZ). In light of Congo’s natural advantages and the geographic location of its natural resources, the government envisages development of the following four Special Economic Zones:

- The Pointe-Noire Special Economic Zone on the coast earmarked for petrochemical, iron and steel, and mining activities;

- The Brazzaville Special Economic Zone encompassing transportation and services (finance, trade, and hospitality);

- The two-center Oyo-Ollombo Special Economic Zone devoted to agrofood, service, transportation and food agriculture activity;

- The Ouesso Special Economic Zone devoted to agriculture, forestry, mining, and ecotourism.

Figure 8.Congo. Special Economic Areas and Diversification Clusters

Source: STP/DSCERP

671. The clusters are described in the sections below. For each cluster, an analysis of the situation is presented—market outlook, Congo’s advantages, mapping of the key players, and main products in the subsector. Next, the key strategic pillars, framework programs, and key projects are indicated to develop the cluster and enhance its contribution to growth, employment, state resources, and therefore its impact on poverty reduction.

8.1.1 Petroleum and Hydrocarbons Cluster

Players: Nine Consortia Exploring 15 Permits and 36 Fields

672. The cluster lead includes nine consortia exploring 15 permits and 36 fields. The basic structure includes the following: (i) Upstream: petroleum comprised of exploration, development, and production for crude oil and gas; (ii) Intermediate or midstream phase which includes transportation, storage, and trading; and (iii) Downstream which includes refining and distribution activities. The core businesses of these enterprises are closely or even exclusively related to hydrocarbons.

Figure 9.Overview of Congo’s Hydrocarbons Cluster

Table 18.List of Key Petroleum Operators
No.OperatorNo. 2OperatorsNo. 4Operators
1Total Exportation-Production4Congo Rep7AOGC
2ENI Congo5CMS Nomeco8Prest-Oil
3Murphy W.A. Ltd.6Perenco9SNPC
Source: ST/DSCERP and International Development Consulting.
Source: ST/DSCERP and International Development Consulting.

673. While Congo’s hydrocarbons cluster has no missing links, clear differences are evident between crude oil and gas. Exploration activities involve 16 companies (or consortia) operating with approximately 12 permits, including SNPC, exploration and production companies, including Total, ENI, Perenco, Murphy, Congo Rep, Prest Oil, CMS Nomeco, SNPC, Maurel Prom, Chevron, SOCO, Pilatus, ADECO, Premier, Wing Wah Congo, and Cliveden. Exploitation covers 36 fields, primarily operated by the exploration companies listed above.

674. The cluster lead includes seven petroleum testing and inspection companies also involved in downstream petroleum activities (Schlumberger, SGS, ITS, Q&Q Controle Services, Bureau Veritas, Cete Apave, and Cotecna). Downstream petroleum operations include refineries (CORAF), light petroleum gas (LPG) distribution (GPL SA), petroleum product transportation and storage companies (GPL SA, SCLOG, ILOGS, etc.), trading companies (SNPC, Orion), fuel distribution companies (Total Congo, Puma Energy, X-Oil, Afric (AOGC), Hydro-Distribution (SNPC, OMEGA EC), and storage companies (Puma Energy).

675. The composition of the cluster lead clearly illustrates how long exploration and production activities have been present in Congo. We note the presence of major international companies such as Total and ENI, smaller foreign oil companies such as Perenco, and many public or private Congolese companies such as SNPC and X-OIL Congo.

Strengths: Substantial Potential to Contribute to Growth

676. Congo has substantial crude oil reserves, although its gas reserves are more modest. Congo is also relatively competitive in terms of exploration and exploitation costs, which may improve further in connection with the reform efforts in the subsector and substantial investments in the rationalization of capacities and production methods. This combination of strong potential, in terms of capacities and competitiveness, promises to make the subsector a true driving force in the country’s emergence. The subsector may make a substantially larger direct contribution to national wealth, job creation, and to public development financing.

Crude Oil: 40 more years of production at the current rate

677. Congo has reserves that, according to recent estimates, are considered to be approximately equivalent to 40 years of production at the current rate. Also, for a number of years, trends have seemed to disprove the assumptions of a permanent decline in petroleum production often indicated in the macroeconomic projections. We observe in fact that, after a sharp decline in 2007, there has been a steady increase in production as a result of a series of starts in several new fields, including Azurite and Moho-Bilondo, and the stimulation of mature and more marginal fields. At the current rate of production, such potential would permit at least 40 years of exploitation and related activities. In addition, the outlook for future discoveries is encouraging in light of the scale of investments in exploration and the favorable natural conditions in Congo. The country’s outlook for growth in petroleum production activities is generally good, with substantial impacts on GDP and state revenue.

Figure 10.Congo, Crude Oil Potential Production, Reserves, and Taxation

Source: STP/DSCERP

Apparent Petroleum Taxation in the Franc area

1999200020012002200320042002-2006
Côte d’Ivoire14%13%12%1%6%4%
West African Economic and Monetary14%13%12%1%6%4%
Union
Cameroon31%58%53%64%57%56%51%
Congo31%29%31%28%33%36%29%
Gabon32%45%50%40%37%35%47%
Equatorial Guinea16%17%26%26%27%30%18%
Chad6%7%11%
CEMAC32%37%38%35%34%31%
Franc Area31%36%38%34%33%31%
Source: STP/DSCERP
Source: STP/DSCERP

GAS: substantial wealth, although still insufficiently exploited

678. Until recently, gas associated with crude oil was simply torched (burned) or sold if not reinjected into certain oil wells. The Congolese authorities have recently adopted regulatory measures banning torching as of April 1, 2012 to stimulate prices for and optimize gas, inter alia. As a result, the value chain for gas might extend to transportation (gas pipeline) and sales (trading) for processing plants: electricity, fertilizer, metallurgy, etc. The “Gas” cluster will therefore develop rapidly, and as a result, entails substantial potential to contribute to Congo’s industrialization and development.

679. At the same time, gas exploitation still suffers from the small scale and dispersion of the fields. However, Congo has sufficient gas reserves to cover its domestic requirements (approximately 73 billion cubic meters) for the next 20 years. At the current rate of exploitation, proven reserves should allow approximately 20 years of production. The gas now injected into the Nkossa deposits, expected to be exploitable beginning in 2027, of 60 billion cubic meters, could thenceforth play a key role in the supply. However, with a national development strategy, Congo could increase its reserves and exploit gas for different purposes, including as an input for electricity production, petrochemicals, and even light metallurgy.

Petroleum taxation

680. In general, Congo’s petroleum exploitation is quite profitable the result of an effective taxation system. Specifically, taxes deriving from production sharing agreements guarantee Congo a share of national wealth exceeding 30 percent of total petroleum revenue, which has recently even exceeded 58 percent, placing the country at the world average and ranking Congo among the best remunerated countries in the region.

Figure 11.Congo: Gas Reserves and Production Potential

Source: ST/DSCERP, international development consulting, data from the Ministries of mining and Hydrocarbons, and the private sector.

Refining and Trading: Storage capacities to be rationalized

681. At the national level, trading activity involves only the sale of the state’s share in hydrocarbon production. This activity is incumbent on the national oil company, the SNPC, and to cover national requirements, some crude oil accruing to the state is earmarked for refining by the national oil refinery, CORAF. As a result of equipment problems, CORAF is operating at 70 percent of capacity and covers only 70 percent of the country’s requirements for petroleum products (all products combined, with the exception of asphalt, which is still not produced locally). The other operating companies use the trading units in their groups for their share of production.

Support activities: Promising, although local content is still insufficient.

682. Support activities for the Hydrocarbons Cluster involve a substantial number of operators—suppliers and subcontractors, although they are substantially expatriates. These include:

  • - Suppliers of inputs (plastics, pipes, gas, and lubricants): EXA International, Congo CEAN, etc.;

  • - Labor suppliers including labor placement companies for drilling platforms and exploration sites (on-shore);

  • - Engineering companies (engineering and design firms) and service providers in new technologies (hardware and software): Georex Congo, PFI, Upstream, African Energy, Gulf Oil & Gas, Sys+Net, CIM, IAD, and ARD;

  • - Builders and suppliers of infrastructures or specialized services: CSCEC, Baker Hughes, FORSPAC, SENIG, and Halliburton;

  • - Logistics service providers (handling, helicopters, and platform services).

683. Congolese players are insufficiently represented in the chain of support activities. This is attributable in part to the specialized technological requirements of the subsector (highly specialized personnel and equipment requiring substantial management and financial resources). However, this chronic under-representation is also the result of an absence of a government strategy for the “domestic content” of the chain. A long-term strategy is essential to attract and sustain Congolese nationals in the subsector to increase its contribution to the creation of national wealth, employment, and poverty reduction.

684. The potential for support activities in the hydrocarbons cluster to contribute to employment growth in Congo is therefore dependent on the government’s willingness to implement a “domestic content strategy” and its effectiveness in doing so. Such a strategy will have even more rapid, substantial impacts than exploration, exploitation, and refining operations, which require substantial capital and high levels of technology.

Basic economic services and infrastructures: Well-known weakness in human resources

685. This area involves the physical infrastructures required for the development of the hydrocarbons industry: means of transportation, roads, river and maritime ports, railroads, oil pipelines, gas pipelines, etc.; and electricity and water systems.

686. It is important to point out that the infrastructures required to carry out various research, exploration, and production activities were executed by the operators themselves rather than by the state. Construction of an oil pipeline and a gas pipeline between Pointe-Noire and Brazzaville would be economically advisable.

687. The state has already devoted substantial resources to infrastructure development in the petroleum area, and specifically the international airport and the deepwater port of Pointe-Noire, as well as the upgrading of the railroad, Chemin de Fer Congo Océan (CFCO). It intends to pursue its efforts to support development of the cluster.

688. The qualitative weakness in Congolese human resources and public and private support services, the retirement of many of the technicians, and lack of available technical resources are even greater concerns for the success of the cluster. This entails:

  • - Public agencies responsible for preparing sectoral policies (Ministry of Hydrocarbons), regulation (Downstream Petroleum Regulatory Agency), and management of state holdings (SNPC);

  • - Initial and continuing education institutions (Université Marien N’Gouabi and professional training centers) responsible for providing industry with technical experts, engineers, and specialized professionals (legal experts and economists specializing in petroleum, engineers, geological technicians, geophysicists, and petroleum technicians for drilling and deposit management), and computer and automation specialists;

  • - Audit, accounting, and management consulting firms (recruitment, training, etc.) such as Next / Schlumberger, Deloitte, and CAC.

689. Meeting this industry’s requirements for high-quality human resources will involve efforts targeted primarily at the Congolese expatriate community. To that end, the state will implement a public-private partnership with transactors in the sector to facilitate the process.

Sector governance

690. The issue of strengthening capacities of human resources is a core concern in connection with sector governance. The agencies responsible for regulating the sector (upstream and downstream) and the Société Nationale de Pétroles must acquire competent, regularly retrained personnel in a sector undergoing profound, rapid change. Accordingly it would seem that the public agencies involved in the sector must be capable of anticipating and addressing problems through (ii) adaptation of the current legal framework that justifies the drafting of a new Hydrocarbons Code; (iii) transparency in petroleum resource management (information on reserves, crude oil production and marketing, etc.); monitoring and control of production, and marketing of crude oil by the state; (iv) the absence of a system to manage the adverse effects of petroleum activities on the natural environment and health conditions.

691. Training centers also register insufficient human and material resources and strategic management capacities, requiring sustained support. Strengthening the national expertise in these areas as well as the professional associations (consulting and advisory firms) is a prerequisite for Congo to address the technological and environmental stakes and challenges related to petroleum activity.

Key Strategies, Programs, and Projects

692. In connection with the sectoral strategy under the national development plan, the Government has devised an ambitious program to overcome the constraints listed above, which are preventing expansion of the hydrocarbons subsector. Implementation of this program will make it possible to develop the subsector into a true engine for transformation and growth in the subsector. In the medium term, these programs include structuring reforms and investments. They have been developed and will be deployed according to the following strategic pillars:

  • Cluster leads: resumption of petroleum, gas, and petroleum product production;

  • Support sectors: accompaniment of support activities, improvement of their national content, and optimization of state revenue;

  • Infrastructures and other production factors: development of infrastructures, human resources, and public services to support management of the subsector.

Pillar 1. Direct activities of the subsector (cluster lead)

Resumption of crude oil and gas production

693. The private sector envisages substantial investments to resume petroleum and gas production. The key private projects include:

  • Development of crude oil production at Moho Bilondo (Total EP Congo). In fact, Total EP plans to invest US$10 billion to develop Moho Bilondo Nord, which in 4-7 years will enable a substantial increase to be achieved over the current level of production.

  • Oil sand production (ENI Congo): This project has substantial technological content for an estimated output of 40,000 barrels per day, which would clearly impact activity within and outside of the sector;

  • Gas production and gas and electricity service for mining industries (ENI).

Increased refining and storage capacities

694. CORAF is now operating at only 70 percent of capacity and covers approximately 70 percent of domestic demand for refined petroleum. As a result, Congo imports approximately one third of its petroleum product consumption, which can be expected to increase as a result of economic growth and greater demand for fuel.

695. The strategy consists in strengthening CORAF and modernizing its equipment to improve its rate of capacity use. In light of CORAF’s limited size and competitiveness, the main goal of the redeployment strategy for the refinery should be to meet domestic market demand in order to reduce imports. At this point, exporting cannot be considered owing to problems of scale and competitiveness.

696. To rationalize production capacities and increase the rate of capacity use, CORAF should undertake or establish the following:

  • - Any unblocking of the hydrocracking and main hydrorefining plants that might be required;

  • - A liquid petroleum gas (LPG) extraction unit for petrochemicals and mining;

  • - A 50,000 ton per year bitumen unit and visbreaker.

During the period, the government will study the option of building a new refinery dedicated to export production.

Storage and distribution activities

697. Storage. The SCLOG’s storage capacities (80,000 cubic meters) are clearly insufficient. This capacity represents only 22 days of consumption for Brazzaville and 25 days for Pointe Noire. When we project medium-term annual consumption trends, it is estimated that storage capacities will fall below one day of consumption for these areas by 2014. Accordingly, substantial investments must be made to develop storage and distribution capacities.

698. In this connection, the government will undertake a vast investment program to double storage capacities so that an initial stock of at least 30 days can be established for Brazzaville and Pointe Noire, and subsequently to increase reserve stock to 30 days by 2014, with the ultimate aim of reaching the average international standard reserve stock of 90 days.

699. Petroleum product distribution has yet to achieve satisfactory territorial coverage. It lacks a sufficient basic infrastructure—specifically transportation (road, railroad, and navigable waterways) and storage facilities (warehouses and service stations).

700. The government’s strategy should ensure creation of the following at the horizon 2016:

  • - Service stations along the roads and highways;

  • - Petroleum product storage warehouses at all airports and ports;

  • - New filling centers in the interior of the country to make butane accessible to households in the departments;

  • - Strategic warehouses (fuel depots and filling centers) to service neighboring countries, etc.

Pillar 2: Support activities

Service providers and subcontractors

701. Support activities for the hydrocarbons cluster immediately complement the cluster lead that supplies the local content. They entail:

  • Suppliers of inputs (plastics, pipes, gas, and lubricants) such as EXA International and Congo CEAN;

  • Labor suppliers (temporary placement companies) that place workers for drilling platforms and exploration sites (on and off shore);

  • Engineering companies (engineering and design firms) and service providers in new technologies (hardware and software): Georex Congo, PFI, Upstream, African Energy, Gulf Oil & Gas Sys+Net, CIM, IAD, and ARD;

  • Builders and suppliers of infrastructures or specialized services CSCEC, Baker Hughes, FORSPAC, SENIG, Halliburton, etc.;

  • And last, suppliers of logistics services (handling, helicopters, and platform services).

702. In this sector, the government intends to involve Congolese nationals through the development of joint ventures, with the understanding that, through their representation structures, the national players still lack the capacities required to participate effectively in choosing technical and strategic options. Support activities are covered by suppliers and subcontractors, which are predominantly of foreign nationality. The business subsector, however, is predominantly covered by Congolese nationals. The strategy the government will phase in should clearly encourage Congolese nationals to join the subsector with a view to its development.

Pillar 3. Infrastructures and other production factors

Basic infrastructures

703. This pillar entails strengthening of means of transportation and the energy and water supply. This important dimension of indirect support for the subsector is subject to an integrated national strategy that is described in detail in Chapter 11 on infrastructures. In implementing this vast pillar of the national plan, the government will devote particular attention to infrastructures such as transportation and energy which will have the greatest impact on the competitiveness of growth sectors, specifically involving the petroleum and hydrocarbons cluster.

Reforms in institutional support to the sector

704. The state will endeavor to facilitate and accompany the process of recovery and expansion of production and support activities, and to stimulate development of basic services, specifically institution reforms, strengthening of human resources, and improvement of infrastructure services. In the process, it will take steps to facilitate investment and to encourage participation of Congolese nationals, primarily in support and subcontracting activities.

705. Institutional reforms. A new Petroleum Code will be adopted to reflect the change in the context of production sharing agreements introduced in 1995. This Code will overhaul petroleum taxation and optimize capitalization of petroleum revenue. Implementing texts will be promulgated to clarify and reinforce the conditions to control petroleum costs and to monitor and oversee operations that place the state administrations and other partners on par in terms of information.

706. A Gas Code should also be drafted to organize activities for gas development and strengthening of local content. These instruments, particularly the gas agreement, will specify, supplement, and expand the existing provisions on gas in the production sharing agreements. They will also specify the delivery points, availabilities, quantities to be delivered, as well as the prices, specifications for gas at the delivery point, ownership of means of transportation (gas pipelines and processing plants), etc. In fact, all forms of gas and its derivatives require special precautions, including those applicable to consumer safety.

707. Strengthening of national content. Local job content is insufficient and confirmed as such to be a true obstacle to the transfer of skills. It is therefore an essential matter to strengthen the partnership between the state and enterprises present in Congo. Regulations and agreements should be signed to enable these enterprises to be involved in construction of basic infrastructures (energy, hydraulics, transportation, etc.), to organize capacity building activities for human resources in order to facilitate technology transfer, to establish goods and services companies that meet the requirements and standards of the petroleum industry.

708. Through appropriate methods, the state will encourage, establish, and sustain the emergence of small and medium-scale enterprises and industries, finance microprojects, and encourage cooperative initiatives in several business sectors. While this process exceeds the petroleum framework, it will be supported and cultivated with resources from this sector.

709. Strengthening subsector governance. The government intends to rationalize its operations and support in the subsector, to obtain a maximum impact. These efforts will be broken down into three different missions: (i) sector planning activities; (ii) sector regulation activities; and (iii) marketing activities for production accruing to the state.

710. Strategic planning. The sectoral ministry has prepared a priority action plan. A sectoral policy letter and a strategic plan for hydrocarbons development will be finalized to clarify the major programs, guidelines, objectives, and financing strategies for the sector.

711. Sector regulation involves establishment of clear rules for competition, as well as the operating mechanisms for the sector based on the hydrocarbons code and its implementing texts.

712. Marketing involves activities to place the state’s shares of petroleum and petroleum derivatives, and national stakes in operating activities, on the market. To that end, the government’s program will strengthen the SNPC—the marketing agency for the state’s share. Clarification and formalization will also be required for the sale price to be applied by CORAF to enable it to balance its accounts while applying a price at the pump that is “accessible” to the public.

Capacity building and large-scale training leading to qualifications

713. This is clearly the most critical mechanism through which the government must accompany the private sector in the recovery of the subsector, and ensure substantial participation in the medium term by Congolese nationals, which will maximize its effects in terms of employment, income, and poverty reduction. For this reason, to fill the numerous qualified labor gaps identified in the sectoral surveys, the government undertakes to develop a wide-ranging training program for professionals and technical specialists in various national areas of activity, and specifically petroleum, gas and mining, and other sectors in which clusters conducive to growth are likely to develop.

714. Against this backdrop, the government will involve the key employment generating operators. It will adopt specific incentive measures for recruitment of interns, and will encourage on-the-job training leading to qualifications. This priority action will clearly help enrich the local content and accelerate Congo’s modernization and industrialization process.

Protection of resources and the environment

715. While devoting efforts to a structured dialog effort with private operators in the subsector, the state also intends to exercise its sovereign power to rationalize choices, in order to reconcile the interests of operators and those of the country to increase wealth while ensuring that Congo’s environment and natural resources are protected. Environmental impact studies will now be required before any project is carried out.

Expected Impact on Growth, Employment, and State Revenue

Reserves

Box 8.Moho Billondo Nord Project

Total Assesses the Moho Bilondo Project at US$10 billion

(Reuters - published on July 24, 2011 at 15:40)

  • Total assesses the investment required to develop the Moho Bilondo Nord oil field off the coast of the Republic of Congo at US$10 billion (€7 billion), declared Christophe de Margerie, its Chief Executive Officer.

  • The Chief Executive Officer of Total, Christophe de Margerie, stated that the petroleum group estimated the investment required to develop the Moho Bilondo Nord oil field off the coast of the Republic of Congo at US$10 billion (€7 billion). (Reuters/Richard Carson).

    • “The Moho Bilondo Nord project is the future of petroleum exploitation at the horizon 2015 in Congo,” declared Christophe de Margerie after a meeting last week with President Denis Sassou Nguesso, as reported in the Congolese public press.

Investment

716. Key projects will be the ENI oil sand project planned for 2014 (if executed) and the Moho Bilondo oilfield operated by Total. Projected investment amounts to at least US$18.026 billion, including US$10 billion for the Moho Bilondo oilfield alone, and the balance for ENI projects to build thermal power plants and extract oil from oil sand.

Production and growth

717. Specifically, Moho Bilondo will start production and reach a fully operational level of at least 250,000 barrels per day following tremendous investments announced by management of TEP/Congo. Macroeconomic simulations (See Chapter 15) indicate that such growth in petroleum production can be expected to lead to a growth increase in the overall petroleum sector of approximately five points, and average annual GDP growth of 1.3 points.

Table 19.Congo’s Petroleum Reserves
CompanyMining productSiteDEPGross reserves (millions of barrels)Reserves (billions of cubic meters)Gas reserves (billions of cubic feet)Reserves (millions of tons of oil equivalent)
Subtotal, PetroleumSubtotal, Petroleum6,0000.954822
Associated gasSubtotal, Proven and developed341,20031
ENIAssociated gasMboudiDjeno/CEC62125.40
ENIAssociated gasKitina2711.80
ENIAssociated gasLoango31132.88
PerencoAssociated gasLikouala0.40140.36
Associated gasMove Marin0.30110.27
TotalAssociated gasAndromède3882.25
ENIAssociated gasIkalou Marin0.1660.14
Associated gasNkoungui Marin0.30110.27
Maurel & ProAssociated gasVandji Marin2531.35
TotalAssociated gasManzi Marin0.0410.04
ENIAssociated gasBanga Sud Marin0.1450.13
Associated gasBoundji2601.53
Other51694.32
Subtotal, Proven and undeveloped2381321
ENINatural gasBanga Marin72587
ENINatural gasLouvesi Marin2742
ENINatural gasNkala2712
ENINatural gasLibonolo93188
TotalNatural gasGounda1461
CNOCNatural gasPoalvou82867
OtherNatural GasOther2782
Subtotal, Fields in production321,13029
ENINatural gasLitchendjili2277720
OtherNatural gasOther under research and not developed1967117
Subtotal, Unexploited natural gas411,44737
Total, Gas1304,590117
Subtotal, GasSubtotal, Gas1304,590117
Total, Hydro-carbonsTotal, Hydrocarbons939
Source: ST/DSCERP, international development consulting, data from the Ministries of Mining and Hydrocarbons, and the private sector.
Source: ST/DSCERP, international development consulting, data from the Ministries of Mining and Hydrocarbons, and the private sector.

Employment

718. Capacity building in the government and development of skills in the private sector will lead to a new and more positive employment outlook. It is estimated that direct development and development in the support sectors will contribute to the creation of more than 3,500 jobs, approximately two thirds of which will derive from direct activity in the sector.

State revenue

719. Annual average revenue deriving from the hydrocarbons sector reportedly amounts to US$12.936 billion. Approximately 55 percent reportedly accrues to the Congolese government in various forms (production sharing and taxes), equivalent to CFAF 3,289 billion, corresponding to a price of US$90/barrel based on an exchange rate of CFAF 500 = US$1.00

Table 20.Congo, Annual Crude Oil Production by Operator
CompanyMining productSiteInvestment (millions of US$)Direct jobsSecondary jobs2012 Output (barrels per day)2012 Output (tons per year)
TotalCrude oilSubtotal, Misc., Total10,0002,200900167,1978,402,863
ENICrude oilSubtotal, ENI00083,5044,175,206
ENI (oil sand)Oil sandTchikatanga-Makola2,00040,0002,000,000
MurphyCrude oilAzurite11,027551,370
Congo RepCrude oilEmeraude9,863493,151
CMS NomecoCrude oilYombo Messeko9,041452,055
PerencoCrude oilLikouala7,123356,164
AOGC1105,479
Prest Oil331,644
SNPCCrude Oil49324,658
Subtotal, PetroleumSubtotal, Petroleum12,0002,200900328,39216,462,590
Source: ST/DSCERP, data from the Ministries of Mining and Hydrocarbons, and the private sector.
CompanyMining productSiteInvestment (millions of US$)Direct jobsSecondary jobsOutput, year, full productionOutput, year, full production t/year
CORAFDry gasNitrogenated fertilizer5017330,000
200
CORAFDry gasMethanol5017748,440
200
CEC/CED/TEP-EDry gasElectricity1,125150501,800,000
SCLOGStorageCountrywide20010033100,000
GPL.S.A.Filling center50 tons per day4401315,000
SNPCFilling center100 tons per day8702330,000
Associated gasSubtotal, Proven and developed1,73746015303,023,440
TOTAL, GAS1,73746015303,023,440
Subtotal, GasSubtotal, Gas1,73746015303,023,440
Total, HydrocarbonsTotal,13,7372,6601,053328,39219,486,030
Hydrocarbons
Source: ST/DSCERP, data from the Ministries of Mining and Hydrocarbons, and the private sector.
Source: ST/DSCERP, data from the Ministries of Mining and Hydrocarbons, and the private sector.
Table 21.Investment, Jobs, and Revenue
CompanyMining productSiteInvestment (millions of US$)Direct jobsSecondary jobs2012 Out-put (barrels/day)2012 Output (Tons/yr)Price crude US$/barrelPrice US$/tonRevenue millions ofState share billions CFAF/year (55%)
TotalCrude oilSubtotal, Misc., Total10,0002,200900167,1978,402,863
ENICrude oilSubtotal, ENI00083,5044,175,206
ENI (oil sand)Oil sandTchikatanga-Makola2,00040,0002,000,000
MurphyCrude oilAzurite11,027551,370
Congo RepCrude oilEmeraude9,863493,151
CMSCrude oilYombo9,041452,055
NomecoMesseko
PerencoCrude oilLikouala7,123356,164
AOGC1105,479
Prest Oil331,644
SNPCCrude Oil49324,658
Subtotal, PetroleumSubtotal, Petroleum12,0002,200900328,39216,462,5909065710,8162,974
Source: ST/DSCERP, international development consulting, and data from the Ministries of Mining and hydrocarbons and the private sector.N.B.: The natural gas price of US$272 per petroleum equivalent ton corresponds to US$7/MMBTU (US$7 per million BTU, NYMEX international price unit).
CompanyMining productSiteInvestment (millons of US$)Direct jobsSecondary jobsOutput, year, fully operationalOutput, year, fully operational (tons/yr)Price crude US$/barrelsPrice US$/tonRevenue millions of US$/yearState share billions of CFAF/year
CORAFDry gasNitrogenated fertilizer5017330,0002809225
200
CORAFDry gasMethanol5017748,44025018751
200
CEC/CED/TDry gasElectricity1,125150501,800,000470846233
EP-E
SCLOGStorageCountrywide20010033100,0003031
GPL.S.A.Filling50 tons per day4401315,00040062
Source: ST/DSCERP, international development consulting, and data from the Ministries of Mining and hydrocarbons and the private sector.N.B.: The natural gas price of US$272 per petroleum equivalent ton corresponds to US$7/MMBTU (US$7 per million BTU, NYMEX international price unit).
CompanyMining productSiteInvestment (millions of US$)Direct jobsSecondary jobs2012 Out-put (barrels/day)2012 Output (Tons/yr)Price crude US$/barrelPrice US$/tonRevenue millions ofState share billions CFAF/year (55%)
SNPCcenter Filling center100 tons per day8702330,000400123
TOTAL GAS1,73746015303,023,4401,147315
Source: ST/DSCERP, international development consulting, and data from the Ministries of Mining and hydrocarbons and the private sector.N.B.: The natural gas price of US$272 per petroleum equivalent ton corresponds to US$7/MMBTU (US$7 per million BTU, NYMEX international price unit).
Source: ST/DSCERP, international development consulting, and data from the Ministries of Mining and hydrocarbons and the private sector.N.B.: The natural gas price of US$272 per petroleum equivalent ton corresponds to US$7/MMBTU (US$7 per million BTU, NYMEX international price unit).

Box 7.Regional cooperation for the refinery - CEMAC Regional Economic Program Strategy

1. In the area of refining, rather than expanding national refineries that are too small, obsolete, and often costly in terms of state subsidies, the CEMAC member states will elect to pool their resources to establish a large, modern, and competitive regional refinery that has the required size (a production capacity of 8-10 tons per year) and that is equipped with a storage platform that can meet the requirements of all CEMAC countries. All CEMAC member countries will be invited to the round table discussion of this regional multinational, as well as the major oil companies, representatives from the regional private sector, and CEMAC citizens, through the regional stock exchange. This unit will be managed on strictly commercial rules with governance that meets international standards.

2. Establishment of this regional refinery will simultaneously make it possible to develop regional LPG production with approximately 12 new industrial units (assembly unit for household and industrial bottled LPG and LPG packaging units). A storage platform for refined oil products will also be provided for exports on the regional market.

3. In the area of gas, the current liquefaction plant in Equatorial Guinea has the resources to become a visible player on the world market if it expands substantially. This presumes that it is supported not only with Equatorial Guinean gas reserves, which are substantial but insufficient, as well as the regional reserves, particularly from Cameroon. In this framework, Equatorial Guinea, while retaining its majority, may open its shareholding to other countries in the subregion, and specifically those contributing to the gas supply. New regional LNG centers may next gradually be established to reflect targeted gas prospecting and discoveries in neighboring countries, ultimately making CEMAC a reference center in liquefied natural gas production.

4. In the short term, gas will make it possible to produce sufficient electricity while the hydroelectric dams are being built and become operational. This regional gas exploitation will also enable development with the construction of a regional petrochemical operation to produce NPK fertilizer with the launch of several units using synthetic urea (Gabon), in addition to potassium chloride and phosphate resources (Congo).

Figure 12.Petroleum Cluster, Strategy, Programs, and Projects

8.1.2 The “Mines” Cluster

The Actors: About Fifty Companies

720. The cluster head consists of 47 companies. The basic structure comprises: (i) Upstream mining consisting of prospecting and exploration activities, Downstream mining consisting of development, exploitation, transportation, conversion and export activities. As at 30 June 2011, mining statistics were as follows: 32 prospecting licenses granted to 28 companies, 42 exploration licenses granted to 26 companies; and 5 mining licenses granted to companies.

Figure 13.Outline Of The Mines Cluster In The Congo

Table 22.List Of The Main Mining Operators
COMPANIESMINERALSSITE
MPDIRONZanaga
CORE MININGIRONAvima
CONGO IRONIRONNabeba/Shanga
DMCIRONMayoko/Kekoumou
CONGO MININGIRONMayoko
MPCPOTASHMengo (Kouilou)
SINTOUKOLA POTASHPOTASHSintoukola (Kouilou)
SOREMIPOLYMETALSYanga Koumbaza

721. The MINES cluster only exists upstream in the Congo. Today, mining production is only very marginal and for several decades, has been purely artisanal though the country experienced a period of mass production in the past. During the colonial period, we saw small-scale mechanized mining activities. From independence (1960) to 1989 (the collapse of the Soviet bloc), the mining sector experienced industrial expansion that was limited to the potash company, Makolo (ex-Holle) and the polymetals of Mfouati, Boko-Songho and Mindouli. Artisanal mining was limited to the exploitation of precious stones, notably gold in Kelle, Kakamoeka, Mayoko and in Souanké. However, since the adoption of the Mining Code in 2005, mineral exploration in polymetals, potash and iron was given a boost.

722. Congolese mining potential remains under-explored and under-exploited. Cartographic coverage, which is essential for defining the available potential in the country, is poor and obsolete. Geological studies carried out date back to the 1960’s. They currently barely cover 20% of the country and are unable to provide detailed geological and mineral information, with the result that the resources of the subsoil remain unknown. Sociopolitical events destroyed part of the documentation which may have assisted in building a general policy for the development of the sector based on clear guidelines. Which means that almost everything still remains to be done as regards the basic data required for the knowledge and the planning in the development of the sector.

723. Current production is mainly artisanal and concerns diamonds and gold, above all else. For several years, the mineral prospecting and exploration activities have been experiencing a new dynamism. The cluster head cluster consists of 28 companies which are holders of prospecting permits, and 26 companies which are holders of exploration permits. Among these companies, nine (9) already have significant projects that are likely to lead to industrial exploitation in the near future (cf. Table **). Exploration activities are concentrated in four departments but are distributed across the country and concern numerous substances:

  • - Iron (SANGHA, LEKOUMOU, WEST CUVETTE, NIARI);

  • - Polymetals (POOL, NIARI, BOUENZA, WEST CUVETTE);

  • - Gold (NIARI, WEST CUVETTE, SANGHA, LIKOUALA, KOUILOU);

  • - Diamonds (SANGHA, NIARI, LIKOUALA);

  • - Phosphates, Potash, Potassium salt, Bituminous sandstone (KOUILOU);

  • - Chrome, Nickel (LEKOUMOU);

  • - Bauxite, Tin (NIARI);

  • - Lead, Zinc, Copper and “Terres noires” (POOL);

  • - Uranium, Colombo-Tantalite (KOUILOU, NIARI);

  • - Tin (NIARI);

  • - Cassiterite (KOUILOU, LEKOUMOU);

  • - Titanium (SANGHA).

724. As at 30 June 2011, only 5 mining permits had been granted:

  • - A potashpermitto MAG MINERALS Potasse du Congo (MPC) in the Pointe Noire zone (Mengo);

  • - Two polymetal mining permits to the company SOREMI, in BokoSongho and Yanga-Koubenza in the Mfouati/BokoSongho zone;

  • - Two polymetal mining permits in Mindouli-Mpassa to the company LULU.

725. Other relatively advanced projects (feasibility study phase complete) are:

Nabembairon (Congo Iron)

  • - Zanaga iron (MPD)

  • - Mayoko iron (DMC)

  • - Avima iron (Core Mining)

  • - Mayoko iron (Congo Mining).

726. Numerous other projects are in the prefeasibility phase, including that of potash by the company Sintoukola Potash.

Strengths: Strong Potential For Growth And Government Revenue

727. The Congo has considerable mineral reserves. Several projects could be launched within the scope of this plan: the deposits are rich, the markets are buoyant and the political situation and macroeconomic framework are favorable. Mines have been prioritized in the policy of diversification.

728. The potash projects are the most advanced, even though the potash market is difficult to penetrate given their control by large international groups. For their part, iron deposits present comparative advantages: considerable reserves, high grades, low production costs, proximity to the port and the existence of railway lines to the Congo, Gabon and Cameroon. Lastly, electricity and natural gas required for processing are available.

Table 23.Main Mining Projects
COMPANIESMINERALSSITERESERVES (MILLIONS T)INVESTMENT (MILLIONS US$)DIRECT EMPLOYMENTPRODUCTION IN MODEL YEAR (T/YEAR)START OF PRODUCTION
MPDIRONZanaga40006000400045 000 0002016
CORE MININGIRONAvima1000400030003 5 000 0002013
CONGO IRONIRONNabeba/Shanga3192000151820 000 0002014
DMCIRONMayoko/Kekoumou260010005 000 OOO2013
CONGO MININGIRONMayoko100020105 000 0002013
TOTAL IRON891911528110 000 000
MPCPotashMengo (Kouilou)3316001000600 0002014
SINTOUKOLA POTASHPotashsintoukola (Kouilou)8041200500600 0002015
SOREMIPolymetalsBoko Songho/Yanga Koumbaza5030012 0002012
LULUPolymetalsMindouli-Mpassa6020 000
TOTAL897285018001 232 000
Source: ST/DSCERP and INT-DEC, Data from the Ministry of Mines and the private sector
Source: ST/DSCERP and INT-DEC, Data from the Ministry of Mines and the private sector

The SUPPORT ACTIVITIES: promising, but still lacking in local content

729. The support activities of the MINES cluster concerns a large number of operators – suppliers and subcontractors, but who are mainly expatriates. With the cluster not yet being mature, the exploration phase concerns: (i) equipment suppliers: camping, prospecting, geophysical and drilling equipment; (ii) mapping service providers, Geographic Information System, Geochemistry and Laboratory, Data processing, etc.

730. The national actors are poorly represented in the chain of support activities. This is due in part to the particular technical requirements of the sector (highly specialized staff and equipment requiring managerial and financial resources). However, this under-representation is also the result of a government strategy of “national integration” of the chain. Such a strategy is essential to attract and support nationals in the sector and to increase the latter’s contribution to the wealth, employment and poverty reduction in the country.

731. The potential for the support activities of the MINES cluster to contribute to growth and employment in the Congo thus depends on the effectiveness of the Government’s efforts at implementing a strategy of national integration in this domain. Such a strategy would have even more rapid and substantial effects than in the field of oil activities, where the “entry ticket” is much higher in terms of technology and capital.

BASIC ECONOMIC INFRASTRUCTURE AND SERVICES: A recognized shortage of human resources

732. Here, it concerns the physical infrastructure required for developing the MINES industry, in particular the means of transport – airports, roads, ports (maritime and river), railway lines, pipelines, etc.; and electricity and water supply networks. In that respect, the Congo has made considerable efforts, which have been more pronounced in recent years. However, considerable shortcomings persist, both in the means of transport and in the supply of energy. The outlook is encouraging since the Government has dedicated considerable resources during recent years. These efforts must continue within the scope of this plan.

733. The shortage of human resources – national, and of public and private support services, is all the more worrying for the expansion of the cluster. It concerns:

  • - government structures tasked with developing sectoral policies (Ministry of Mines);

  • - the regulatory agencies and management of State involvement (such as the Société National des Mines du Congo - SNMC), non-existent;

  • - institutions for initial and continuous training (Marien N’Gouabi University and vocational training centers), tasked with providing the industry with technicians, engineers and specialized staff (oil lawyers and economists, engineers and geological technicians, geophysicists specializing in the oil industry (drilling and management of the deposits)), information technologists and automation specialists;

  • - Society of Mining Engineers, Groupement des Professionnels des Mines (GPM) which serve as groups for discussion, exchange and collaboration;

    • - audit and accounting firms, management consultancies (recruitment, training, etc….) such as: NEXT/SCHLUMBERGER, DELOITTE, CAC;

    • - Organizing availability of human resources often existing inside the Congo to service the direct needs of this benchmark industry would be salutary for the development of this cluster.

Governance: a chronic problem of transparency, abilities and effectiveness of government institutions

734. This fundamental issue for the expansion of the sector has already been touched on in the DSRP1. In it, the Government had already identified an imbroglio of governance problems – both for public authorities as well as for private organizations – which are hampering the economic development of the MINES chain.

735. As regards public authority, it concerns: (i) governing institutions – the Minister of Hydrocarbons, the absence of the Société nationale des Mines in the image of the SNPC and of a regulatory agency in the image of the ARAP (Autorité de Régulation de l’AVAL Pétrolier); (ii) poor coordination between ministerial departments; (iii) problems of transparency in the management of mineral resources (information on reserves, exploitation and marketing of minerals, even artisanal, etc.), and in the follow-up and control of production and marketing on the part of the State Mines; (iv) the absence of a mechanism for managing the adverse effects of mining activities on the natural environment and health conditions.

736. The training centers have also experienced problems of human, material and strategic management capacity, which require sustained strengthening. Strengthening national expertise in these areas as well as in the professional associations (consultancies) is a prerequisite for the Congo to be able to face the technological and environmental issues and challenges linked to mining activities.

The Strategies, Programs and Flagship Projects

737. As part of the sectoral strategy and the national development plan, the Government has developed an ambitious program to overcome the constraints previously listed that are curtailing the expansion of the Mines sector. The implementation of this program will make the development of the sector possible and will make it a real driving force for the transformation of the economy, both through its direct contribution to growth and employment and through its contribution to financing the country’s other development programs.

738. The programs include both structuring reforms and investments. They will be developed and deployed according to several strategic axes, notably:

  • As regards the cluster heads: stimulating mineral exploration and boosting mineral production;

  • As regards the “Supports”: backing the support activities, improving their national content and optimizing State revenue;

  • As regards the “infrastructure and other factors of production”: developing the infrastructure, human resources and public support and management services of the sector.

Axis 1: Direct activities of the cluster (cluster head)

Boosting mineral exploration

739. The Government has, by decree, established two new institutions that will be key actors in the management of the sector and that will make it possible to develop the Congo’s geological and mining potential. The first is the Centre de Recherche Géologique et Minière (CRGM) (Geological and Mining Research Centre). It is tasked with conducting research to collect more data to improve knowledge of the subsoil and to develop maps in accordance with international standards. The CRGM will put in place the geological and metallogenic cartography of the Congo by using airborne geophysical and satellite techniques and will contribute to the development of the exploration results in view of the promotion and development of the mining sector. The Government has also established a Bureau d’Expertise, d’Evaluation et de Certification des Substances Minérales Précieuses (Office for the Expertise, Assessment and Certification of Precious Minerals). Its mission is to catalogue the mineral wealth of the country and to organize the certification process to develop and market this wealth.

Boosting mining production

740. The private sector envisages significant investments to boost mining. The main projects include:

- the development of iron production in Zanaga by MPD, in Avima by Coree Mining, in Nabemba by Congo iron and in Mayoko by DMC;

- the development of potash in Mengo by MPC, in Sintoukola by Sintoukola Potash;

- the development of polymetals in BokoSongho/Yangabanza by SOREMI and Mindouli-Mpassa by Lulu.

The construction of local processing units

741. The Government will encourage and provide support to industrialists to ensure the local conversion of the minerals:

  • - Primary processing plants: pelletization and production of DRI owing to the availability of natural gas and electricity;

  • - Secondary processing plants: smelters, refineries;

  • - Tertiary processing plants (improvement): machining, casting (sandcasting, permanent, lost wax, in plaster and in polystyrene mousse), manufacturing workshops for steel products;

742. The Government is examining the option of constructing a new economic zone specially dedicated to steel and metallurgy (“Cité du Métal”).

Axis 2: Supportactivities

743. The Government will launch a national integration plan in the mines sector to promote national content in this sector.

Axis 3: Infrastructure and other factors of production

Basic infrastructure

744. It concerns strengthening the means of transport and the supply of energy and water. This important transverse dimension in the development of the sector is part of a national integrated strategy which is described in detail in Chapter 11 of the document. In the implementation of this vast “pillar” of the national plan, the Government will pay particular attention to the transport and energy infrastructures that most affect the competitiveness of the growth sectors, such as that of the Mines.

The reform of institutional support to the sector

745. The State will set about facilitating and supporting the process of revival and expansion of production and support activities and promoting the development of basic services, in particular institutional reforms, strengthening human resources and improving infrastructure services. In the process, it will take measures to facilitate investment and also to encourage the involvement of nationals, in particular the support and subcontracting activities.

746. Institutional reforms. A Mining Code was already adopted in 2005 and aims to revise mining taxation and to optimize the capitalization of mining income for the country. Diligence must be exercised in its effective implementation. Certain implementing legislation required must be promulgated in order to clarify and strengthen the conditions of supervision and the practice of follow-up and monitoring of the operations, placing the State agencies and other partners at the same level of information.

747. Strengthening the national content. It is recognized that the local content is poor, a true bottleneck to the birth of the sector, to increasing its contribution to the national revenue and to the creation of employment. Awareness must be extended in the knowledge that the local content is the springboard in the transfer of technology.

748. It is therefore essential to strengthen the partnership with the State and foreign enterprises established in the Congo. Legislation and agreements must be signed in order to involve these enterprises in the construction of basic infrastructure to carry out the different projects (energy, hydraulics, transport, etc.), to organize actions to strengthen capacity enabling the transfer of knowledge and technology, and to enable the establishment of companies providing goods and services meeting the requirements and standards of the oil industry. The State is committed to working towards stimulating, setting up and supporting the emergence of SMEs/SMIs, financing micro-projects and promoting cooperatives in several sectors of activity.

749. Strengthening governance of the sector. The Government intends to rationalize its interventions and support to the sector in order to maximize the impact. These efforts are broken down according to three large distinct “missions”, notably the planning activities of the sector, the “regulation” of the sector; and the “marketing” of production on the part of the State.

750. “Strategic planning”. The sectoral ministries concerned have drafted strategic planning documents for the sector, some of which are still in progress. The Government intends to consolidate its work in a “Sectoral Policy Letter (LPS)” and a “Strategic Plan for the development of the Mines”. This will enable it to clarify its orientations, objectives, major financing programs and strategies, including through the State’s budget.

751. Regulation of the sector. This consists of fixing clear rules of competition as well as the terms of functioning of the sector. The projects underway and the application of the texts of the Mining Code, and the strengthening of competition, constitute important elements of this mission.

752. Marketing. It concerns the State’s marketing activities of oil and the Mines and their derivatives and national participation in operational activities. To do so, the Government’s program aims to create the Société Nationale des Mines du Congo (SNMC), which will serve as the national marketing structure.

Strengthening capacity, large-scale skills training

753. It is without doubt the most critical vehicle by means of which the Congolese Government can not only support the private sector in boosting the mines sector, but also ensure strong medium term participation of the Congolese, which will maximize the effects on jobs, income and the reduction of poverty. To do this, several shortcomings identified in qualified labor during sectoral surveys need to be overcome. To this end, the Congolese State is determined to develop an extensive national training program in reputable international schools, of managers and technicians specialized in the various fields of national activity, in particular the Mines, Oil and Gas sectors, as well as other sectors likely to develop clusters favorable to growth, such as the forestry and tourism trades.

754. Within the same perspectives, the Congolese State intends to include the operators in this effort, through incentives for the recruitment of apprentices, on the job training, or through granting merit scholarships for students in nominated establishments. This is a priority action which, without any doubt, will increase the local content and will accelerate the overall process of modernization and industrialization throughout the country.

Protection of heritage and the environment

755. Whilst making a structured effort in respect of dialogue with the private operators of the sector, the State also intends to exercise its royal authority of rationalization of choices in order to reconcile the interests of the operators and those of the country for the growth of resources on the one part, and on the other, those of protecting Congo’s environment and the heritage of its natural wealth. In particular, studies must be conducted to understand the environmental impact of the mining projects.

The Expected Impacts On Growth, Employment and State Revenues

Investment

756. The flagship projects will be the Zanaga and Avima iron projects. The anticipated investments are at least US Dollars 9,756 billion of which US Dollar 4 billion alone will be for Zanaga.

Production and growth

757. Further to the significant investments already stated, mining production will extend across the full duration of the plan, increasing in output to reach its ‘model production’ in the order of 112 million tons in 2016 compared with 45 million tons in 2013. This represents an average annual growth of 38,4% over the period. The macroeconomic simulations (see Chapter 15) indicate that such growth in mining production and its upstream and downstream effects would increase GDP growth by around 5 points.

Employment

758. According to estimates, direct developments in the support sectors will contribute towards creating around 25 000 jobs. Around two thirds will stem from the direct activities of the sector and the remainder from support activities. In other words, the mining sector has the potential to become a great provider of jobs in the modern sector after the State and the forestry sector.

State revenue

759. The average annual revenue derived from the Minerals sectors would increase to US$ 6,25 billion. Around 55% would return to the Congolese State under various forms (production sharing and taxation), being FCFA 1 719 billion.

Table 24.Congo, Annual Mineral Production Per Operator
SOCIETESMINERALSSITEReserves millions TInvest. millions $Emplois DirectsProd Année Croisière (T/an)Démarrage Production
MPDFERZanaga4 0006 0004 00045 000 0002016
CORE MININGFERAvima1 0004 0003 00035 000 0002013
CONGO IRONFERNabeba/ Shanga3192 0001 51820 000 0002014
DMCFERMayoko/ Lekoumou2 6005001 0005 000 0002013
CONGO MININGFERMayoko1 0005002 0105 000 0002013
TOTAL FER8 91913 00011 528110 000 000
MPCPotasseMengo (Kouilou)331 6001 000600 0002014
SINTOUKOLA POTASHPotasseSintoukola (Kouilou)8041 200500600 0002015
SOREMIPolymétauxBoko Songho / Yanga Koumbaza5030012 0002012
LULUPolymétauxMindouli-Mpassa6020 000
TOTAL NON FERREUX8972 8501 8001 232 000
Source: STP/DSCERP - Data from the Ministry of Mines and the private sector
Source: STP/DSCERP - Data from the Ministry of Mines and the private sector
Table 25.Investments, Employment And Revenue
COMPANIESMINERALSSITEProduction in model year (t/yr)Production startPrice in us $/tAnnual revenue ($ Millions/yr)State share cfca Billions/yr
MPDIRONZanaga45 000 0002016502250619
CORE MININGIRONAvima35 000 0002013501750481
CONGO IRONIRONNabcba/ Shanga20 000 0002014501000275
DMCIRONMayoko/ Lekoumau5 000 00020135025069
CONGO MININGIRONMayoko5 000 00020135025069
TOTAL IRON110 000 0005 5001 513
MPCPotashMengo (Kouilou)600 0002014500300,082,5
SINTOUKOLA POTASHPotashSintoukola (Kouilou)600 0002015500300,082,5
SOREMIPolimetalsBoko Songho / Yanga Koumbaza12 0002012500,60,2
LULUPolimetalsMindouli-Mpassa20 000501,00,3
TOTAL1 232 000602165
TOTAL GENERAL6 1021 678

Figure 14.Mining Cluster: Strategy, Key Programs And Projects

8.1.2 The “Agriculture and Agro-Industry” Cluster

The Actors and The Main Activities

760. The cluster head consists of five fields of activity: (i) food crops, (ii) cash crops, (iii) conventional animal husbandry, (iv) non-conventional animal husbandry and (v) fishing and aquaculture. Figure 14 summarizes the main actors operating in each of the sub-sectors of activity.

Figure 15.Outline Of The “Agriculture, Animal Husbandry, Fishing And Aquaculture” Cluster

Source: STP/DSCERP – Data from the Ministry of Agriculture and Livestock, and from the Ministry of Fisheries and Aquaculture

Table 26.Evolution of Agrigultural Products From 2001 to 2010 (Thousands of Tons)
PRODUCTS2001200220032004200520062007200820092010
Cereals
Maire8,99,79,09,29,39,49,510,310,710,9
Rice (Daddv)1,11,11,21,21,11,11,11,31,51,8
other food crops
Plantain bananas73,366,070,174,274,775,076,979,581,482,8
Yams, sweet potato10,410,411,011,411,812,112,512,913,513,8
Potato4,33,63,84,34,34,34,54,75,15,5
Beans3,63,23,43,53,53,53,63,74,14,3
Groundnuts20,521,122,022,322,923,423,924,924,930,1
Manioc tubers739,2786,5878,0932,21 007,41 071,71 140,11 196,31 231,01 243,3
Industrial craps
Cocoa1,01,20,80,80,80,80,70,80,80,7
Coffee0,91,00,70,70,70,70,70,70,70,7
Fruit (modern production)
Pineapple2,32,22,53,03,33,53,84,04,14,3
Mangoes24,026,430,030,032,434,436,337,437,938,3
Avocado6,06,16,36,66,87,07,27,57,87,9
Source: STP/DSCERP DGE Estimates
Source: STP/DSCERP DGE Estimates
Table 27.Evolution of Animal Production From 2004 To 2009 (HEAD)
Products200420052006200720082009
Cattle10 17210 47710 79111 11511 44811 791
Sheep34 45335 48736 55237 64938 77839 941
Goats37 03233 88440 82842 86945 01247 263
Pigs65 54169 01572 67376 52580 58184 852
Poultry350 632369 201432 013479 534532 283590 834
Other6 6376 7706 9057 0437 1847 328
source: STP/DSCERP - National data, DGE estimates
source: STP/DSCERP - National data, DGE estimates
Table 28.Evolution of Fishing Production From 1996 to 2007
YEARPRODUCTION [TONS]Contribution%
Maritime fishingMainland fishingAquacultureTotalMaritime fishingMainland fishingAquaculture
199619 60025 87310645 5794356,760,23
199719 09518 9879938 18150,0149,730,26
199823 96325 45514049 56348,3651,360,28
199920 52025 26819045 97844,6354,960,41
200023 52025 4386649 02447,9851,890,13
200122 72926 1016448 89446,4953,380,13
200222 43329 4946851 99543,1456,720,13
200323 47731 1826954 72842,956,980, 13
200423 89630 3337254 3064455,860,13
200525 86832 S0O8058 44344,2655,60,14
200628 48531 0002159 50647,3752,090,03
200729 82130 1202559 96649,7350,230,04
TOTAL283 412331 7561000616 168---
Average23 61827 64683-45,9953,840,16
Source: STP/DSCERP - FAO data, Department of Information and Statistics on Fishing and Aquaculture, 2009.
Source: STP/DSCERP - FAO data, Department of Information and Statistics on Fishing and Aquaculture, 2009.

Strengths: Large Arable Surface Areas, Good Rainfall and Hydrography

761. The Congo has more than ten million hectares of arable land more than 90% of which is still available. This represents 2,45 ha of arable land per inhabitant. By comparison, and as indicated in Table 4, the “relative availability” of arable land is lower in Cameroon at 0,47 ha per inhabitant, in Rwanda at 0,20 ha per inhabitant and in Burundi at 0,2 ha per inhabitant. On the one hand, this indicates the considerable availability of arable land, but also the low population available to exploit it; which, at first glance, suggests strategies to encourage large industrial planting.

762. Moreover, with its location straddling the equator, the Congo benefits from a geographic location that favors uninterrupted agricultural production throughout the year. Two main basins (The Congo River basin and the Kouilou-Niari River basin) each with a large number of tributaries irrigating the land, thus offering strong potential for halieutic production.

763. Despite these conditions, the Congolese agricultural sector is still underperforming and faces numerous constraints. Indeed, the Congolese agricultural sector still faces a number of constraints which represent a handicap to its productivity, whereas both the national and international markets offer encouraging prospects. These negative results stem from the conjunction of several factors. It concerns in particular: (i) the strong dominance of small-scale traditional farming, (ii) the rural exodus and (iii) the ageing of those active in farming.

Cash and fruit crops

764. The ecology of the Congo is favorable to the production of a great diversity of cash crops. However, poor crop practices, poor mechanization and the lack of inputs contribute to maintaining very low productivity. This results from the country’s strong dependency on food imports.

Cash crops

765. Cocoa, coffee and palm oil crops, once prosperous, have practically been abandoned. This situation is a consequence of the lack of marketing and distribution structures, deficiencies in the transport conditions and the lack of a mechanism enabling producers to benefit more from international prices. Thus, since 2002, the production of cocoa and coffee has stayed below the thousand ton mark. The weakness of the size of the country and the strong concentration of more than two thirds of the population in urban areas, only adds to these difficulties.

766. For this reason, the revival of these sectors will require the promotion of large industrial scale farming that would offer an adequate volume of production and which is stable enough to supply the processing industry and the export of high value added products. It is from this perspective that the Congolese Government has fostered the entry of multinationals from emerging countries in the sector in order to inject the techniques of industrial agriculture in the Congo. To this end, the Government has contracted with the Malaysian company ATAMA Plantations, with a view to the large-scale production of palm oil. An area of 480 000 hectares has been granted to this company whose production will be used for manufacturing bio-fuels. Likewise, the Government has granted, through concession agreements, land to Brazilians as well as to South Africans respectively for the production of manioc and maize, for processing and export.

Conventional animal husbandry

767. Conventional animal husbandry refers to cattle, sheep, goats, pigs and poultry. It is currently practiced in the rural areas. The national Congolese production is estimated at 12 000 head of cattle, 40 000 sheep, 47 000 goats, 85 000 pigs and 600 000 heads of poultry. This production is not sufficient to cover the national requirements. In order to overcome this shortfall, the Government has promoted the establishment of a South African company granting it permission to develop an area of 80 000 hectares. Besides cattle rearing, this company will develop cash and fruit crops.

Non-conventional animal husbandry

768. Guinea fowl, grass cutters and wild boar are increasingly becoming domesticated in the Congo and are in high demand. The modernization of production techniques could assist in meeting the growing demand for meat.

Fishing and aquaculture

769. The fishing and aquaculture sector is also showing poor production largely below demand; even though the Congo River and the Kouilou-Niari River basins offer good prospects for the development of fishing and aquaculture. A project to develop halieutic resources in the Basse Alima zone was put in place for the period,. The project plans to set up the following:

  • - upstream: an industrial hatchery, fishery and aquaculture stations, developing support activities to the fishery and aquaculture operations;

  • - in the middle: industrial processing and conversion activities of halieutic products within proximity of the airport area of Ollombo;

  • - downstream: extra logistics for fishing, aquaculture and piscicultural products.

Figure 16.Summary of the strengths, potentiality and competitiveness of the agricultural sector

The Strategies, Programs and Flagship Projects

770. As part of the sectoral strategy and the national growth strategy for employment and poverty reduction, the Government has developed an ambitious program to promote the expansion of the agricultural sector. The program aims to accelerate the deep transformation of the sector to make it one of the drivers of the diversification and industrialization of the country. In this way, the agricultural sector could strongly contribute to the growth and development of employment, owing to the direct and secondary effects on the other sectors of activity, notably the upstream chemical industry (fertilizers and agricultural inputs) and the downstream food processing industry, as well as the distribution activities.

771. The programs include both structuring reforms and investments. They will be deployed according to several strategic axes, notably:

  • As regards the cluster heads: (i) modernizing small-scale agriculture; and (ii) developing industrial agriculture;

  • As regards the “Supports”: backing the support activities, improving their national content and optimizing State revenue;

  • As regards the “infrastructure and other factors of production”: developing infrastructure, strengthening the management of land resources, developing human capital, as well as strengthening governance in the sector and increasing the steering capacities of the public support services and the management of the sector.

Axis 1: Direct activities of the cluster (cluster head)

Modernization of small-scale agriculture

772. The “modernization of small-scale agriculture” axis is organized into two major programs of activities: (i) direct support to production and (ii) the support activities that come into play either upstream or downstream of production, or then in a permanent manner.

773. Direct support to production refers in particular to the interventions having a direct and immediate impact on production. The measures chosen are: (i) the approach of revival by sector of which the starting point is the formulation of specific strategies, and (ii) the improvement in quality and quantity of the support provided in terms of the technical training of the producers, the supply of inputs, combating the major threats and improving production techniques. To achieve the latter, the Government intends to promote mechanization through targeted support, in order to improve yields, to reduce the laboriousness of work, in such a way that working the land becomes both attractive as well as lucrative for producers.

774. The support activities are the back-up activities enabling the optimization of operational results. The actions planned at this level, within the scope of the NDP, may be divided into two major groups, upstream and downstream. Upstream, the interventions target the strengthening of research and development, improvement in the supply of inputs, equipment and agricultural material, the development of rural engineering activities, as well as strengthening the training and supervisory structures of the producers. Downstream, the strategy aims to promote the development of transport and to strengthen the storage and preservation capacities. It also aims to facilitate the marketing channels in order to help the producers benefit from favorable developments in prices.

Box 8.Program to strengthen the potato sector in cameroon (PRFPT)

The objective of the Support Program to Boost the Potato Sector (PRFPT) owned by the Ministry of Agriculture and Rural Development is to contribute to the growth of the national agricultural and food production and the sustainable improvement in the incomes and living conditions of the rural populations. Its specific objective is to improve the yields that currently do not exceed 15 tons per hectare and in the long term, to support and professionalize 20 groups of seed growers and 2 500 groups of potato producers. The cost of the program is FCFA 6,2 billion and is financed by PPTE funds.

The implementation strategy consists mainly of: (i) supporting the production of certified seed; (ii) supporting the production of potatoes; (iii) forming producer groups; (iv) promoting mechanization through providing soil preparation equipment; (v) promoting off-season cultivation through putting in place irrigation systems in the cultivated land; and (vi) improving marketing through putting in place warehouse and an information system on the markets.

The principles of intervention chosen are: (i) the introduction of the program into each of its 12 “production zones” through a single channel consisting of an umbrella structure of potato producers. This structure which has, among others, the responsibility of the management and perpetuation of the experiences, must remain open to all groups of potato producers; (ii) the participation of the beneficiary groups; (iii) the conclusion of contracts for most of the activities of the program which are implemented with the participation/in association with the various partners, in particular the beneficiary groups, the service providers, the producers’ networks, the micro-financing establishments, etc. These partnerships are formalized through agreements or contracts; (iv) the support is provided exclusively in kind; (v) the value of this support is considered as a revolving fund to be capitalized by the group in order to finance the successive cycles of production.

The funds are paid by the Treasury Department directly into the umbrella Program/Structure joint management accounts held with the microfinance institutions established in the production areas. This enables the timely provision of inputs to the producers (according to the agricultural calendar). The interventions of this Program were effectively launched during the first agricultural season of 2011. In-kind support of a value of around FCFA 550 million were made available to 238 beneficiary groups for the development of 86 ha of seed fields and 102 ha of fields producing potatoes for consumption. The following inputs were acquired and distributed: (i) 172 tons of certified basic seed, 204 tons of certified seed for production; (ii) around 440 tons of base fertilizer, 94 tons of dressing fertilizer, 3,5 tons of pesticides; (iii) 376 sprayers, 25 motor pumps, 19 ploughs and 2 tractors.

The average yield obtained is 20 tons per hectare. At least 1 720 tons of certified potato seed and 2 040 tons of potatoes for consumption that were produced for an overall expected income of FCFA 1 268 million of which FCFA 860 million stems from seed sold at FCFA 500 000 per ton, and FCFA 408 million for potatoes for consumption sold at an average price of FCFA 200 000 per ton.

Source: STP/DSCERP

775. The key actors in this program to strengthen small-scale farming includes the public services (the administrations and their staff, the projects under supervision, the research structures), the partners within the scope of the bilateral and multilateral technical cooperation, the producers themselves, the civil society support organizations and the service providers, notably the suppliers of inputs.

Development of industrial agriculture

776. With the consolidation of peace, the agricultural and halieutic potential is attracting major private foreign investors. In addition, the Government intends to exploit this potential to promote the development of the agro-industrial complexes and to create the conditions for the rapid expansion of the agricultural sector.

777. To do this, partnerships have been established with multinationals. It concerns in particular (i) the South African company “Congo Agriculture” for the establishment of an agro-industrial complex of food and fruit crops as well as cattle rearing, (ii) the Brazilian company BR AFRICA for the production and processing of manioc in the Pool department, (iii)the Malaysian company ATAMA PLANTATIONS for the development of palm oil. These activities will be supported through the accumulated experiences from the Demonstration Center for Agricultural Techniques created thanks to the Congo’s cooperation with China. Moreover, internal efforts are being deployed to consolidate the attractiveness of the sector.

Support for the development of the agricultural sector

778. Strengthening the management of land resources through adopting specific legislation. One of the key factors in the development of the agricultural sector is that of land resources. For this reason, the Government intends to intensify its efforts to improve the management thereof. The actions that will be carried out aim in particular at: (i) the adoption of an agricultural land policy in order to ensure optimal management favorable to the significant investments in this sector whilst still preserving the well-being of the local population, and (ii) soils mapping for better orientation of the development of the sectors according to the natural regional allocation.

779. Improvement in the accessibility to the zones of production and the living conditions in rural areas. To slow down the rural exodus which is handicapping the development of the agricultural sector, the Congolese Government intends to improve living conditions in rural areas by undertaking major work aimed at equipping these areas with basic socio-economic infrastructure (construction of schools and health centers, supply of drinking water, electrification, and sanitation). Moreover, the Government intends to strengthen the activities linked to the accessibility of the areas of production through the construction/rehabilitation of roads and rural paths. In this respect, the Government plans to assess the experience of the “agricultural villages” in order to understand the benefits and to put in place a program to extend it to other regions of the country.

780. Improving the labor supply and strengthening the agricultural labor market. The development of the agricultural sector is accompanied by a positive demand for work and the appearance of specific trades, especially with agro-industry. To be able to meet this demand, the Government will carry out actions aimed at offering training to the following trades: agriculture, stock rearing, fishing and aquaculture. To this end, professional training centers will be built, as well as the opening of sectors specialized in teaching. Moreover, as part of the development of the job market, a special emphasis will be placed on jobs in the agricultural sector.

781. Strengthening governance of the sector and support to the private sector. The Government intends to significantly strengthen governance of the sector in order to support the efforts of the private sector and to improve the profitability of investments. To do this, efforts will be divided into two principle axes, namely: (i) strengthening the capacity of governance of the sectoral administration (the ministries and other government agencies), and (ii) improvement in the general governance in the channels of the sector.

782. “Strategic planning”. The sectoral ministries concerned have prepared strategic planning documents for the sector. The Government intends to consolidate this work in a “Sectoral Policy Letter (LPS)” (Lettre de Politique Sectorielle) and a “Strategic Plan for the Development of the agricultural sector”. These enable the Government to accurately clarify its orientations, objectives, major programs and financing strategies, including through the State’s budget. What is more, the ministries are also part of the Priority Action Programs (PAP) and the program budgets within the scope of the implementation of the CDMT. These innovations will be strengthened with the refinement of the sectoral strategies, in order to improve the strategic planning of the sector.

783. Setting quality and environmental standards. Though the development of the agricultural sector is proving to be of utmost importance for achieving the objectives of growth, employment and poverty reduction, the same applies for the protection of the environment. In this regard, the Government will adopt a regulatory framework to establish the quality and environmental standards. In order to ensure observance of the measures adopted, the sector will acquire suitable human and material resources. The objective is to reconcile the interests of the operators and those of the country to promote the sustained development of the sector, whilst still preserving the environmental heritage. In particular, studies must be carried out in order to understand the environmental impacts of the projects.

The Expected Impacts On Growth, Employment and State Revenues

Production and growth

784. With the reforms invested in and the implementation of the actions contained in the DSCERP, as well as the development of the activities carried out by the multinationals already present, the production of the agricultural sector should show a rapid expansion during the coming years. Economic projections indicate that, on the basis of the anticipated investments in the sector and the implementation of the programs, agricultural production will experience average growth of 11% over the 2012-2016 period. We note that performances of the sector are already well aligned with an average growth rate of 7,3% between 2008 and 2011.

Employment

785. Though the agricultural sector is characterized by low levels of revenue, it remains the largest provider of employment in the rural areas. Indeed, with its low level of mechanization, this makes it a labor-intensive sector. According to ECOM2, agricultural employment represented 35,6% of employment in the Congo in 2011. In view of the anticipated developments, the sector will continue to contribute strongly to the curbing of unemployment in the coming years

Box 1.Congo, government actions promoting agricultural development

For over a decade, the Government has demonstrated its commitment to developing agriculture. To do this, it has put in place several agricultural development projects and has signed agreements with foreign companies that are able to support it in this process.

1. Agricultural development programs and projects

Several programs and projects have been created and implemented, the most important of which are as follows: (i) the Programme National pour la Sécurité Alimentaire (PNSA) (National Food Security Program); (ii) the Projet de Développement et de Réhabilitation des Pistes Rurales (PDARP) (Rural Roads Development and Rehabilitation Program); (iii) the Projet de Développement Rural (PRODER) (Rural Development Program) and (iv) the Projet Création des Nouveaux Villages Agricoles (Project for the Creation of New Agricultural Villages).

The Programme National pour la Sécurité Alimentaire (PNSA). The overall objective of the PNSA is to develop the natural potential of the country in order to alleviate the state of food insecurity and poverty. Its specific objective are: (i) increasing the national agro-pastural and halieutic production through the use of innovative technology and quality inputs; (ii) strengthening the capacities of the actors; (iii) improving the marketing, conversion, storage and preservation of products; (iv) establishing and strengthening of a system for monitoring, early warning and rapid response; (v) improving the income and standard of living of rural producers, in particular that of women and young people; (vi) diversifying the sources of income of rural populations; (vii) guaranteeing the availability of foodstuffs; and (viii) protecting the environment and conserving natural resources.

The Projet de Développement et de Réhabilitation des Pistes Rurales (PDARP). The main objective of this project is to improve agricultural production in the Congo. It is co-financed equally by the World Bank and the Government, for an overall amount of FCFA 20 billion. This project, which had targeted some 600 activities, is currently being adjusted. It concerns in particular reducing the number of activities, the number of agricultural roads to rehabilitate, the number of market infrastructures and the number of micro-projects to be financed.

The Projet de Développement Rural (PRODER). The project is part of the Government’s policy aimed at improving food supplies of the villages and increasing rural incomes. The project is focused on national biological control and research. To this end, several streams of activities are being developed, including: (i) a component for developing crops and farms based on manioc, groundnuts, maize and lowland rice, and (ii) a component for developing animal husbandry (cattle and small ruminants) with the establishment of a self-funding system of distribution of inputs and credit.

1. The “Création des Nouveaux Villages Agricoles” project. Funded by the Congolese Sate for an amount of FCFA 13 billion, this project concerns the development of special villages in order to increase production. By creating the agricultural villages, the Government envisages professionalizing agriculture. The agricultural villages of Knouo, Odziba and Imbouba in the Ignié agricultural area (in Pool) were carried out within the scope of this project. The activities to be developed here are linked to the production of manioc, pig rearing and broiler meat. The State has given each young person in these villages 792 laying hens and the equivalent of two hectares in manioc cuttings. The 40 families selected (among 358 applicants) are living in houses built by the State, with a minimum of town standing. These farmers are not agents of the State but work for themselves.

The Fonds de Soutien à l’Agriculture (FSA). The aim of this fund is to finance farmers, stockbreeders and fishermen on the basis of viable projects. The FSA received an amount of FCFA 4 billion (approximately US$ 8 million) to finance its activities during 2010. This funding has made it possible to support five priority sectors: poultry farming, pig rearing, fishing, fish-farming and the vegetable sector.

2. Cooperation agreements

In order to accelerate the development of agricultural production, the Government has strengthened its cooperation with other countries, notably China, and has concluded several partnership agreements with multinationals. Besides the financial lever, the objective is to benefit from the expertise and advanced technologies of these partners. Within this scope, partnerships have been established with South African, Brazilian and Malaysian companies.

The partnership with the South African company “Congo Agriculture”. The Congolese State has donated 80 000 ha of land to “Congo Agriculture”, a company established by South African farmers from Agri SA, following the agreement signed on 10 march 2011 in Pointe-Noire. This land situated in the Niair (63 000 ha) and Bouenza (17 000 ha) departments, has been set aside for the establishment of an agro-industrial complex for food crops and-fruit growing, as well as cattle rearing.

The partnership with the Brazilian company BR AFRICA. BR Africa signed a partnership agreement with the Government on 5 November 2010, authorizing its establishment in the Congo under the label BR Africa Congo. The agreement provided for capital distribution amongst the shareholders as follows: the Congolese State (49%) and the Brazilians (51%). This company will produce manioc and convert and market the products derived from the agro-industrial complex that will be built in the Pool department, between Imbouba and Mbé. The area set aside for manioc production is 19 500 ha.

The partnership with the Malaysian company ATAMA PLANTATIONS: In December 2010, the Congolese Government donated 470 000 ha of land located between Makoua and Mokeko to the Malaysian company ATAMA PLANTATIONS. This company intends to produce 9 000 tons of palm oil.

Agricultural cooperation between the Congo and China. Cooperation with the Chinese is manifested through the creation of the Centre de Démonstration des Techniques Agricoles (Demonstration Centre for Agricultural Techniques) located on the outskirts of Brazzaville. This center conducts experiments aimed at supplying the country with new high-yield varieties of fruit and vegetables adapted to the ecology of the country.

Source: STP/DSCERP

Figure 17.Agricultural Cluster: Strategy, Programs And Key Projects

Table 29.Developpement Of The Maize Value Chain
Ministries concernedActions or projects
Economy, Planning, Town Planning and IntegrationAllocation and assessment of investments in the value chain
Industrial Development and Promotion of the Private SectorEstablishment of the corn mill industry
Agriculture and LivestockDeveloping areas to be cultivated (mechanization)

Simplifying the farming techniques adapted for maize

Diffusion of the farming techniques adapted for maize
Land Affairs and Public DomainDemarcation of the area for exploitation and expropriation
EnvironmentDevelopment of a program for waste recycling
Trade and SuppliesCreation of maize storage centers (silos) for marketing
Higher Education and Professional Training, Skills trainingTraining in the trades of mechanization, simplification of agricultural work, the maize industry, storage, preservation and marketing of maize.
Source: STP/DSCERP - Data from the Ministry of Agriculture and Livestock
Source: STP/DSCERP - Data from the Ministry of Agriculture and Livestock
Table 30.Development of the manioc industry value chain
Ministries concernedActions or projects
Economy, Planning, Town Planning and IntegrationAllocation and assessment of investments in the value chain
Industrial Development and Promotion of the Private SectorEstablishment of the manioc industry for manioc flour and starch production

Establishment of the starch production industry



Establishment of the cattle feed production industry

National and international technical partnership agreements
Agriculture and LivestockEstablishment of the manioc industry for manioc flour and starch production



Creation of healthy nurseries (plant material)

Support for the mechanization of manioc farming

Simplifying the farming techniques adapted for maize
Land Affairs and Public DomainDemarcation of the area for exploitation and expropriation
Trade and Supplies



Higher Education and Professional Training, Skills Training
Supply of water and electricity to the site

Establishment of a marketing network for products in the manioc value chain

Training in the trades of mechanization, simplification of agricultural work, the manioc industry, storage, preservation and marketing of maize
Source: STP/DSCERP - Data from the Ministry of Agriculture and Livestock
Source: STP/DSCERP - Data from the Ministry of Agriculture and Livestock
Table 31.Development of the palm oil value chain
Ministries concernedActions or projects
Economy, Planning, Town Planning and IntegrationAllocation and assessment of investments in the value chain
Industrial Development and Promotion of the Private SectorEstablishment of the palm oil and biofuel industry Establishment of the cabbage oil industry Establishment of the saponification industry
AgricultureCreation of palm oil nurseries

Developing areas to be cultivated

Simplifying the palm oil farming techniques

Creation of a papain production plant and a factory for the manufacture of biodegradable packaging

Creation of a support unit for mechanization
Land Affairs and Public DomainDemarcation of the area for exploitation and expropriation
EnvironmentWaste recycling to protect the site and its surrounding areas from pollution
Trade and SuppliesProduct distribution on local and foreign markets (export) Establishing market regulatory mechanisms
Higher Education and Professional Training, Skills TrainingTraining in the trades of mechanization and simplifying agricultural work

Development and implementation of palm oil training programs
Source: STP/DSCERP - Data from the Ministry of Agriculture and Livestock
Source: STP/DSCERP - Data from the Ministry of Agriculture and Livestock
Table 32.Development of the fisheries value chain
Ministries concernedActions or projects
Economy, Planning, Town Planning and IntegrationAllocation and assessment of investments in the value chain
Industrial Development and Promotion of the Private SectorCreation of fish filleting plants Creation of industrial fishing hatcheries for fish farming and aquaculture development

Creation of industrial fishing hatcheries for restocking the country’s rivers

Creation of fish-farming fattening stations

Creation of industrial fish processing and conversion plants





Setting up laboratories for quality control of fish destined for export

Creation of an industrial unit for the salt-curing and smoking of fish
Fishing and AquacultureCreation of fish-farming fattening stations

Human resource training



Creation of industrial plants for the processing and conversion of fish

Setting up laboratories for quality control of fish destined for export
Trade and SuppliesCreation of refrigerated warehouses

Setting up laboratories for quality control of fish destined for export

Support for laboratory research and experiments



Conducting analyses in aquatic environments
TransportProviding the CFCO with refrigerated vans
Higher Education and Professional Training, Skills TrainingTraining in fish farming and aquaculture, construction of ponds and zootechnique

Fish capturing techniques

Training in the fish processing industry trades

Training in the conservation and marketing of fish
Source: STP/DSCERP – Data from the Ministry of Fisheries and Aquaculture
Source: STP/DSCERP – Data from the Ministry of Fisheries and Aquaculture

The “Forestry and Timber Industry” Cluster

786. For a long time, the forestry sector was the driving force of the Congolese economy. The exploitation of forests constituted the main source of foreign currency up until 1974. Nowadays, it contributes close to 10% of the GDP10. Between 2005 and 2008, the sector represented 13% of exports on average, and more than 60% of the non-oil export earnings. In 2010, the forestry sector was still in second place in terms of contribution to the GDP (5,6%), to exports (10%) and to employment. In 2010, this sector employed around 16 000 people, of which 1 100 were directly employed and 5 000 of which were employed in related activities.

787. Nevertheless, the country is not generating sufficient income from its forests, on account of, until now, an insufficient conversion rate and poor control of the value chain. Until now, most of the timber has been exported in the form of logs. Exploitation concerns a very limited number of species, around ten or so are recognized for their market value, including OKOUME, SAPELLI, MOABI, PADOUK, SIPO, AKOUMINATA and WENGE. The first two are the most exploited.

788. After strong expansion between 2001 and 2003, forestry production has also experienced a noticeable turndown since 2004 (0,3%), particularly due to the drop in the production of logs (-2%). This was offset by the increase in the production of semi-finished wood (+10%). Several factors explain this performance below expectation, in particular the deterioration of the country’s transport infrastructure making the shipment of products to the Pointe Noire port difficult. For this reason, companies situated mainly in the northern part of the country, transport their production to the port of Doula via Cameroonian roads. This operation involves a transport surcharge, since the distance is greater and the fuel price in Cameroon is higher than in the Congo – where it is subsidized.

789. The consequences of the international economic and financial crisis that took place from the third quarter of 2007, were as follows: (i) a cut in the orders from the main clients, (ii) the consequent drop in production, (iii) a decline in activities in the forestry sector, (iv) a reduction in forestry revenues, (v) the impossibility of respecting the contractual agreements with the State and, (vi) the reduction or complete standstill of investments, and (vii) resorting to staff cutbacks and technical leave.

790. In 2000, the Congolese government promulgated a new Forestry Code requiring foresters to process at least 85% of production, without going as far as a measure involving the total prohibition of the export of logs, as is the case of neighboring Gabon. This could lead to a justified need to redefine the strategy for the sector.

791. Generally speaking, this redirecting is necessary for all the tropical forest timber sectors, from the point of view of climate change and the need to protect them. It concerns reconciling two different sets of problems but henceforth linked: (i) the protection of the major activity of “carbon sinks” of the tropical forests, (ii) the rights of the country and its people to exploit the resources of the forest and more specifically, subtropical exploitation and exportation activities in the global timber and construction materials markets. Such reconciliation is only possible with the optimal organization of the exploitation of tropical forests, respectful of the principles of sustainable and efficient development against the practices of massive deforestation, degradation and the illegal trade in timber, in fauna and in other non-ligneous forest products.

The Actors and The Key Products

Figure 17.Production of forestry products

Source: ST/DSCERP – Data from the Ministry of Forest Economy and Environment

Figure 18.Overall View Of The Timber Industry

Source: ST/DSCERP-Données du Ministère de l’Economie Forestière et de l’Environnement

Table 33.Distribution of Surface Areas According to the Degree of Development
No.FORESTSurface Area (ha)% of the total
1LOPOLA195 5102%
2LOUNDOUGOU TOUKOULAKA571 1004%
3MOKABI586 3305%
4MISSA243 3762%
5KABO296 0002%
6NGOMBE1 159 6439%
7POKOLA452 2004%
TOTAL CERTIFIED3 504 15927%
UNDER DEVELOPMENT6 015 53147%
NON-DEVELOPED3 243 23625%
TOTAL EXPLOITED12 762 926100%
Source: STP/DSCERP- Data from the Ministry of Forest Economy and Environment
Source: STP/DSCERP- Data from the Ministry of Forest Economy and Environment

Figure 19.Distribution of surface areas according to the degree of development

Source: STP/DSCERP

Strengths: Considerable Wealth, But Under-Developed

792. The Congo has abundant fauna and flora consisting of, besides its 6 500 plant species, 200 mammal species, more than 700 bird species, 45 reptile species and more than 632 insect species. The exploitation of non-ligneous products (Gnetum, marantaceae, liana, rattan, cortex, honey, etc.) still falls under the informal domain. The exploitation of this forest, and generally of tropical forests, only targets a limited number of widely recognized forest species on the foreign market. Conversely, the temperate forests are managed on the basis of the knowledge of the resource, the fruits of the exhaustive inventory making it possible to determine the wealth and value of the forest and as a result, that of the exploitation permits.

793. In so doing, the exploitation of forests in the Congo, like in other countries in Central Africa, practices a type of skimming of the forest, leaving most of its ligneous wealth unexploited (between 200 and 300 species), whose value for that matter, remains largely unknown. The timber industry, in addition to its limited size, is focused on the first-stage processing (sawing, cutting, veneer-making, plywood, etc.) exported on the international market. It implies large groups with permits covering vast forestry areas, committed to a process of sustainable development.

794. Taking into account the seriousness of this crisis on the Congolese forest economy, a consultation meeting grouping together the direct or indirect actors implicated in the development of the forestry/timber sector, as well as the employers’ unions (Uni-Congo, Uni-Bois) was held, to discuss the measures to be taken in order to mitigate the effects of the crisis. Congo’s forestry code that was promulgated in 2000 has put sustainable management of the forest-timber sector on the right track, with a clear orientation towards the sustainable development of logging operations, the industrialization of the timber sector and the conservation and protection of the biodiversity of the ecosystems. Yet, despite the results achieved in the sustainable development of logging operations and the creation of protected areas (15 national parks), growth in industrial timber processing is still well below the objective fixed by the Forestry Code (85% local processing).

795. Forestry development constitutes one of the priority axes and is progressing in most of the forestry concessions on the basis of multi-resource inventories and ecological and socioeconomic studies within the scope of a partnership between the administration in charge of forestry, the forestry companies and the development partners (donors, civil society organizations).

The situation of forestry development

796. Congolese forestry development, which concerns a total of 12,8 million hectares, demonstrates a variety of situations as indicated in Figure 17.

797. Sustainable development with full approval. We note that 3 504 159 million ha (being 27% of the total) surface area of the forestry concessions, are currently managed by several major groups including CIB, IFO and MOKABI, and represent sustainable development with full approval. This development has successfully embarked on the process of international recognition and certification. The development plans of the MOKABI, LOUNDOUGOU and TOUKOULAKA Unités Forestières d’Aménagement were adopted in 2010, as were the basic planning documents of the UFA MISSA during the first quarter of 2011.

798. Sustainable development with provisional approval. There are 6 015 531 million ha (being 47% of the total), involved in sustainable development process with provisional approval. There are still around 3 243 246 million ha (being 25% of the total) linked to permits that have not initiated the slightest process for the management of their forestry development. These are generally small national permit holders but who do not have the financial standing to subscribe to a management process. In this batch, we find all forms of permit grants that until now, have not been controlled, have been executed without clear rules governing their allocation and without any guarantee or transparency. This type of development has progressively become an obstacle to the process of sustainable management and that of the local processing of timber.

Strengths, Weaknesses, Opportunities and Threats

799. The Figure below provides a summary of the Strengths, Weaknesses, Opportunities and Threats associated with the forest-timber sector. This summary analysis makes it possible to strategically place the timber and forestry products sector of the Congo on the national, regional and international markets.

Figure 20.Main Strengths And Weaknesses Of Wood And Forest Economy Sector

Source: ST/DSCERP et INT-DEC, Données du Ministère de l’Economie Forestière et de l’Environnement

The Strategies, Programs and Flagship Projects

800. “To make the Congo one of the global leaders in certified tropical wood, carried by an industry that fully enhances the resource and which is exploited from a forest under sustainable management, playing its role in full of Carbon Sinks and a biodiversity sanctuary, at the service of humanity”. Such is the vision that underpins the development of the “timber sector” in the Congo.

801. The implementation of this vision will be through improved governance of the forest, the reorganization of forestry development, as well as the complete review of the organization of the timber processing sectors through industrial poles, making it possible to provide the actors with shared infrastructure and services. There is, in short, the need for improved management of the costs of logistics services (in particular the cost of transport and port freight).

802. From the point of view of the analysis of the environmental trends of tropical forests and the evolution of timber markets, the government has retained major strategic guidelines in line with the “Chemin d’Avenir” (“Future Path”) vision. These will enable the alignment of the operational plan for their implementation. These strategic guidelines may be broken down according to the several major programs, including (i) knowledge on the wealth of the Congolese forestry domain; (ii) generalization of the sustainable management of the forest to all development sites; (iii) the development and the implementation of an industrial strategy organized around the “timber and forestry industry cluster”.

Developing knowledge on the forest and its wealth

803. It concerns a better understanding of the forest and its diversity of wealth, in particular that which is exploitable with, on the one hand: (i) the wealth of species, their industrial value and the interest in their development; and (ii) the wealth in non-wood forest products with their properties, active principles and their significance.

804. Improved knowledge of the animal and plant biodiversity is also necessary. To do this, it will be necessary to conduct an exhaustive inventory of the forest’s resources, by using modern geomatic methods and satellite observations making it possible to follow the evolution of the forest and to conduct a soil inventory using tracking tools (GPS). In this regard, the PAGEF project will make it possible to conduct an exhaustive soil inventory, as well as to take stock of the reality of the different forms of exploitation of the forest, the forest populations, the forest enterprises and the activities that have been carried out there. The objective is to determine the economic value of the forest (in other words the number and the value of ligneous species, of the Non-Wood Forest Products (NWFP) and of the fauna and flora. The economic value of the resources is added to their value as carbon sinks ensured through sustainable management.

Generalizing sustainable development of the forest to all forest development

805. In this regard, the Programme de Mise à Niveau (PMN) with a fund of US$ 15 billion, the program dedicated to small forest permits (PAPPF 2), as well as various other sources of future aid, will make it possible to support the effort to generalize the sustainable management of small forest permits held, for the most part, by Congolese nationals. This component of the program deserves special attention as it enables the integration of the Congolese people living off small forest exploitation, into the development of the sector.

Implementing a true industrial strategy to manage the sector

806. This industrial strategy is aimed at extending timber processing projects to all forest exploitation. The success of the implementation of this industrial strategy will be through a voluntary strategy for the development of a national and regional market, based on the strong demand for accommodation in Africa (growing urbanization, development of the middle class, development of social housing), and thus an increasing demand for timber products.

807. The industrial strategy of the timber sector aims at:

  • - increasing the recovery rate of 20% to 30% (material output) of felled timber today, to a minimum recovery rate of 85%. This will mean enhancing the full value of waste from forest development (forest residue, waste from wood chips);

  • - creating a cluster of small, medium and micro enterprises, self-employment and revenue in the collection and development of waste from forest exploitation (pruning, hauling, fagots and grinding of forest waste, collecting and press molding of wood chips). The wood shavings will be used in particular for the production of electricity and heat through cogeneration, for the production of a wide variety of new construction materials, combining the wood shavings with clay to produce geo-concrete resistant bricks, as well as the production of more sophisticated materials;

  • - owing to the availability of a variety of construction materials, developing wooden assembly kits incorporating different materials enabling the mass-production of houses. In this way, a cluster is developing running from the large export companies and small to medium enterprises on the international market and operating in the first, second and third processing phases;

  • - Developing a similar offer through a partnership with manufacturers and countries with an excellent timber culture and a mastery of the technologies and engineering of the materials, developing “everything” from timber, notably the waste in the production of the different materials. This generation of construction materials, ensures all the advantages of wood (thermal comfort, resorption of humidity, durability) and makes it possible to avoid its disadvantages (termites, humidity and warping of non-dried wood used in general). The contribution of polymers from petro chemistry, will be deciding in the design of these new materials.

808. Such an offer will bring sustainable solutions to the structural problem of housing, characterized by a chronic shortage in supply. The offer to develop under a Congolese label will be the fruit of a powerful partnership with forest nations mastering the latest technologies in construction materials and who have a long culture in forest development and in “timber materials”. Its aim to extend across the Congolese national market and the regional market, which is experiencing a rising demand for housing, construction materials and furniture.

809. The Government plans to better organize this sizeable potential demand to facilitate access to housing. In this regard, it must strengthen the following policies: urban development, cadastral policy, making land available to developers and housing cooperatives, the development of land (VRD, installation of drinking water supply networks, sanitation).

Flagship actions for the development of the forest economy

810. To drive and acetate the transformation of the forest economy, the Government plans to implement an extensive priority program for the period 2012-2016. The program is still being prepared with the participation of the World Bank. The main actions envisaged are listed in the table below.

Table 34.Main development programs and projects of the forest economy
AxisProgramsProjects
Improve the institutional and regulatory framework1. Strengthen the institutional and regulatory framework1. Creation of the National Resources Agency of the CONGO (agency for the coordination of timber processing activities)
2. Development and adoption of a guiding outline for the Industrialization of the timber sector
3. Putting in place a co-management policy with people living along the rivers and the private partners
1. Development of the institutional mechanisms for access to the timber markets4. Support of the FLEGT initiative
5. Access to the major markets
Create the industrial and logistics infrastructure of the timber sector2. Develop industrial infrastructure for timber6. Creation of Industrial timber domains
7. Creation of new specialized ZES for timber
3. Establishment of adapted port infrastructure8. Development of areas and facilities to export processed timber products within the scope of the Brazzaville and Polnte-Noir port extension project
9. Setting up export platforms for processed timber products, within the scope of the development of the Pointe-Noire deep-water port, the Brazzaville river ports and others
Reinforcer support of the private sector4. Accelerate timber processing through strengthening enterprises, their organization and their visibility10. Updating the timber processing sector (pilot project for an overall update of the sectors of economic diversification). Development aid to the SME/SMIs in the commercial sector of artisanal timber
11. Strengthening the professional timber organizations and public-private dialogue
5. Updating the economic sectors of forestry development12. Improvement of the PFNL and the by-products of forestry development
6. Promotion of timber from the CONGO13. Promoting a national and regional market for timber from the Congo
14. Development aid to the construction of wooden homes
Industrial carbonization
15. International promotion
Developing professional training7. Training and insertion of the “timber” sector in the Income-generating activities16. Creation of the Centre Supérieur des métiers de fa foret et du bais
17. Establishing secondary training centers for trades in forestry and timber
18. Creation of the “Service Platforms” (PFS) for insertion in the employment and Income-generating activities In the “timber” sector
Strengthening support for sustainable development and national reforestation, strengthening the development of production forests8. Inventories of forestry resources19. Evaluation of the tree and forest resources
20. Digital, multispectral and three-dimensional aerial imagery for monitoring the management and conservation of the forests
9. Development of production forests21. Support for sustainable management of Congolese forests
22. Development of the national criteria and indicators for the sustainable development of Congolese forests
23. Development of the Brazzaville Patte d’Oie forestry reserve
10. Support to organizations under supervision24. National reforestation department
25. National center for inventories and the development of resources
26. Congolese agency for fauna and protected areas
27. Department responsible for the control afforest products destined for export
11. National deforestation Program (PNAR)28. National Reforestation Program (PNAR)
6 Conservation of biodiversity and the fauna sector12. Conservation of biodiversity29. Strengthening the operational capacity of the units for monitoring and the anti-poaching fight
13. Development of parks and protected areas30. Sustainable management of protected areas and fauna reserves
14. Opening of zoos31. Opening of a park on the outskirts of Brazzaville
32, Development of the Brazzaville botanical garden and zoo
Source: STP/DSCERP in the PAP of the Ministry of Forest Economy and Environment
Source: STP/DSCERP in the PAP of the Ministry of Forest Economy and Environment

The Expected Impacts On Growth, Employment and State Revenues

Contribution to growth

811. The implementation of programs for the diversification of the forest economy cluster will contribute to increasing its contribution to the growth of national revenue and increasing employment. According to macro-economic projections, with the expected volume of investment and the outlook for sustained progress of international timber prices, the growth of the sector would increase from -7,8% as an annual average from 2008-2011, to 10,5% over the 2012-2016 period, with knock-on effects in the other sectors.

Contribution to the creation of employment

812. The macroeconomic projections indicate that, with the conservative assumption of a constant productivity of work, employment in the forestry sector should increase significantly. Over and above this direct effect, we also anticipate strong improvement in the quality of jobs created and their remuneration, in particular in the downstream industrial sectors.

Contribution to State revenue

813. On the assumption of increased tax revenue and sustained growth of the sector, an increase in the share of revenue from this sector as part of the total State revenue, is anticipated. Simulations indicate that the forestry sector and the overall GDP would increase at the same rate overall. Likewise, the efforts aimed at collecting the resources generated by this branch of activities, would enable an increase in the contribution of the sector to the State revenue.

Table 35.Development of the Value Chain for Timber Processing
Ministries concernedActions or projects
Economy, Planning, Town Planning and IntegrationAllocation and assessment of investments in the value chain
Industrial Development and Promotion of the Private SectorCreation of the timber seasoning industry to improve the quality of the country’s timber products
Forest Economy and Sustainable DevelopmentMonitoring the UFAs for perennial development of forestry resources;

Establishment of village nurseries

Development of the national afforestation program
Land Affairs and Public DomainDemarcation of the area for exploitation and expropriation
Higher Education and Professional Training, Skills TrainingProfessional training in the timber and timber industry trades





Centre d’Entraînement de Formation et d’Apprentissage (CEFA) for the timber trades, according to the formula - in-service training in the work environment

Training program for technicians and engineers in further processing of tropical timber
Source: STP/DSCERP - Data from the Ministry of Forestry and Environment
Source: STP/DSCERP - Data from the Ministry of Forestry and Environment

8.2 The “Buildings and Construction Materials” Cluster

Actors and Key Products

814. The construction industry regroups all the activities linked to construction and to the management of civil engineering works. The heart of the activity runs from the construction of housing and projects in the property trade professions, including the production and distribution of construction equipment and materials. This nucleus is supported by various activities and basic economic infrastructure completing the overall thread of the cluster.

815. As indicated in the figure below, the construction cluster includes: (i) the main construction, rehabilitation, maintenance and demolition activities upstream of the production and distribution of construction materials, and downstream – the property development promotion (cluster head), (ii) the support activities, and (iii) infrastructure and other factors of production.

Figure 21.Overview Of The Construction Cluster

816. The cluster head of the construction industry comprises the following activities: (i) construction, rehabilitation, maintenance or demolition of various structures: housing, service buildings, transport infrastructure, industrial structures, agricultural structures; (ii) production and distribution of equipment and construction materials: enhancing the value of the materials, the materials industry, distribution of construction products; (iii) property development promotion: sale/lease of property, interior design, carpentry, gardening.

817. The support activities are mainly linked to the following operations: (i) project ownership by the administrations (Ministries and other public institutions) and individuals; (ii) project ownership by the Bureau d’études techniques (BET); (iii) transport of construction material and equipment; (iv) architecture design; (v) management of real estate agencies and companies and (vi) management of property heritage and State property.

818. The transverse factors of competitiveness upon which the activities of the construction industry cluster head rest, may be divided into four groups: (i) basic infrastructure: site development (roads, water-sanitation, electricity, telephone), development of subdivision projects, land reform to facilitate access to land, protection of the environment, specification of the quarry production areas and the installation of factories; (ii) human resources: training and research in the fields of building, carpentry, topography, civil engineering, urban engineering, architecture, rural engineering; (iii) the private sector: organization of enterprises and the BET, funding the enterprises and the BET, regulations concerning competition and taxation; (iv) governance of the sector: administration, regulation, legislation, standardization.

819. The main actors involved in the construction industry activities may also be divided according to three branches of activities.

820. The main participants in the activities of the cluster head are:

  • - the administration: Ministries in charge of the following sectors: Public Works, Construction, Transport, Energy, Hydraulics, Mines, Industry, Trade, Agriculture, Environment;

  • - companies and individuals: construction and project management companies (CFCO, PAPN, PABPS, SNE, etc.), hoteliers, manufacturers, farmers, individuals;

  • - the companies that will carry out the BTP projects;

  • - the consulting and auditing firms in respect of the BTP projects;

  • - quarry developers;

  • - equipment and material haulers;

  • - hardware dealers;

  • - civil engineering machinery and equipment rental companies;

  • - material manufacturers (cement, bricks, tiles, roof tiles, floor tiles, steel reinforcement, sheet metal, window panes, pipes, sanitary ware, planks, laths, rafters, plywood, paneling, laminated wood, lathes, wheelbarrows, etc.);

  • - real estate agencies;

  • - furniture manufacturers;

  • - Interior designers and gardeners.

821. As regards the support activities, the main participants are:

  • - the administration: all the Ministries and institutions (for the project ownership); Ministries of Technical Education and Higher Education, Ministries of Public Works, Construction and Town Planning; Ministry of Environment, Ministry of Finance;

  • - companies and individuals: construction and project management companies (CFCO, PAPN, PABPS, SNE, etc.), hoteliers, manufacturers, farmers, individuals;

  • - the companies that will carry out the BTP projects;

  • - the consulting and auditing firms in respect of the BTP projects;

822. As regards the basic economic infrastructure, the main participants are:

  • - the administration: all the Ministries and institutions (for the project ownership), Ministries of the following sectors: Public Works, Construction, Town Planning, Transport, Energy, Hydraulics, Land Affairs, Urban Planning, Mines, Industry, Environment, Technical Education, Higher Education, Environment, Finance, Councils and City Councils;

  • - the companies that will carry out the VRD projects;

  • - the consulting and auditing firms in respect of the VRD projects;

  • - the solar energy manufacturing and installation companies.

Strengths: A Market Boosted By Major Infrastructural Programs

823. The Congo has several assets for developing the branches of this sector of activities in accordance with an integrated approach. Indeed, the construction industry currently benefits from a climate that is favorable to its development, notably due to:

  • - the policy of modernization of social housing in the country;

  • - the policies concerning major transport infrastructure projects (roads, bridges, railway lines, ports, airports) in the Congo, in the DRC and throughout the entire Central African sub-region (Cameroon, CAR, Gabon, Equatorial Guinea, Chad);

  • - the major construction programs for the production and transport of energy, water and sanitation (hydroelectric dams, thermal power plants, electrical power lines, agricultural irrigation pipes) to the Congo and to the entire sub-region.

824. These particularly enticing prospects in terms of demand are nonetheless marred by the persistence of considerable constraints affecting all components of the sector. Overall, the construction industry is still plagued by: (i) an insufficiency in the supply of construction projects; (ii) uncertainty with respect to the quality of construction; and (iii) deficient organization of the sector.

825. The analyses make it possible to group the constraints into two categories, as indicated in the table below. Overcoming this vicious circle of problems, one as crucial as the other, represents one of the major challenges that the Congolese government plans to meet within the framework of the PND.

Figure 21.Causes of the major problems in the construction indusry

Source: STP/DSCERP – Data from the BTP Ministry and the Ministry of Construction and Housing

The Strategies, Programs and Flagship Projects

826. The Congo’s strategy to meet the challenges of the development of the construction industry consists of two major axes: (i) strengthening the performance of the construction industry; (ii) developing human resources in the BTP sector; and (iii) developing the capacity and competitiveness of the BTP private sector.

Strengthening the performance of the construction industry

827. Achieving this objective will be carried out through the implementation of three programs: (i) growth, diversification and reduction in the prices of construction materials; (ii) improvement in the building stock; and (iii) improvement in the development of land available for construction.

828. Growth, diversification and reduction in the price of construction materials: the program for the growth, diversification and reduction in the price of construction materials is based on promoting the local production of construction materials and facilitating the supply of material and equipment. It is a question of lowering prices through increasing the offer of construction equipment and materials across the country.

829. Improving the building stock: improvement in the building stock is an extensive program of construction, rehabilitation and maintenance of various structures that can raise the production of construction materials and improve the living conditions of the people. The structures concerned extend from social housing to agricultural structures through to service structures (offices, hotels, hospitals, school and university establishments), transport infrastructure (roads, bridges, railway lines, ports, airports) and industrial equipment (dams, thermal power plants, electrical power lines, processing plants for metal, wood and agricultural products, etc.).

830. Improvement and development of land for construction: Here it concerns acquiring and preparing the area for construction. As such, the creation of subdivisions in Brazzaville, Pointe-Noire and in the secondary towns will constitute the keystone for the success of this program. The development of the sites divided by roads and various networks (VRD) will also form a key aspect of the program.

Developing human resources in the BTP sector

831. Developing human resources in the BTP sector is a priority for supporting the programs for the promotion of the construction industry. This will be conducted through two major programs: (i) strengthening training in the BTP professions, and (ii) fostering respect for the rules in use.

832. Strengthening training in the BTP professions: Here it concerns improving the training system, in particular through the creation of technical schools specialized in construction and through the creation of an Institut Supérieur de Travaux Publics (ISTP). It will also concern optimizing the use of human resources through improving the conditions governing the civil engineering profession and raising salary levels in the BTP sector.

833. Promoting respect for the rules in use: This fostering of the respect for the rules in use will be through strengthening project ownership, project management and the rules of construction and town planning. It will be a question of revising all the legislation on the subject in order to tailor it towards more strict control of construction in the Republic of the Congo.

Developing capacity and competitiveness with the BTP private sector

834. To complete this arsenal of measures to promote the construction industry, it will be necessary to make the BTP private sector in the Congo competitive. To this end, two programs are envisaged, namely: (i) strengthening the organization and regulation of the construction sector, and (ii) promoting the BTP private sector.

835. Strengthening the organization and regulation of the construction sector: This will be based on the socioprofessional organization of the actors and improving governance of the construction sector. In particular, it will concern the adoption of a framework law on the construction profession (engineer, architect, technician, project owner, companies responsible for executing the work), to create a platform for professional dialogue between public and private, and the reorganization within the administration of the technical execution, control and monitoring units.

836. Promoting the BTP private sector: The authorities intend to promote the BTP companies and Bureaux d’Etudes Techniques (BET) through:

  • - promoting the activities of real estate brokerage (strengthening the legal framework governing the real estate agent profession; revision/adoption of the regulations governing joint-ownership of property);

  • - making available civil engineering equipment through the creation of the Agence Congolaise de Location de Matériels de Construction (ACLOMAC) and the creation of a Fonds d’Equipement de Génie Civil (FEGC);

  • - and the development of the infrastructure of local SMEs (redrafting the provisions for the award of public procurement contracts in favor of local SMEs; facilitation of the payment of advances to facilitate the start-up of SMEs in the BTP sector; facilitation of bank guarantees and securities to SMEs in the BTP sector.

Flagship actions for the development of the construction industry

837. To conduct the programs retained in favor of the development of the construction industry in the Congo, the Government intends to implement several specific actions, of which the key ones include:

  • - promoting the local production of construction materials;

  • - the construction and rehabilitation of social housing;

  • - the construction and rehabilitation of industrial structures;

  • - the creation of urban developments;

  • - the development of allotted land;

  • - improvement in the system of training and qualification of human resources;

  • - strengthening project ownership and project management;

  • - strengthening the construction and town planning laws;

  • - improving the socioprofessional organization of the actors;

  • - promoting the activities of property brokerage;

  • - making available civil engineering equipment;

  • - Developing the infrastructure of local SMEs.

838. These actions will be carried out by public and/or private actors through concrete projects of which the key ones are mentioned in the table below.

Expected Impacts On Growth, Employment and State Revenues

839. It is the growing demand for infrastructure facilities that is creating employment in the construction industry. The variety and the dispersal of this demand (household, organizations, public or private companies, public administrations), makes any exhaustive quantitative or qualitative assessment difficult. Nonetheless, the estimate of the largest jobs in construction (housing, service buildings, transport facilities) forecasts a minimum of 77 600 direct jobs that could be created annually in these branches al one over the 2012-2016 period. Added to this, of course, are the jobs created through the activities of production and distribution of construction equipment and materials, as well as those of property development promotion, but which are posted in the trade, industry and transport services.

Table 36.Main Projects for the Development of the Construction Industry
SUB-PROGRAMSPROJECTSIN CHARGE/HEAD OF SECTOR
1. Promoting the local production of construction materials1. Construction of cement works, brick works and tileriesMin. of Ind. Dev.; Min. of Mines; Min. of Trade; Individuals (manufacturers)
2. Construction of a clinker factoryMin. of Ind. Dev.; Min. of Mines; Min. of Trade; Individuals (manufacturers)
3. Construction of a ceramic factory (floor and sanitary tiles)Min. of Ind. Dev.; Min. of Mines; Min. of Trade; Individuals (manufacturers)
4. Construction of a production unit for laminated steel (steel reinforcement, IPE, IPN)Min. of Ind. Dev.; Min. of Mines; Min. of Trade; Individuals (manufacturers)
5. Construction of a manufacturing unit for framework and plastering items (laminated wood, paneling)Min. of Ind. Dev; Min. Forests; Min. Trade; Individuals (manufacturers)
6. Geological studies and mapping in order to determine the location of quarriesMin. of Mines; Min. of Construction; Min. of TP
2. Construction/Rehabilitation/Housing maintenance7. Construction of social housingMin. of Construction; DGGT; Individuals (Property Developers)
3. Construction/ Rehabilitation/ Maintenance of industrial structures8. Construction of other industrial units (metallurgy, sawmills, etc.)Min. of Ind. Dev.; Min. of Mines; Min. of Trade; Individuals (manufacturers)
4. Creation of urban developments9. Creation of a land development agencyMin. of Construction; Min. of Land Affairs
10. Creation of developments within the framework of accelerated municipalizationMin. of Urban planning; Min. of the Interior; Min. of Construction; Min. of Land Affairs
5. Servicing of developed land11. Construction of the VRDs in the developments in Brazzaville, Pointe-Noire and DolisieMin. TP; Min. of Construction; Min. of Land Affairs; DGGT
12. Construction of the VRDs as part of accelerated municipalizationMin. of Urban Planning; Min. Interior; Min. TP; Min. Const.; Min. Land Affairs; DGGT
6. Improving the training system13. Creation of technical high schools/technical institutes specialized in the field of constructionMin. of Technical Educ.; Min. of Higher Educ.; Min. Construction; Min. of TP
14. Creation of an Institut Supérieur de Travaux PublicsMin. TP; Min. Const.; Min. of Higher Educ.
7. Strengthening project ownership and project management15. Setting a BET threshold requirement for controlling construction sitesARMP; Min. TP; Min. Construction
16. Modernization of the Civil Engineering LaboratoryMin. TP; Min. Construction
8. Strengthening the rules on construction and town planning17. Revision of the Urban CodeMin. Construction; Min. Land Affairs; Min. TP
18. Revision of the regulations on domestic and industrial wasteMin. Environment; Min. Construction; Min. TP
9. Strengthening the socioprofessional organization of actors19. Adoption of a framework law on construction occupations (engineer, architect, technician, project owner)Min. TP; Min. Construction
10. Promoting property brokerage activities20. Strengthening the legal framework for estate agentsMin. Construction; Min. Land Affairs; Min. TP
21. Revision/adoption of the legislation on joint ownership of propertyMin. Construction; Min. Land Affairs; Min. TP
11. Making available civil engineering equipment22. Creation of an Agence Congolaise de Location de Matériels de Construction (ACLOMAC)Min. TP; Min. Construction
23. Creation of a Fonds d’Equipement de Génie Civil (FEGC)Min. Finances; Min. TP; Min. Construction
12. Developing the local SME network24. Improving the provisions for the award of public procurement contracts in favor of local SMEsARMP; Min. Finances; Min. TP; Min. Construction
25. Facilitating bank guarantees to SMEs in the BTP sectorARMP; Min. Finances; Min. TP; Min. Const.; Individuals (Financial Institutions)
Source: STP/DSCERP fds
Source: STP/DSCERP fds
Table 37.expected employment in the construction sector
Number of jobs201120122013201420152016Average 2012-2016Observations
Housing13 20013 92414 68715 49216 34117 23615 536
Construction11 17111 78312 42913 11013 82814 58613 147
Rehabilitation2 0302 1412 2582 3822 5132 6502 389
MaintenanceNegligeable
Service buildings3 3003 4813 6723 8734 0854 3093 884
Construction2 7932 9463 1073 2773 4573 6463 287
Rehabilitation507535565596628663597
MaintenanceNegligeable
Transport infrastructure40 24444 01648 80856 44065 58776 09758 189
Construction/ Rehabilitation33 76736 89140 61447 01754 75163 09348 473
Mechanized maintenance3 0483 3533 8564 4345 0996 1194 572
Entretien HIMO3 4293 7724 3384 9895 7376 8845 144
Table 38.Development of the Limestone Industry Value Chain
Ministries concernedActions or projects
Economy, Planning, Town Planning and IntegrationAllocation and assessment of investments in the value chain
Industrial Development and Promotion of the Private SectorCreation of a clinker factory to promote the cement and construction materials industry
Setting up laboratories for quality control of construction materials
Mines and GeologyGeological studies to determine the grade and potential of deposits
AgricultureImproving soils for purposes of agricultural yields
AquacultureCorrection of pH rates of water intended for fish farming and aquaculture
Land AffairsDemarcation of the area for exploitation and expropriation
Higher Education and Professional Training, Skills TrainingTraining in the fields of construction materials and ceramics
Source: STP/DSCERP
Source: STP/DSCERP
Table 39.Development of the clay industry value chain
Ministries concernedActions or projects
Economy, Planning, Town Planning and IntegrationAllocation and assessment of investments in the value chain
Industrial Development and Promotion of the Private SectorMakoua Complex

Creation of a factory manufacturing bricks, roof tiles, floor tiles and other construction materials

Makoua Complex

Brazzaville/Pointe-Noire

Creation of a factory manufacturing bricks, roof tiles, floor tiles and other construction materials
Mines and GeologyConducting geological studies on clay potential
Land Affairs

Trade and Supplies
Demarcation of the area for exploitation and expropriation

Establishing a distribution network for clay-based products

Putting in place mechanisms for quality and price control of clay-based material.
Higher Education and Professional Training, Skills TrainingProfessional training the clay-based trades
Tourisms and Hotel TradeCreation of a supply of tourist hotels along the Congolese coastline
Source: STP/DSCERP
Source: STP/DSCERP

The “Tourism And Hotel Trade” Cluster

The Actors and The Main Products

840. The tourism industry concerns all the activities associated with sightseeing tours and recreation activities, catering and accommodation services, supported by the transport services and the trade in cultural and artistic goods. It may be schematized as follows in the figure below:

Figure 22.Overview Of TheTourism Cluster

Source: STP/DSCERP

841. The cluster head of the tourism industry consists of three types of activities: (i) sightseeing tours; (ii) frequenting recreational areas; (iii) the hotel and catering facilities. The operators of this branch of activities are mainly tour guides, hoteliers and restaurant owners.

842. The support activities are linked mainly to (i) transport services involving tour operators and travel agencies, car rental companies, transit services; (ii) telecommunications services (telephone and Internet); (iii) the management of immigration policies (procedure for obtaining visas); (iv) marketing activities concerning Congo as a destination; (v) the trade in artistic and cultural goods; and (vi) ensuring the safety of people and goods.

843. The factors of competitiveness consist of: (i) tourist facilities; (ii) transport facilities; (iii) training activities in the tourism and recreation trades; (iv) financing services in the field of tourism activities; and (v) the governance of the sector (administration, legislation, regulation).

The Strengths, Constraints and Challenges

The strengths of Congolese tourism: natural sites favoring ecotourism

844. On account of its distinctive nature, the Congo may divide its tourism activities into three themes, namely: (i) ecotourism around the national parks and reserves; (ii) seaside tourism around the town of Pointe-Noire owing to its 170 km long coastline (ocean front); and (iii) Remembrance tourism through sightseeing tours of historical monuments. The reserves and natural parks, however, indisputably constitute the most attractive product of Congolese tourism.

845. In fact, the Republic of the Congo has national parks (ODZALA, NOUABALE NDOKI, CONKOUATI) and forest reserves where an internationally recognized floral and faunal diversity cohabit that are likely to attract amateur researchers and tourists for viewing and observation tourism. Owing to the national parks and reserves, the Congo is able to give itself the “ECOTOURISM” tourist label. For the time being, the reception facilities are still lacking at these sites and the inadequacy of management and catering facilities represent a major obstacle to the development of the sector.

846. Moreover, the Congo is composed of a plurality of ethnic groups that is distinguished from one another by their habits and customs, their traditional rites and in the way in which they make artisanal items. This represents another draw point for tourists from other places.

847. By virtue of is natural role of a transit country, the Congo receives many foreigners. Passengers coming from or bound for neighboring countries, notably the DRC, the CAR, Cameroon, Angola and Chad, are bound to use the hotel and catering facilities in the Congo.

848. Besides these natural assets, the Congo has given itself the reputation of a welcoming country where people and goods move around freely both during day and at night, especially in Brazzaville and Pointe-Noire, where the taxi service is among the best – in terms of comfort, safety and availability – in sub-Saharan African cities. This contributes toward the creation of a favorable climate enabling all travelers to visit the numerous natural sites endowed with exceptional wealth with full peace of mind at all times.

849. Communication is also one of the Congo’s strengths, both in capacity as well as in particularly competitive costs. There are currently several mobile telephone operators who virtually serve the entire country, and the Government, owing to the Autorité de Régulation (Regulatory Authority), was able to negotiate some of the lowest communication costs across Africa. In addition, the Internet is gaining considerable ground and to this end, it must be emphasized that significant investments have been carried out under the optic fiber project.

850. The transport network is dense and multimodal (roads, railway lines, airports, sea ports, inland waterways and ports). Considerable investments are underway to modernize this network and to make it more competitive. This is the case for: (i) the Port of Pointe-Noire which, at present, is the only deep-water port in Central Africa; (ii) the Brazzaville-Pointe Noire road is currently being tarred; (iii) the Brazzaville airport is under extension; (iv) the facilitation measures of the Congo river crossing between Kinshasa and Brazzaville by the Beach of Brazzaville are underway; (v) the study of the construction of a road-rail bridge between Brazzaville and Kinshasa is also underway.

851. Also, owing to accelerated municipalization, the departments will have investments and equipment that will contribute to the development of tourism activities.

The main constraints and challenges

852. The demand for accommodation and catering facilities in the main cities (Brazzaville and Pointe-Noire) is thus very high. However, the supply does not always meet the desired quality criteria. In addition, the labor used is poorly skilled. Though the staff are trained, as in the case of youth leaders for recreational activities, they are not utilized for lack of such facilities. In this respect, the Government intends to overcome these shortcomings through a bold investment program targeted around the development of sites, hotel structures, as well as the training of staff in this sector. That is the price the Government will pay to turn this sector into the third pillar of diversification of the economy.

853. With this objective in mind, tour operators from abroad will be approached for promoting and marketing Congolese tourist products. The Government has also started to take up this challenge with the creation of the Agence de Promotion du Tourisme (Tourism Promotion Agency), the opening of the Bureaux d’Informations Touristiques (Tourist Information Bureaus) abroad and the Office National du Tourisme (National Tourism Office), as well as its departmental agencies.

854. The Fonds de Développement Touristique (Tourist Development Fund) will be restructured to enable operators in this sector to obtain financial support for their activities. Already, a growing number of airlines are serving the Congo and travel agencies continue to flourish. Moreover, the development of infrastructure, in particular that of airports, should contribute to making the two airport platforms of Brazzaville and Pointe-Noire, true hubs in Central Africa.

The Strategies, Programs And Flagship Projects

855. To meet the challenges of development of the tourism industry in the Congo, the authorities are planning two strategic axes: (i) strengthening tourist and recreational facilities; and (ii) promoting tourism and recreational activities.

Strengthening tourism and recreational facilities

856. To contribute to economic growth and combating poverty, the government has undertaken to equip the sector with appropriate regulations and to engage in a program of capacity development of the sector. The program includes: (i) the development of tourist sites; (ii) strengthening hotel and leisure facilities; (iii) strengthening human resources; and (iv) improving the environment of the tourist and recreational sector.

Developing tourist sites

857. As part of these projects, the inventory of sites with tourist potential will be completed and valuation and development studies will be carried out. Tourism development of Congo’s exceptional ecological heritage will be envisaged through large development projects of the National Parks (Odzala, Conkouati, Nouabale Ndoki).

858. The development of several tourist sites selected from the inventory carried out, in particular: the Loufoulakari Falls; the Mah village; Lake Nanga; the Djoué waterfalls; the Loango slave route; the Main Sacrée de Sembé caves, including the Châtelet bleu site in Brazzaville, etc. The creation of recreational parks in Brazzaville and Pointe-Noire will complete the actions listed above in order to make the Congo a quality tourist destination

Strengthening hotel and recreational facilities

859. The creation of accommodation facilities that comply with international tourism standards constitutes one of the points of development of the tourism sector. To this end, planning of the accommodation sector will be carried out:

860. 5 Star” hotels. The pool of hotels in the 5 star category is in fact at the heart of the development of quality tourism. Whilst working towards the country’s development through organizing exhibitions or conferences, these hotels are also devoted to ensuring quality, thereby raising the entire sector. The clientele of these hotels consists mainly of businessmen, speakers or official delegations. Taking into account the specific characteristics of the clientele, “5 star” hotels must preferably be installed in the heart of the cities.

861. “4 star” hotels. Strictly speaking, the 4 star category hotels are generally more suited to the tourist clientele. This is why a special effort will be made in the creation of a pool at this level. It must be specified that, to date, most of the high-end hotels in the Congo offer a level of comfort of 3 to 4 stars. The creation of stock of 4 star hotels will answer to the demand for leisure or viewing tourism. Special attention will be given to the seaside areas. These hotels could be established on the outskirts of the cities, within proximity of the main tourist attractions, such as the ocean or the ecological reserves.

862. Resorts. Resorts are generally the type of parks within which community facilities like swimming pools, amenity beaches or sports fields and playgrounds are laid out. Accommodation facilities can take the form of hotels, villas or bungalows offered for rent or even for sale to local individuals or to travel agencies. It concerns facilities that are directed more towards tourist visits. They are generally located some distance from the cities, in sites selected on the basis of their quality.

863. Holiday villages and camping grounds. The holiday villages have similar features to those of resorts, but are however of a more simplified level of comfort to meet a greater tourism demand. Camping grounds are established in the ecological reserves but may also be considered as stopovers on hiking routes. Their level of comfort must be high, but their basic nature consists of perfect integration in the environment. They are designed to receive limited groups of tourists for short periods, from 1 to 4 nights.

864. Holiday camps. Holiday camps are facilities that are aimed at receiving groups of children during the holidays. Their level of comfort is basic. These facilities may also welcome themed classes during school time or even sports teams during their preparation stage.

865. The managerial capabilities of the Ministry will be strengthened to enable the implementation of this program. Moreover, the different structures promoting the sector, both in the Congo and abroad, will be set up and provided with staff and support likely to convince tourism professionals to offer this destination to their clientele, or even to directly persuade this clientele to choose the Congo as a tourist destination.

866. To this end, the Government envisages a set of actions to place the Congo on the global map of tourist destinations. It concerns: (i) the creation of a National Tourism Office, with its departmental agencies; (ii) launching an Internet site and Tourist Information Bureaus (BIT) at the Brazzaville and Pointe-Noire airports, as well as agencies in Europe, North and South America, in Africa and in Asia; (iii) the creation of various promotional material, as well as participation in fairs and other major international events within the tourism sector.

867. Strengthening human resources capacity is also and especially aimed at the operators of the sector to ensure the professional training of their staff. In this context, the Government envisages the creation of the Institut de Formation Touristique (IFT) (Tourist Training Institute).

Improving the environment of the tourism and recreational sector

868. In this programmer, the Government intends to adopt a legal and regulatory framework that will govern the tourism sector in the years to come and that will guarantee the tourist a quality of services that meets expectations. This program will also see to the strengthening of the direct and daily management resources of the sites that fall under the responsibility of the administration. Programs for accessing these sites will be developed, calling on the various modes of communication, air, maritime, river, road, rail and pedestrian.

869. In a transverse manner, the tourism strategy will be accompanied by an integrated program for the facilitation of transport in order to make the Congo more accessible. It will concern in particular:

  • - conducting actions aimed at reducing the cost of international air transport;

  • - scheduling the development of roads providing access to the tourist sites throughout the year;

  • - equipping secondary airports making it possible to access the large ecological reserves, in order to guarantee the safety of tourists;

  • - promoting the putting into operation of boats offering the levels of comfort and security that meet the standards in this industry;

  • - bringing about the commissioning of specialized coaches for tourists on the CFCO lines.

Promoting tourism and recreation

870. It concerns making the Congo as a destination available to the public through exploring national tourist potential and the production and publishing of marketing material on tourism and recreation in the Congo. The promotion will also take place through improvement in the organization of tourism; and (ii) strengthening the tourism financing system. In short, strengthening tourism and recreational facilities, as well as promoting Congolese tourism, will be carried out through several actions, the most salient being those noted in the table below:

Flagship actions for the development of tourism in the Congo

Table 40.Main projects for the development of the tourism industry
PROGRAMSSUB-PROGRAMSPROJECTS
Development of tourist infrastructure and equipmentDevelopment and rehabilitation of tourist and recreational sites-Development of the ODZALA National Park

-Development of the NOUABALE NDOKI National Park

-Development of the CONKOUATI National Park

-Development of the Lac bleu in MÂH village (Pool)

-Development of the slave route

-Development of Lake NANGA

-Development of the DJOUE waterfalls

-Development of the LOUFOULAKARI Falls

-Development of the MINGUELE Falls

-Development of the MOUKOUKOULOU Falls

-Development of the DIOSSO gorges

-Development of the NKILA –NTARI caves

-Development of the INONI cliffs

-Development of the main Sacrée de SEMBE caves

-Development of LOUVAKOU lake (NIARI)

-Development of the LEFINI reserve

-Development of the MALALA caves
Construction of tourist and recreational infrastructure-Construction of a theme park in BRAZZAVILLE

-Construction of a theme park in POINTE-NOIRE

-Construction of a world class hotel in BRAZZAVILLE

-Construction of a world class hotel in POINTE-NOIRE

-Rehabilitation of the MBAMOU Palace Hotel in BRAZZAVILLE

-Rehabilitation of the COSMOS Hotel

-Extension of the KOUYOU Hotel in OWANDO

-Construction of a tourist complex on MBAMOU island

-Development of a hotel development plan in BRAZZAVILLE and in POINTE-NOIRE
Human resources developmentDeveloping a training policy for tourism trades-Creation of the Institut de Formation Touristique (I.F.T) (Tourist Training Institute) in BRAZZAVILLE
Improving the environment of the tourist and recreational sectorStrengthening the legal and regulatory framework-Adopting new legislative and regulatory texts to make the tourism sector more attractive
Improving the management of tourist and recreational sites-Improving the management of the different sites

-Improving the management of the different State hotels
Popularizing Congo as a destinationExploring national tourism potential-Inventory and execution of the monographs of the tourist sites

-Creation of a Congolese tourist label product: ecotourism

-Creation of Tourist Information Bureaus (BIT)

-Facilitating the procedures for issuing entry visas

-Negotiating charter tickets
Production and publishing of tourism and recreational marketing material-Production and publication of tourism marketing material

-Developing a tourist map of the Congo

-Developing long-distance trips in the Congo
Improving the organization of tourist and recreational activitiesCreation and management of bodies promoting tourism and recreation-Creation of a National Tourism Office

-Creation of the Agence Nationale de promotion du Tourisme et des Loisirs
Strengthening the tourism and recreation financing system-Reform of the Tourism Development Fund (F.D.T) in order to fund tourist and recreational activities
Source: STP/DSCERP
Source: STP/DSCERP

The Implications for Growth, Employment and State Revenue

871. The combination of favorable prospects in the global market and the implementation of the Government’s program, will enable increased public and private investment in the sector. Consequently, the tourist industry could experience accelerated growth and could create thousands of jobs in the coming years. According to projections, with the implementation of the development strategy of the cluster, the hotel branch alone could generate around 15 000 direct jobs, distributed across the different classes of hotels.

Table 41.anticipated employment in the tourism industry
Hotel Class20122013201420152016
5* HOTELS4258511 4902 129
4*HOTELS9121 8253 6505 475
RESORTS1482965931 037
HOLIDAY VILLAGES2925841 0221 606
CAMPING GROUNDS97146194292
HOLIDAY CAMPS91146219292
Total1 9653 8487 16810 831
Source: ST/DSCERP and INT-DEC, data from the Ministry of Tourism
Source: ST/DSCERP and INT-DEC, data from the Ministry of Tourism

The “Financial Services” Sector

The Actors and Principal Products

872. On account of its membership of a monetary union, a number of activities linked to the financial services have been assigned to the sub-regional community organization, though still, in some cases, involving the Ministry of Finance. It concerns in particular the definition of the monetary policy, bank control and monitoring activities, as well as bank currency issue (notes and coins). As such, the main financial institutions in the Congo include: (i) the sub-regional institutions (BEAC, COBAC, BVMAC, BDEAC, CIMA); (ii) nine (09) commercial banks, two (02) of which are currently being opened; (iii) sixty-two (62) micro-finance institutions; (iv) four (04) establishments for the transfer of funds; (v) one (01) Fonds de Soutien Agricole (Agricultural Support Fund); (vi) six (06) insurance companies, one (01) of which is currently being opened; and (vii) two (02) pension and social security funds.

873. The Congo’s financial sector cluster clearly reveals the absence of merchant or investment banks, development banks, specialized banks and financial establishments. SOCOFIN, presently the only financial establishment for leasing in the Congo, was taken over by BGFIBANK CONGO in 2010.

874. Beyond its apparent diversity, the Congolese financial system is still under-developed, poorly diversified and largely dominated by commercial banks, reflecting the situation presented by the entire CEMAC sub-region11. Though the under-development of the financial system (as regards its structure) enabled the country to be spared from the global financial torment, it should be noted that it represents a handicap to the emergence of the private sector. Indeed, though the domestic market has substantial liquid assets, credit to the economy remains low, in the region of 4% of the GDP12. At the end of 2010, bank deposits represented 46% of the GDP. Funds remained low and represented only 15% of the GDP, being 32% of deposits. Trade volumes on the money market remained marginal. Moreover, the CEMAC zone is characterized low numbers of bank account holders (around 3%)13.

875. The Congolese financial services cluster is equally characterized by a low level of development of support activities. It concerns, in particular, logistics services such as armored vehicles, safes/strongboxes and electronic banking as regards the supply and installation of electronic cash points (ATM). Dominated by sub-regional organizations and foreign suppliers, we note the absence of nationals in this segment of activities.

Figure 23.Synopsis Of The Financial Services Cluster In The Congo

Source: ST/DSCERP - COBAC reports

Strengths, Constraints and Challenges

The banking system: still undeveloped potential

876. The Congolese banking network is relatively dense, despite being concentrated in the urban areas. This sector is becoming increasingly competitive, with the recent arrival of several Pan-African banks (ECOBANK, UBA, AttijariWafa). Thus, the banks that were reorganized during the 2000’s, with the assistance of COBAC, are genuinely becoming more professional; imparting a real dynamism to the sector. Consequently, credit interest rates have decreased significantly, thereby improving financing prospects. However, the Congolese economy is still marked by under-use of banking facilities (around 4%), as regards both savings and corporate financing.

877. Compared to the situation presented in 2010 (cf. Table 43), the Congolese banking system is undergoing transformation and modernization following the reforms carried out by the authorities (electronic cash, payment systems).

The microfinance institution sector: strong potential to be developed

878. The microfinance institutions are facing a number of challenges including the absence of intermediary financing, the lack of capital and long term funds, obstacles to the granting of medium and long term credit and the lack of professionalism of the staff recruited. Despite these difficulties, the microfinance institutions nevertheless have definite growth potential.

The insurance sector: an emerging market

879. The insurance market is dominated by six companies (ARC, AGC-Congo, AGC-Vie Congo, NSIA-Congo, NSIA-Vie Congo, Allianz-Congo) including several brokers (GRASAVOYE, INTERNATIONAL INSURANCE, H de B Assurances, …). In this steadily growing market, less than 5% of Congolese have taken out an insurance policy. In reality, only vehicle insurance, made compulsory, is of interest to individuals, with the life insurance products being relatively ignored. The scope for progress is thus considerable for insurance groups, on condition that the culture of insurance is introduced and developed.

Table 42.Banking system in the congo in 2010, Main banks and their branches
BGFI BANK CONGO2
BCI17
LCB5
ECOBANK5
UBA CONGO3
Crédit du Congo8
Source: ST/DSCERP - COBAC reports
Source: ST/DSCERP - COBAC reports

Pension funds: activities that need to be further developed

880. Pension funds and social security funds still need to be further developed. They are characterized by performance below expectation due in particular to a precarious financial situation, the absence of exhaustive accounting and the absence of a control and auditing mechanism.

Table 43.Strengths and weaknesses of the congolese financial sector
Abundant liquidity and banking resourcesAlmost non-existent financial market (share market not very viable and bond market non-existent)
At sight deposits represent more than 50% of the resources of the banking system.
There is thus The problem of transformation of the DAVs and loans to MLT
Positive results are in progressBank credit granted mainly to CT
Existence of a modern system of payment (STOMA & SVSTAC), the foundation of trust in the banks
A business environment that is not conducive to taking risks (lack of guarantees, poorly respected property laws, corruption, …)
A prudential regulatory frameworkPoor capacity for the mobilization of deposits and the granting of credit Excess liquidity but a lack of long term resources (note to client: source text problem).… At the source of a risk of conversion in the case of financing to MLT Absence of suitable financial institutions for financing to LT
Excess liquidityWeakness in credits granted to the private sector
Although limited, banking operations in the Congo are profitableVery limited access by the broad public to financing.
Under-use of banking facilities
Absence of a body centralizing the record of credit to businesses
Absence of an efficient tool enabling risk assessment
Poor demand (Informal sector is dominant)
High exit rates
MICROFINANCE INSTITUTIONS
Favorable economic conditions (steady growth, controlled inflation,…)Informal finance only funds the acquisition of Investment assets to a small extent (short term loans)
A specific legal and regulatory frameworkAbsence of real Intermediary financing
Clearly defined responsibilities between the Ministry of Finance, COBAC and the APEMFLack of equity in the major part of the EMFs, hence the limited financial viability which hampers loans to The LMT
Enormous growth potential (strong, demand in the rural and peri-urban areas)The usurious nature of the interest rates practiced, owing to the risk taken and the real time availability of funds
Its adaption to the socio-economic needs of the poor economic agentsLow penetration rate (concentraron of EMFs in The two main cities of Brazzaville and Pointe-Noire)
Strong innnovation capacityPoor allocation of funds to the productive sector compared to the savings mobilized Lack of professionalism
Absence of a national microfinance policy
INSURANCE
Untapped marketShortcomings In the national control institution (Direction Nationale des Assurance)
Fragility of the financial situation of insurance companies Non-respect of prudential ratios prescribed by CIMA
PENSION FUNDS
Precarious financial situation
Failure to keep comprehensive accounting records
Lack of a control and auditing mechanism

The Strategies, Programs and Flagship Projects

881. Since 2009, the Government, with the support of the international financial community, notably the International Monetary Fund (IMF), defined a strategy for the development of the financial sector, as part of the Poverty Reduction and Growth Facility (PRGF) program. During the period 2012-2016, it will tackle the implementation of this strategy and will adopt other actions to complement those provided for in this strategy. These additional actions will focus in particular on the development of non-financial services to businesses, the setting up of credit incubators and the creation of specialized institutions.

Modernizing the infrastructure and environment of the banking and financial system

882. The financial system, or more specifically the banks, are only able to play their role in full if considerable structural transformation takes place in the Congolese economy and society. To do this, actions are envisaged in order to better adapt the environment. It concerns defining common rules that are applicable to all public and private actors, strengthening the monitoring system for respecting these rules, as well as providing an operational sanctions system for offenders.

883. From this perspective, the following specific actions will be carried out: (i) strengthening the legal framework for ownership rights, in particular as concerns land, to facilitate the establishment of businesses and to rigorously establish bank guarantees; (ii) strengthen bankruptcy laws and put in place independent commercial courts capable of ensuring that business law is upheld; (iii) improving the rules and procedures for guarantees in order to encourage the banks to engage more actively in the long term financing of businesses and large investment projects.

Developing the supply of banking services

884. The reorganization process of banking activities, which the Government and the community institutions participated in (COBAC and BEAC), led to the restructuring and privatization of most of the commercial banks. This fostered the restoration of the public’s confidence in the banking system and the opening of Congolese banks abroad, through leaning on first-rate foreign banking partners.

885. The current attractiveness of the Congolese banking system has led to the establishment of new banks, constituting a factor of development of competition in the sector. The vigor of this competition calls for banks to adapt their strategic orientation in order to avoid the scenario of any of them facing eviction. To grow institutional efficiency, the banks will have to improve internal control in order to simplify their internal procedures. To do this, they will have to carry out cost accounting to assess the performance of their different departments. With the development of competition through price (drop in the cost of banking services, especially the cost of credit), survival lies in setting up a management system by process or by activities, allowing cost competitiveness.

886. The banks must also invest in the production and analysis of credit information, to grow their share of the market. They will thus have to explore, using new techniques, segments of the market currently perceived as high-risk segments. As part of the regular consultation with professional banking, the Government will encourage banks to develop cost competition and to explore new client niches, such as the SME segment.

887. Besides, the necessity of achieving true financial inclusion commands the presence of credit and microfinance institutions with an option marked for the deployment of local agencies. Thus, within this perspective, the creation of a postal bank that would benefit from the insolvent postal network. The advantage of this approach lies in the existence of a dense network of postal agencies across the country. The postal savings network will make it possible to bring together the banking services, especially the savings collection services, to the people marginalized from the classic banking system. The Government intends to transform the Centre des Chèques Postaux (CCP) (Postal Check Center) into a postal bank.

888. Moreover, the Government has undertaken the creation of a Caisse de Dépôts et Consignations. In fact, as the manager of funds protected by the law, the Caisse de Dépôts et Consignations is the reference banker of the legal professions (lawyers, administrators and legal representatives, Commercial Court clerks, bailiffs, etc.), but also of social security and general interest organizations. Thus, lawyers are responsible for depositing the funds received from their clients from property transactions, inheritance, etc. The same applies for the administrators and legal representatives in the procedures of receivership and liquidation of businesses in difficulty. This reform will make it possible to overcome the absence of an institution specialized in the management of funds protected by the law.

889. The Caisse de Dépôts et Consignations will also enable the long term recycling of savings collected by the social security fund, through the financing of general interest projects such as social housing, urban renewal, transport infrastructure, hospitals property, etc. It is also a tool to support the territorial authorities.

Promoting long term financing

890. The development of long term financing could be facilitated through the following actions: (i) the mobilization of medium term internal resources, through putting in place attractive savings products and through the expansion of the sub-regional financial market, and (ii) the implementation of a targeted reform of certain prudential standards considered to be restrictive by the banks (processing coefficient, division of risks).

Developing non-financial services to businesses

Supporting promoters in the establishment of businesses

891. In order to support the SMEs and the TPEs, the need to create new sources of capital and alternatives to the classic commercial banks, is commonly recognized, offering loans and non-financial support at the same time. Supporting the promoters’ projects is thus essential to make their activities attractive to financial organizations.

892. As part of this strategy, support to the SMEs will be provided through the Fonds d’Impulsion, de Garantie et d’Accompagnement (FIGA). Indeed, it is difficult for the Small and Medium Enterprises and Crafts to qualify for bank financing owing in particular to poor staff inputs, the lack of serious guarantees and organizational and managerial shortcomings. The necessity of a financing organization that would support the creation and development of SMEs and crafters, is taking shape with the project for the creation of a “Fonds d’impulsion, de garantie et d’accompagnement des petites et moyennes entreprises et de l’artisanat, FIGAPME/A”. The basic activity will concern three distinct but complimentary threads:

  • impetus: co-financing projects for the creation and development of SMEs and artisans through granting additional loans to those already granted by the financial and banking partners; The granting of loans subordinated by the FIGA-PME/A which reduces the risk for the financial partner or banker, thereby facilitating access by the economic operator to bank credit;

  • guarantee: the partial contribution of the guarantee required by the financial partner or banker; the fund enables the financial or banking organization to partially cover his/its own risk;

  • support: the provision of financial techniques required to draft the business and financial plans to make the projects for the creation and development of the PMEs and artisans eligible for bank loans.

In this way, the promoters will be assisted in the “pre-creation support” phase of the creation of the business and in the “post-creation support” phase of the creation of the business.

893. The pre-creation support will assist in guiding the promoters in the design of their project, by focusing the analysis on basic parameters like: the target market and product, competition, motivation, and training and experience of the applicant with, if need be, advice on strengthening capacities. The support will further assist in creating awareness of the promoter to the full set of legal, regulatory and administrative obligations to which he will be subject within the scope of his activity.

894. During the post-creation support phase, the promoter will continue to benefit from FIGA support when making his first managerial decisions. It concerns avoiding leaving the entrepreneur to face his questions alone and will make up for his lack of experience. This support will greatly influence the success of the project. Indeed, regular reporting on the activities of the company will help detect the financial, administrative and commercial problems that may arise in time.

895. Another FIGA mission will be the training of promoters or business leaders in the preparation of accounting records and the certification of the propriety of the accounting practices of SMEs. This will solve the problem of the lack of reliable bookkeeping by many SMEs; a shortcoming that represents an obstacle to obtaining bank financing.

896. FIGA will also play the role of SME observatory through centralizing the documentation relating to the SME sector and the accounting information on SMEs. The observatory’s database will be fed by certified financial statements on SMEs and will help provide information to users (banks, tax authorities, …). The observatory will also act as an investment promotion tool to help potential investors identify and use investment opportunities and share or assist in the expansion of successful experiences.

897. FIGA will also strengthen the equity of SMEs through grants, whose funding agreement by the banker would be conditioned by an increase in equity and subordinated loans. Such financing will thus be subordinated to bank loans.

Creating credit support tools

898. Security rights (mortgages, pledges, etc.) the credit bureau and the central balance sheet data are all support tools to banking credit. In the Congo, the constitution of mortgages comes up against its prohibitive cost and the unwieldiness of the process pertaining thereto. Moreover, taking into account the malfunctioning of the judicial system, the banks face the problem of authenticity of mortgages. To overcome this problem, they preferably require surety that the managers of the SMEs have difficulty in obtaining. To correct this shortcoming, the Government has also entrusted FIGA with the task of guaranteeing the credits that the financial institutions grant to companies, in particular to the SMEs. This is so as to reduce the aversion of the microfinance institutions to SMEs.

899. Moreover, the Government will pursue land reform that is already underway, in order to facilitate the constitution of mortgages, to ensure their authenticity and to enable their realization by financial institutions in the event of default by the debtor. The reforms envisaged within the scope of the improvement of the business framework, will also relieve the liquidation procedure of insolvent companies.

900. To ease the credit decision by the financing institutions, the Central Bank has put in place a bank risk bureau. This is an instrument for centralizing all bank undertakings. It provides banks with the level of commitment of their clients towards the entire banking system and enables them to detect bad debtors.

901. However, this risk bureau does not cover all financing institutions, in particular the microfinance institutions. The Government will assist the microfinance establishment in developing a centralization tool for their outstanding credits. Furthermore, the quality of information produced by the current bank risk bureau must be improved and its scope must be broadened (to include the postal bank, the Caisse de Dépôts et Consignations, etc.).

902. The Congo does not have a tool for centralizing the balance sheet of companies, to ensure the availability of accounting information on companies and to guarantee quality. A balance sheet bureau project was initiated by the Central Bank for all CEMAC countries. This project experienced considerable delays in its implementation. To overcome this shortcoming, the Congo will put in place a centrale de bilans des entreprises congolaises (Central Balance Sheet Office) as part of the reforms aimed at facilitating credit to companies.

Modernizing the microfinance sector

Strengthening the monitoring of microfinance institutions

903. Launched in the 1980’s with the appearance of the first cooperatives and credit unions, microcredit operations developed in three (3) phases in the Congo. The first phase was characterized by the absence of regulations. The second was marked by a halt in the proliferation of establishments and the harmonization of regulations in the CEMAC zone in 2002. The third phase, which started in 2005, is indicated by the application of the regulatory framework.

904. However, by not taking effective responsibility of this sector by the Monetary Authority, and the poor management of certain promoters of microcredit institutions, the development of the sector was not furthered. In fact, the volumes of deposits and credits of the sector only represented 14,4% and 9,1% respectively of the entire financial system in 2009. In addition, the number of microfinance institutions has continued to drop and the financial situation of some of these institutions has remained fragile.

905. The reorganization of the microfinance sector in the Congo must begin with the establishment of an efficient system of supervision. Taking into account the partial cover of this sector by the Banking Commission (infrequent on-site control visits, …) on account of a shortage of staff, the supervision of this sector must be provided by the Monetary Authority. To do this, the Government will strengthen the organizational, material, human and technical capacity of the microfinance department within the General Directorate for National Financial Institutions, to enable it to manage this sector.

906. Another urgent action is the continuation of the reorganization of the sector through organizing a census of all the institutions across the country and the closure of all those that are carrying out their activities in contravention of the regulatory framework (lack of Monetary Authority approval, prohibited activates, etc.). The Government will also have to assist in the reorganization of the profession through the revitalization of the Association Professionnelle des Etablissements de Micro finance (APEMF) (Professional Association of Microfinance Institutions).

907. In order to facilitate the control of the sector, the Secretariat of the Banking Commission initiated a draft accounting plan for microfinance institutions, accompanied by software. This accounting plan and the associated software is currently being implemented. When this accounting plan and its software are rolled out, the Government will facilitate the adoption thereof by the actors of the sector (supervisory agents and operators in the sector). To this end, training sessions will be organized for all participants in the sector.

908. Another shortcoming of the sector is the lack of training and the inexperience of certain promoters. To remedy this shortcoming, the Government will facilitate partnerships between the APEMF and the specialized institutions for strengthening the capacity of the micro-finance sector.

909. Lastly, the Government will encourage the independent microfinance institutions to form networks in order to consolidate their share of the market and in so doing, their financial standing. It will also promote microcredit underwritten by mutual guarantee, notably in the rural areas.

Promoting an APEC-APEMF partnership

910. The banks refinance themselves with the Central Bank, but the microfinance institutions suffer from the absence of refinancing mechanisms for credit granted to their clients. Their relations with the banks are not dynamic. Thus, the Government will promote greater collaboration between APEC and the APEMF in order to facilitate the procedures for opening bank accounts with the microfinance institutions and to relax the conditions for granting bank credit to the last-mentioned. One of the conditions for the success of this collaboration is the improvement in the accounting practices of the microfinance institutions, to enable the banks to better understand the risks associated with credit granted to these institutions.

911. Indeed, we note that the microfinance establishments are facing difficulties in producing statistical and accounting documents due to the poor level of knowledge of the human resources and the absence of recourse to accounting professionals considering the high cost of their services. Nonetheless, recourse to the approved management centers is an envisageable solution since this mechanism enables better presentation of the documents, financial transparency, “reporting” to the supervisory authorities with a sharing of the costs, leading to certain reduction in the cost of producing accounting documents.

Finalizing the reorganization of the insurance sector and the social security and pension fund

912. The insurance sector suffers from several shortcomings, mainly the weakness of the national control institution (la Direction des Assurances), the non-observance of regulations, the financial fragility of existing companies and the non-respect of the prudential ratios prescribed by the Conférence Interafricaine des Marchés d’Assurances (CIMA) (Interafrican Conference of Insurance Markets). Furthermore, the insurance companies make poor use of the insurance premiums, making them incapable of indemnifying all the claims of the insured within the required time limit; explaining among others, the wariness of economic agents to honor the obligations of insurance policy subscriptions.

913. To remedy these facts, the Government will consolidate the activities of control of the sector to ensure respect of the regulatory mechanism and the prudential standards by insurance companies. To do this, and in order to enable it to properly fulfill its mandate, the Direction des Assurances has been reorganized and will be equipped with the consequent material, financial and human resources. As a result, it has just integrated the Direction générale des institutions financières nationales.

914. The Government will also pursue the reorganization of the financial sector through finalizing the reform of the ARC (Assurances et Réassurances du Congo), increasing the capital of other insurance companies and simplifying the conditions for approval of the insurance intermediaries (general agents and brokers).

915. Like the insurance companies, the two pension funds, the Caisse Nationale de Sécurité Sociale (CNSS) and the Caisse de Retraite des Fonctionnaires (CRF), are also in a fragile financial situation. The weaknesses and malfunctioning of these funds have been highlighted through recent audits funded by the Government. They do not keep exhaustive accounting records and are not subject to regular controls and audits. In addition, their documents have become ineffective.

916. To improve coverage of the social security services, the Government has undertaken a vast number of reforms of the two pension funds. This reform focuses in particular on the adaptation of the regulatory framework to the new economic environment (the pension system through an allocation requiring regular adaptation of the regulatory framework), the execution of an auditing plan of State arrears the vis-à-vis these two funds and strengthening the control mechanism. The Government intends to finalize this reform over the next five years.

Promoting the expansion of the specialized financing institutions

917. The Congolese financial system is characterized by a shortage of institutions specialized in leasing, real estate, etc. The only specialized financing structure is the Fonds de Soutien à l’Agriculture (FSA) (Agricultural Support Fund), which is specialized in financing agricultural activities.

918. As regards leasing, the survey carried out in 2009 by the Conseil National du Crédit on the financing of SMEs in the Congo, highlighted the ignorance of this type of financing by almost all SME managers. What’s more, with the disappearance of SOCOFIN, the only leasing company established in the Congo, leasing is virtually no longer practiced here. In fact, after the takeover of SOCOFIN by the BGFIBANK group in 2010, its activities were merged with those of BGFIBANK-CONGO. Leasing is now offered by BGFIBANK-CONGO as another financial product.

919. On the other hand, no fiscal measure has been planned to encourage the development of financing through leasing. In fact, the current fiscal framework does not sanction the principle of the staggering of VAT over the rental period of the equipment, and does not allow the transposition of the tax advantages that certain companies on leasing contracts benefit from.

920. Consequently, there is no mechanism for the tax exemption of assets leased to companies benefiting from tax exemptions. This is especially the case with oil and gas companies who have dispensatory tax regimes, especially as regards VAT. On account of the non-transposition of dispensatory measures to assets acquired by the leasing company, these enterprises are not inclined to resort to this type of financing, even though they represent vast potential for the growth of leasing as an activity. To promote the development of financing through leasing, the Government will put in place regulations that will organize this activity, as was done in the Maghreb countries, Tunisia in particular.

921. As regards property financing, the success of land reform underway is perceived as being a necessary condition for the development of this branch of banking activities, through securing the procedure for the constitution and realization of mortgages.

922. Making payment methods available is a bank operation that is today experiencing real development beyond the classic banking channel. This is taking place through the activity of the transfer of domestic funds carried out by economic operators that are not approved by the Monetary Authority, notwithstanding the monopoly reserved for credit and microfinance institutions as a secondary activity, through community legislation on the subject. The development of this activity of the transfer of domestic funds is based on an established and growing demand from the population owing to the simplicity of the mechanism that does not require the principal to be the holder of a bank account, and the speed of the transaction made possible by the new information and communication technologies.

923. However, faced with the risk of failure, in view of the requirements concerning combating laundering and for improved control of the sector by the Monetary Authority, it is necessary to conduct an inventory of the economic agents other than the credit or microfinance institutions practicing the transfer of funds and reaching a true supervision of this activity through the promulgation of specific legislation.

924. The Government will also proceed with the reorganization of the activity of the transfer of funds, through the promulgation of laws pertaining thereto, an inventory of the operators and through strengthening control of the sector. The Government will furthermore oversee observance of the laws governing the activities of exchange dealers.

Strengthening the operation of the National Credit Council (CNC)

925. The National Credit Council (CNC) is a consultative organ for financial services development policy, especially credit policy. It is governed by law no. 24/63 of 15 June 1963, on “Regulation of the banking profession and creating organizations for the purpose of conducting the study and implementation of the credit policy, together with control of the banking sector in Congo”. With the institutional changes that occurred in Congo and in the CEMAC zone at the beginning of the 1990s, in particular the creation of the Central African Banking Commission (COBAC), responsible for the supervision of the CEMAC banking systems and the harmonization of banking regulation in the CEMAC zone which resulted from it, the organic texts of the National Credit Council, especially the law of 15 June 1963, have become obsolete. Consequently, it is necessary to adapt them to the new context.

926. The process of updating the organic texts of the CNC is currently being undertaken. This will allow its statutes to be revised in order to broaden its brief. In fact, the Government intends to make the CNC play its part fully in the implementation of the measures provided for in the context of this strategy to develop the financial sector.

Encouraging public-private partnerships in the financing of projects

927. The proposed improvement of the investment framework should provide incentives for many foreign investors to develop businesses in Congo. To encourage their investments and to facilitate financing of big projects, the State will establish a framework for the development of public-private partnerships in the form of service contracts, management contracts, leases or concession contracts. These partnerships will relate to the supply of public services such as electricity, water and transport.

928. In view of the high level of idle budget savings, earning low interest at the Central Bank, the Government will establish a mechanism which will allow these savings to be directed towards private investments. In fact, in order to promote the development of public-private partnerships, the Government will sign a management agreement for part of the budget savings with an investment fund of international standing. In this way, the State will indirectly participate in the financing of major projects through the agency of this fund which will place its capacity to provide a financing package at the service of the Congolese economy.

929. The investment fund selected will have to open a branch in Congo and its capital will be open to local private investors and the international financial development institutions (World Bank, African Development Bank, French Development Agency, Exim-Bank, ACDI, etc.). To comply with the convention governing the Central African Monetary Union (UMAC), particularly with regard to the repatriation of foreign reserves, the capital collected by this fund must be used solely to finance projects to be carried out in the BEAC issuing area.

The Expected Impacts On Growth, Employment And State Revenues

930. With the goal of revitalizing and developing financial services, this sector will have to contribute to increasing the supply of jobs on the national market. This contribution will be marked by the entry of new banks into the market and the opening of new agencies.

931. In addition, the development of the banking network will be accompanied by the development of a number of support activities, in particular the transport of funds, the sale of specialized equipment and supplies for the operation of services, as well as security services for the surveillance of branches and teller counters. In addition, the development of the insurance and brokerage sector will also help to increase the supply of jobs.

932. The banking and insurance sector, through its development, will facilitate the financing of economic activities and consequently will make a strong contribution to economic growth in terms of GDP.

Figure 24.Key Programs And Projects For The Development Of Financial Services

Source:STP/DSCERP

Chapter 09: Strengthening The Private Sector And Competitiveness

Strengthening The Private Operators

The Characteristics, Constraints And Challenges

933. A sector still in its infancy and dominated by informal activities. The Congolese private sector remains largely underdeveloped and many Congolese are still private operators in the informal sector. A few large companies, for the most part foreign, basically make up the formal private sector and coexist with a myriad of national companies primarily engaged in the informal sector. Indeed, out of the roughly 22 477 companies identified from 1996 to 2006, almost all (97.5%) are Very Small Enterprises (VSE), with only a tiny share (2.4 %) of Small and Medium Enterprises (SMEs) and large firms (0.1 %).

934. A sector characterized by a lack of players in the industrial sector. With characteristics similar to those above, activities in the private sector are dominated by “small” services, particularly trade, which accounts for more than 80 % of registered businesses. This shows the still embryonic nature of the production sub-sectors, especially the industrial sub-sectors, and thus the poor (primary-secondary-tertiary) integration of the country’s economic fabric, as well as low productivity and income factors.

935. A private sector stifled by the narrowness of the market. For the private sector, with the exclusion of the extractive industries, the market is limited to the national space. Regional prospects exist but are still under-utilized both because of inadequate capacity (infrastructure, production, etc.) and competitiveness (problem of scale and thus of cost) and lack of vision (weak trade policy and regional integration). As a result, the development of the Congolese private sector, excluding mining and oil, is considerably stifled by the narrowness of the market. The private sector also operates within a framework that is not conducive to investment for both locals and foreigners. In particular, there is the high tax burden. Even though the country already has substantial oil resources, the persistence of red tape and other transaction costs are hindering the entrepreneurial venture. Added to this is the difficulty of access to key production factors such as water and energy, as well as inadequate human resources both in volume (low population) and in quality (educational training) and unit costs (labor costs relating to productivity). Furthermore, companies experience difficulty in accessing credit due to the absence of an operational security and risk management system.

936. The list of constraints identified as obstacles to private enterprise in the Congo is rather long. The constraints are at the same time institutional, administrative and regulatory, as well as economic and financial. At the institutional and administrative level, there is a lack of adequate market and technological information, low computerization of ministerial structures, weak support structures for SMEs and a multitude of red tape. At the regulatory level, there is a poor adjustment of legislation and taxation and an excessive tax burden, especially for a country which already has abundant oil resources to finance the budget. At the economic and financial level, narrowness of the market, high productions costs, the lack of specialized banks and difficulties in accessing credit, are all factors that limit the development of the private sector. Furthermore, weak infrastructure for the promotion and development of SMEs and Crafts, coupled with the lack of managerial skills, hamper private initiative. These shortcomings are evident through the various ranks occupied by the Congo in the “Doing Business” reports. According to these rankings, the Congo’s performance is well below what is required for the emergence and development of the private sector. Recent developments in terms of rankings seem rather unfavorable as the country has dropped in the rankings during the past few years (2010 and 2011). However, the construction sector shows more encouraging prospects as reflected by the country’s high ranking (above the median of the sample countries) in the granting of building permits.

937. In all, it is clear from the foregoing that the business environment in the Congo is relatively unattractive and unfavorable to operators and investors. An indication of this is the low amount of direct foreign investments or their exclusive concentration in the extractive industries (oil and mining). These obstacles to the business environment force the majority of local enterprises to engage in the informal and farming sectors, with low capacity and no scale effects. The resulting low competitiveness is a major obstacle to the success of the strategy for the accelerated diversification, modernization and industrialization of the Congolese economy, as envisaged in the “Road to the Future.”

Strengthening The Private Operators And The Business Climate

938. Aware that it is through the development of the private sector that the Congolese economy can move towards emergence, the Congolese authorities have focused on promoting the private sector as a key pillar of the medium-term development strategy. The overall objective is to develop the private sector and improve its contribution to investment and growth. It is, in particular, a question of instilling in the Congolese economy, a strong entrepreneurial culture reflected by the presence of a dynamic private sector, with an extensive infrastructure of SME/SMI entrepreneurs, in like manner to what occurred in the emerging Asian economies. To achieve this general objective, the Congo must be firmly placed in a broader context of regional integration, where the size of the country is no longer a constraint: at the CEMAC level, local production would face a market of 30 million consumers; by expanding to the east bank of the Congo (DRC, SADC and ECCAS), the market would expand to well beyond 200 million potential consumers.

939. The actions of the Congolese Government to promote the private sector will focus on five points. First, the Government will strengthen dialogue with the private sector to reduce red tape that economic operators have been complaining about. This red tape is caused by the multiple administrative controls and by those in charge of these controls. This dialogue will also help in easing the burden of incidental taxes, often at the root of corruption. To do this, the Government will render operational the structures of the High Council of Public-Private Dialogue (HCPP).

940. Secondly, to facilitate the settlement of commercial disputes, the functioning of commercial courts will be improved and the Government will create arbitration courts. Indeed, encouraged by the OHADA Uniform Act, commercial arbitration helps speed up the judicial process and enhances the confidentiality of information, as well as the knowledge in advance by the parties as to the cost of the procedure.

941. Thirdly, the Government will participate in consolidating the autonomy of the private sector vis-à-vis the public sphere through the promotion of independent employers’ bodies, ensuring representation and the regulation of various sectors. This will help fight against corruption, encroachment and predation of the private sector by the public sphere, which in fact encourages entrepreneurs, as highlighted in the report of the High Council for International Cooperation14, to either approach the public sphere to protect their business activities, or to maintain their businesses in the informal sector to avoid the phenomenon of pressure or uptake by Government.

942. Fourth, the Government will improve the functioning of the Centre for Business Formalities (CFE) to ease the business creation procedure and to contribute to strengthening the provision of public services. This will be effected by improving the productivity of the public administration and continuing the building of infrastructure such as electricity, transport and communication, in order to facilitate business.

943. Fifth, in order to alleviate the scarcity of skilled labor, the education system will be strengthened by adapting programs and courses to the needs of the labor market.

Strengthening Private Sector Financing Institutions

944. It is widely recognized that, in order to support SMEs and very small businesses, it is necessary to create new funding sources and alternatives to traditional commercial banks, which offer both loans and managerial support. Supporting project developers is thus of primary importance to make their businesses attractive to financial institutions. As part of this strategy, support for SMEs will be provided by the Impetus Guarantee and Support Fund, (FIGA) being created. Thus, SMEs will receive “ante-creation” support during the development period of the company and “post-creation” support after the creation of the company. The ante-creation support will help guide developers in designing their projects, focusing on the analysis of basic parameters such as: market and product target, competition, motivation, training and experience of the applicant and, where appropriate, a referral to capacity building. The support will also assist in the education of the developer on all the legal obligations, regulations and administrative provisions applicable to him within the framework of his business.

945. In that respect, FIGA will be strengthened to fully accomplish its mission. In the post-creation support phase, the project developer will continue to receive support from FIGA in his first managerial choices. This will avoid leaving the contractor to face his questions alone and will make up for his lack of experience. This support will greatly influence the success of the project. Indeed, regular reporting on the activities of the company will help detect the financial, administrative and commercial problems in time that may arise. Another FIGA mission will be the training of developers or business leaders in the preparation of accounting records and the certification of the propriety of the accounting practices of SMEs. This will solve the problem of the lack of reliable bookkeeping by many SMEs; a shortcoming that is an obstacle to obtaining bank financing. FIGA will also play the role of SME observatory through centralizing the documentation relating to the SME sector and the accounting information on SMEs. The observatory’s database will be fed by certified financial statements on SMEs and will help provide information to users (banks, tax authorities, …). The observatory will also act as an investment promotion tool to help potential investors identify and use investment opportunities and share or assist in the expansion of successful experiences. FIGA will also strengthen the equity of SMEs through grants, whose funding agreement by the banker would be conditioned by an increase in equity and subordinated loans. Such financing will thus be subordinated to bank loans.

946. Finally, in order to reduce banks and microfinance institutions’ aversion to SMEs, FIGA will guarantee the loans that financial institutions grant to companies, especially to SMEs. Indeed, Congolese SMEs have little collateral to offer financial institutions, which, for their part, have no incentive to participate in financing projects if they cannot reasonably cover the risk of non-repayment of the amounts lent.

Encouraging Foreign Investors

947. The proposed improvement of the investment climate should encourage many foreign investors to do business in the Congo. To encourage them and facilitate the financing of major projects, the State will establish a framework for developing public-private partnerships in the form of service contracts, management contracts, leasing or concessions. These partnerships will focus on providing public services like electricity, water and transport.

948. Given the high level of idle budget savings and its poor remuneration at the Central Bank, Government will establish a mechanism to channel these savings into private investment. Indeed, in order to encourage the development of public-private partnerships, Government will sign a management agreement with an internationally renowned investment fund for a portion of budget savings.

949. Thanks to this, the State will contribute indirectly to the financing of large projects through this fund that will use its knowhow to raise funds for projects at the service of the Congolese economy. The investment fund that will be chosen will also have to open a branch in the Congo, with its capital base open to local private investors and international development institutions (World Bank, African Development Bank, French Development Agency, …). To comply with the agreement governing the Monetary Union of Central Africa (UMAC), particularly as regards the repatriation of foreign exchange reserves, capital raised by this fund will be used exclusively for financing projects located in the BEAC’s zone of issue.

Reducing Factor And Transaction Costs

950. The Congolese economy is not very competitive despite the country’s immense potential and despite the efforts made by Government to create a business friendly environment. Even though efforts are being made in the areas of public finance governance, in transparency in the oil sector and in the fight against corruption, there are still many weaknesses with regard to accountability and a judicial system that ensures business law. In terms of competitiveness, the national economy does not offer sufficient opportunities for job creation to fight effectively against poverty. Inputs, quantitatively and qualitatively weak physical and human capital and an excessive nationalization policy of the past, represent a significant cost for the private sector to assume and play the expected role of development engine. To render the economy competitive, the Congo must strive to: (i) improve the business climate in order to fight against unemployment and strengthen non-oil revenues through the creation of production units in various sectors, (ii) address the challenges in the areas of health, education, water and electricity to strengthen human resources and basic productive services, (iii) increase physical capital through a rational infrastructure development policy, (iv) develop the financial sector since the development of financial circuits and the improvement of intermediation are necessary to foster the development of the private sector, and (v) increase the institutional capacity of private sector organizations to set things in motion and to support the development of business.

951. The axes adopted for implementing this strategy objective will focus on six points. These are: intensifying the internal adjustment of businesses in order to align the skills and behaviors of business leaders with the universal rules of modern management; capacity building of the most representative employers’ and professional organizations (through the improvement of services to member companies, capacity building of proposals and analysis); the rationalization and strengthening of support mechanisms for the private sector so as to: (i) ensure the promotion of investment and exports, (ii) ensure rational support and technical and technological assistance for companies, (iii) promote quality and standardization, (iv) improve companies’ access to finance; revitalize the consular chambers by strengthening their role as an interface between the public and private sector; establishing control systems for the energy, water and telecommunications sectors.

Figure 25.The Congo In International Competition – Competitiveness

Strengthening Trade Policies

The structural transformation of the Congolese economy to reduce its dependency on oil revenue and the volatility of the country’s economic performance, is a priority objective of the Congolese authorities. Like other emerging countries, the goal is to achieve higher growth which is sustained and driven by the private sector. The Government will thus implement trade policy incentives, in addition to the strategies of direct support to productive sectors and private operators described above. These policies will aim at improving the upstream competitiveness of Congolese products by reducing production costs (imports costs and internal transaction costs), and its downstream competitiveness through trade facilitation and export promotion, including locating outlets for Congolese products, and consumer protection.

These are essentially reform measures that can correct the many institutional, legislative and regulatory distortions that impede the flow and development of national and international trade in the Congo. In addition, targeted measures also have to be taken to help Congolese industrial products conquer the international market. Trade policy is thus a vital complement to the cluster of industrialization strategies previously developed.

The Government’s trade strategies have been divided into three main axes of intervention, namely: (i) stabilizing the national business environment, (ii) strengthening trade policy instruments and promoting Congolese exports, and (iii) maximizing the benefits of regional integration and international trade cooperation.

Stabilizing The Domestic Trade Environment

Stabilizing the business environment is one of the aspects of the national strategy for improving the business environment the main aim of which is to create institutional, legislative and regulatory conditions for supporting and protecting activities related to the production, distribution and consumption of market goods. The actions envisaged below are closely related to these concerns and should foster the promotion of investment, improvement in the competitiveness of the domestic industry and the development of trade.

Improving conditions of access to the trade professions

952. The Government is committed to facilitating the process of business creation in order to reduce costs and time and to encourage entrepreneurs. It concerns the formalities within the public services for the creation of businesses (large enterprises, SMEs and VSEs). This action is aimed at simplifying the registration procedures and reducing the costs of the formalities to be carried out.

To this end:

  • - the tasks of one-stop windows (CFE) will be redefined;

  • - the regulatory deadline for issuing the trader’s card will be respected;

  • - the registration of businesses in the Trade and Personal Property Credit Register will be reviewed, taking into account the recommendations of the OHADA convention held in Brazzaville and Pointe-Noire in November and December 2010;

  • - the payment of a fee of 1 % of the capital, as a guarantee fund, at the creation of an establishment (as concerns foreign economic operators) should be reconsidered with regard to the provisions of Law No. 019-2005 of 24 November 2005 regulating the exercise of the trade professions in the Republic of Congo.

Introducing legislation to promote competition and protect consumers.

953. The Congo does not yet have a comprehensive competition law and the protection of consumer rights. The current regulatory framework includes some provisions of Law No. 06-94 of 1 June 1994 regulating prices, trade norms, recognition and prevention of fraud, but is mainly focused on pricing schemes and sanctions. Other sectoral laws and regulations affecting competition and consumer protection are also part of the legal regulations in force. These are provisions which concern the following sectors: postal, telecommunications and new communication technologies, energy, water, transport and the banking and financial system However, these provisions are not sufficient to fully guarantee free competition and market transparency. Thus, in light of the prospect of a greater opening up of the Congolese market to foreign investment and the pursuit of the policy of privatizing public enterprises, existing legislation should be strengthened for greater efficiency and certainty in the fight against the high cost of living, the protection of local industry, the development of SMEs and VSEs, the protection of consumer rights, etc. ..

The competition law and that of consumer rights protection will also have the effect of promoting the culture of excellence, particularly in the areas of the quality of goods and services destined for the market. As regards the prices and quality of goods, future laws will include provisions that will help in the fight against cartels, mergers and the abuse of dominance, often practised by companies that are monopolies or oligopolies. As part of the development of these new laws, a regulatory authority (National Competition and Consumer Council), an autonomous body responsible for overseeing the implementation of laws, will be set up. These laws and subsequent regulations will be developed on the basis of the guidelines on this matter contained in CEMAC’s regulations.

Establishing an institution for mediation and arbitration

954. Private sector development requires an institution for the mediation and arbitration of disputes. In this regard, one of the main conclusions of the OHADA convention held in November and December 2010 in Brazzaville and Pointe-Noire, was the need to provide the Congo with an alternative institution for the settlement of commercial disputes. This recommendation resulted from the shared observation of the need for Congolese companies to have a wider range of instruments to resolve commercial disputes quickly and confidentially. This would help improve the legal and judicial environment in which businesses operate. The creation of an institution for resolving commercial disputes in the Congo is therefore in line with the desire for a justice which, thanks to its own strengths, best meets the needs of enterprises. The OHADA law provides the legal arguments in favor of establishing an institution for commercial dispute resolution in the Congo. Indeed, the OHADA law recognizes the possibility of creating alternative dispute resolution institutions, besides the Community’s institution. This is the OHADA Court of Arbitration, housed within the OHADA Common Court of Justice and Arbitration, and headquartered in Abidjan. Thus, OHADA Member States have adopted a Uniform Act on arbitration law by giving to each State, the freedom to adopt internal texts on the judge that has power to grant the enforcement of arbitration awards, or find the action for annulment against sentences.

The creation of an institution for settling commercial disputes and the practice of these terms of settlement are thus quite legitimate. It is therefore neither a marginal informal institution, nor an activity of mistrust of the country’s judicial system.

Liberalizing prices and lifting import restrictions

955. The price freeze on locally produced products and the import restriction on general consumer goods often give rise to repeated misunderstandings between the administration, local producers and importers and to explicit or implicit costs for operators without substantial gains for economic agents (consumers and the State). The Government is committed to liberalizing prices and lifting these restrictions in order to promote competition, reduce the cost of imports and thus consumer prices.

Reducing the special levies burden

956. The Government is committed to reviewing a large number of tax and special levies imposed by various jurisdictions on various commercial transactions. The aim is to assess the cost implications for operators, as well as the gains for the State. A recent survey made it possible to detect a large number of these levies of which the legality is not always proven, since some of them are not supported by legal regulations. They are often the work of government services (sundry ministries) and decentralized public authorities (Divisions, City Councils and Districts). They affect both large companies and SMEs and VSEs, as well as small establishments in the informal sector. The Government will develop a work program and an action plan to:

  • - assess their impact on commercial transactions in order to remove those that are of no use;

  • - reduce their burden on the cost price of economic activities and contribute to improving business competitiveness;

  • - fight against red tape and corruption resulting from these bad practices.

Finally, payment of illegal levies never gives rise to billing and thereby becomes a source of price speculation. Traders robbed in this way then seek to make up for the loss of profit incurred.

Facilitating trade

957. The facilitation of trade is aimed at streamlining and simplifying procedures for the flow of goods across borders. In the Congo, this action is necessary to eliminate the many unnecessary hardships that economic operators, especially importers and exporters of goods, are subjected to.

The Government plans to implement a program of actions aimed at:

  • - simplifying customs procedures (customs declaration, clearance of goods, inspection, etc.);

  • - reducing the cost of port charges (port tax, transportation costs, handling, stevedoring, storage, transit, etc..).-

Concerning this last point, it has been discovered that Congo’s stevedoring costs are the highest in Africa, a situation that is in contrast with the Government’s ambition to make Congo a “corridor”, and thus a transit country. Also, the comparative study of port transit and transit corridors costs conducted by the consultancy firm, INCOTRANS, at the request of the Congolese Shippers’ Council, concluded that the port of Pointe-Noire is indisputably one of the most expensive in Africa.

The main cause, as it turns out, is the multiplicity of administrative controls. In this regard, there are within the Port of Pointe-Noire, several services in charge of controlling port operations, all of which belong to the State. These are: Customs, the Port Authority services, the gendarmerie, the police, the territorial surveillance brigade, the Ministry of Commerce, the Taxation department, the Ministry of Livestock and Agriculture, the Ministry of Health, etc. All of these services carry out inspections and tax the operators for their “services” in violation of existing laws.

In that respect, trade facilitation will, finally, contribute to saving time and reducing import and export costs, and consequently to improving the competitiveness of the national economy. The Government’s willingness in this respect is in perfect harmony with the ongoing negotiations at the WTO.

Strengthening National Trade Policy Instruments

Implementing the export development strategy and providing better support to companies in conquering foreign markets

958. Exports represent a powerful lever for economic development. In the future strategy for export development, there are plans to establish the instruments needed for promoting Congolese exports. The export development strategy aims at developing the full export potential of Congolese companies, by focusing their activities on foreign markets. To achieve this, the strategy proposes major changes to the business support mechanisms and the technical and financial assistance granted by the Government.

959. The strategy calls for a more targeted approach aimed at the companies to be prioritized. It also strengthens the indispensable partnership with stakeholders working in the field of export promotion in the Congo. The export development strategy will enable Government to intervene in the changing business needs in a more sustainable and better adapted manner. It is also part of a strategy to improve the competitiveness of Congolese enterprises and is aimed at increasing productivity, supporting the development and marketing of their products, expanding their entrepreneurial base and promoting the development of the agricultural and industrial sectors. The export development strategy revolves around four areas of action:

  • - Adoption of a continuous and modulated support approach.

  • - Strengthening of exporter services. These are essentially: (i) the development of export knowledge (information dissemination, training and consulting), (ii) carrying out group missions and participating in fairs (trade missions and participation in fairs abroad), (iii) the support provided by the economic services of the network of Congolese representation abroad (business intelligence, contacts search, acquisition of market information and assistance in business meetings etc.), and (iv) support for the company’s export strategy.

  • - Establishing export partnership networks to facilitate the creation of clusters in order to increase exports.

  • - Enhancing public/private sector collaboration for the development of exports.

Establishment of trade defense instruments (anti-dumping, anti-subsidy, quotas, trade barriers)

960. To ensure fair and transparent trade with the outside world, the Congo may have to take extraordinary measures to protect itself against the effects of foreign trade practices. Indeed, the WTO agreement allows governments to act against dumping where there is genuine (“material”) injury to the competing domestic industry. To do this, the Government concerned has to be able to prove that dumping is taking place, calculate the extent of the dumping (i.e. determine how low the export price is in comparison to the price being obtained on the exporter’s domestic market), and demonstrate that the dumping is causing or threatening to cause harm.

961. Furthermore, a WTO member may temporarily restrict the importation of a product (as a “safeguard” measure) if a surge in imports of this product causes or threatens to cause injury to the domestic industry. In addition, any WTO member may appeal to the WTO dispute settlement procedure to obtain the withdrawal of a subsidy or the removal of its adverse effects. A member may also conduct an investigation independently and ultimately charge extra duty (known as “countervailing duty”) on subsidized imports that are found to be detrimental to domestic producers. Thus, the necessary measures being contemplated to fight against dumping and subsidies may be special “countervailing” duties to offset subsidies and emergency measures temporarily limiting imports, to “safeguard” domestic industries. For this purpose, the following actions must be undertaken:

  • - development of regulations and institutions to provide trade defense;

  • - capacity building, particularly of the competent administrations for better control and use of trade defense instruments provided for in (bilateral and multilateral) agreements.

Creation of a quality control laboratory

962. In the area of metrology, this will involve:

  • - helping implement an internationally recognized metrology;

  • - developing closer collaboration between stakeholders working in the area of standards;

  • - improving the quality of metrological services and making them accessible to users;

  • - managing a national directory of manufacturers, authorized repairers and importers of measuring instruments;

  • - encouraging companies to develop instruments tailored to their needs.

963. This will require:

  • - the establishment of laboratories equipped with different secondary standards of reference, necessary for a compliance monitoring system;

  • - the effective participation of Congolese experts in the work of international standardization and metrological organizations: Codex Alimentarius, International Bureau of Weights and Measures (BIPM), International Organization of Metrology (IOM) etc.

Establishment of structures for the certification of standards and metrology

964. One of the major challenges that the Congo is facing is that of developing and raising its technical, sanitary and phytosanitary standards to at least internationally recognized levels that will allow it to market food products that can be safely consumed. The Congo also faces other difficulties, when developed countries, to avoid risk, adopt more stringent standards than those currently recognized by the bodies responsible for setting international standards. In addition, the growing fear felt by consumers in developed countries about food safety and food quality, makes it even harder for the Congo to meet increasingly stringent standards. It is therefore essential to adopt a pragmatic approach to the establishment of a “Congo Quality” system backed by accreditation, certification, standardization, quality promotion facilities and SPS, to facilitate progressive compliance and conformity with international standards in general, and with those in particular of the European Union, Congo’s leading trading partner.

Construction of product storage and preservation facilities

965. The Congo is currently facing a severe shortage of food storage and preservation facilities, which, as we know, are necessary for proper market regulation. It is therefore imperative to proceed, without delay, with increasing public supply in this area through the implementation of a program of construction of storage and preservation facilities in its major cities. The economic and social relevance of this project stems from the national strategy for combating the high cost of living which is at the center of current Government policy. To achieve this ambition, it is essential to build storage warehouses in all divisions of the country over time, with Brazzaville and Pointe-Noire being fitted with these facilities immediately. The warehouses will be built with public funds and will be managed according to mechanisms to be determined.

Revitalization of Chambers of Commerce

966. Chambers of Commerce are called upon to play an important role in the implementation of the PND-DSCERP, in light of the tasks they have been assigned, mainly:

  • - defending the interests of economic operators;

  • - supervision and training of operators;

  • - promotion and management of economic activities;

  • - contributing to the development of national economic policies.

Unfortunately, due to various weaknesses in the organization and animation of existing structures, their tasks are not carried out effectively at present. It is also worth pointing out the non-completion of the national restructuring process of the Chambers of Commerce, launched in 1995. This provided coverage of the entire country by consular structures, including Chambers of Commerce for divisions with high economic potential and consular delegations for the others.

So far, only the Brazzaville, Pointe-Noire, Niari and Sangha divisions each have a Chamber of Commerce, and Likouala Division, a consular delegation. As part of the revitalization plan, the installation of consular delegations will not only have to be completed, but new management will also have to be introduced after the elections to be held at all levels.

Construction of exhibition centers

967. The Congo is desperately in need of facilities to house trade promotion events such as fairs and showrooms for products. The annual fair at Pointe-Noire is held in premises so precarious that it is difficult to attract to the Congo, serious (industrial) exhibitors in search of markets. Congolese producers, already few in number, are almost never interested in the Pointe-Noire fair to advertise their products, as it is mainly reserved for or occupied by small restaurants and other drinking establishments.

968. To accompany Congo’s industrialization and to provide domestic enterprises with the opportunity to promote their products, the entire fair organization policy must be reviewed. Firstly, by investing heavily in the construction of large exhibition centers in major cities (Brazzaville and Pointe-Noire), and then, by building moderately large showrooms in the other divisions of the country.

In the process, it would be necessary to consider the establishment of specialized exhibition halls to promote the development of certain business sectors already sufficiently mastered by the people, but whose product quality is still not very satisfactory. This would involve, for example, the following sectors:

  • - sewing (clothing exhibition);

  • - carpentry (furniture fair);

  • - agriculture (agricultural show).

Creation of a World Trade Organization Reference Center

The creation of WTO reference centers as public structures specializing in the technical processing and dissemination of economic and commercial information at the multilateral level, is an initiative of the World Trade Organization (WTO). The Congo should therefore support this initiative. The fundamental objective of the WTO reference center is to allow government officials, business communities, university lecturers and students to have access to sources of trade information, available on the WTO website.

Revitalizing trade in services

The services sector, which accounted for around 50 % of the national GDP in the 60s and 70s, now represents only around 30 % of the GDP over the 2008-2011 period. However, recent experience has shown that countries that have regulated and liberalized trade in services, recorded a higher average growth than other countries.

Furthermore, several studies show that the potential gains from the regulation and liberalization of trade in services, are around four times those that could be achieved from the liberalization of trade in goods. This illustrates how the prospects in this area are promising. This is mainly due to efficiency gains in the areas of finance, insurance, ICT, transport, professional services firms etc. It is necessary for the Congo, which has undertaken various types of reforms to liberalize service sectors, to consolidate gains and improve the overall efficiency of the sectors and subsectors that are regarded as priority services. This calls on the Ministry of Trade and Supplies to supervise the progressive liberalization of trade in services through successive rounds of negotiations, as well as supporting the implementation of the sector programs adopted.

Various important benefits can be derived from the reforms needed in the field of trade in services:

  • - increased economic performance, stimulated by competition;

  • - development of the service sector through global market access;

  • - lower consumer prices through free competition (particularly in telecommunications);

  • - acceleration of innovation, mainly in the telecommunications, financial and information technology services;

  • - technology transfer, facilitated by foreign direct investment.

The development of the activities presented above cannot be achieved without the protection of national production. Without resorting to protectionism, the new trade policy should aim, in accordance with the regulations enacted by the CEMAC Commission in respect of customs and rules issued by the World Trade Organization (WTO) in international trade, at mechanisms for protecting domestic economic activities by changing the system of economic incentives. This policy will also incorporate the effects of the Economic Partnership Agreements (EPAs) between the EU and CEMAC that are about to be signed.

The Congo should work alongside the other CEMAC States to define a different pricing structure for the effective protection of local production. Indeed, contrary to a nominal protection that CEMAC States use in defining a Common External Tariff (CET), effective protection is obtained by applying differential rates on imports of inputs and on imports of finished products for which there are competing products or substitutes. Protection is effective when the rate applied to inputs is lower than those applied to products. These policies are re-examined in the section on Regional Integration.

With the EPAs, the mutual abolition of customs tariffs should enable Congolese products to enter the European market. But, given the existence of non-tariff barriers (technical standards, health standards, …) often applied by the European Union, the Congo will, in order to enjoy the positive effects of the signing of these EPAs, implement an incentive policy for the differentiation of production. As in the case of the Maghreb countries, especially Tunisia, the Congo will use funding from the European Union to organize “clusters”, that is to say, business groups, and to develop the geographical indications system.

In this context, certain sectors (fisheries products, agriculture, forestry, …) will be organized into clusters in order to take advantage of the synergy of the group to implement the necessary technical assistance for upgrading companies and coordinating the network. Furthermore, the cluster facilitates the co-financing of the group’s activities by development partners, with the business network providing some of the necessary funding. The development of geographical indications will also provide protection on the international market for the product concerned, especially in Europe. In addition to the overall trade policies, Government would have to take steps to facilitate the access of products to the global market. To achieve this, the following actions would have to be undertaken:

  • - strengthening the capacities of trade promotion structures to support efforts to diversify the national economy by placing special emphasis on production standards and product quality, to ensure their competitiveness;

  • - facilitating access to public contracts by the national private sector, particularly SMEs/SMIs;

  • - facilitating access by Congolese products (Made in Congo) to the various markets (both domestic and foreign).

Promoting Regional Integration And International Cooperation

Strengths, Constraints And Challenges

969. The Congo is considered as a “Corridor” in the heart of Central Africa. It serves as a means of opening up Central African countries such as the Central African Republic and Chad. It serves as a bridge between the Central African region (CEMAC zone) of around 30 million people, and that of Southern Africa, particularly the Democratic Republic of Congo (DRC), which alone accounts for more than 60 million inhabitants, and the SADC region (with over 340 million inhabitants, including South Africa), as well as the countries of the East African Community (EAC, Uganda, Kenya, Tanzania, etc..).

970. In these formal trade arrangements, the Republic of Congo is a member of two regional integration organizations in Central Africa. It is a member of CEMAC, created in 1994 from the ashes of the Customs and Economic Union of Central Africa (UDEAC). CEMAC includes Cameroon, the Central African Republic, Gabon, Equatorial Guinea and Chad. The Congo is also a member of the Economic Community of Central African States (ECCAS), an older organization which includes, in addition to the six CEMAC countries, Angola, Burundi, Democratic Republic of Congo and São Tomé and Principe.

971. Compared to this position, the Congolese domestic market remains very narrow (about three million consumers), and this makes it impossible to strengthen competitiveness through economies of scale. This finding is a challenge to the Government and encourages it to deepen its policy of economic openness so as to conquer foreign markets, starting with the CEMAC and ECCAS sub-region. Moreover, it is through this that the highly desired industrialization and agricultural development will find the necessary support for the sustainability of activities in the field. The main objective is that of winning a market share that will allow Congolese companies to increase production scales necessary for the profitability of their activities The Congo is only able to increase the markets for these products and benefit from its position as a corridor by developing creative and aggressive strategies of cooperation and regional integration. The sections that follow are a review of the regional strengths and opportunities and an outline of the Congo’s competitive strategies. Apart from the opportunities offered by sub-regional integration, the Congolese Government is aware that there is certainly no bigger and more lucrative market than the global market, particularly that of rapidly growing emerging countries. It is therefore imperative for it to develop a competitive business strategy for the entire international market. To do this, the Government intends to promote multilateral agreements, especially with emerging countries, while also seeking to take advantage of existing agreements, such as the AGOA and the EPA currently being negotiated.

Strengthening International Trade Cooperation

972. Bilateral cooperation (between States). The Government is seeking to diversify trade agreements with different partners, taking into account the opportunities offered by each country or region. The selection criteria will focus on the receptiveness of the partner to work in a spirit of solidarity and mutual respect.

973. It is within this context that everything must be implemented to benefit greatly from the U.S. Growth and Opportunity Act (AGOA), which gives African countries south of the Sahara an opportunity to promote investment and increase trade. A national forum on AGOA is scheduled to be held in Brazzaville in 2012 to identify the Congo’s needs and to adopt a consensual roadmap for implementing cooperation programs. The Economic Partnership Agreement (EPA) under negotiation between Central Africa and the European Union, will also be an opportunity to seize, if, of course, the content of the Agreement to be signed by both parties is balanced and takes into account the needs of trade-off for loss of customs revenue and strengths the supply capacities of the States of the sub-region.

974. Multilateral cooperation. The Congolese Government is preparing to develop its national Aid Strategy for Trade, to generate the support needed from the donors involved in this initiative (World Bank, IMF, ADB, EU and other developed countries) to develop economic and commercial activities.

975. It should be recalled that Aid for Trade is an initiative of the WTO adopted at the 6th Ministerial Conference in Hong Kong from 13 to 18 December 2005, with support from the World Bank, UNCTAD, the International Trade Centre and various donors. Its main objective is to provide support to developing countries, especially to LDCs in capacity building related to trade, so as to take advantage of the opening up of markets.

Strengthening Integration Within The Cemac Zone

976. From a strictly commercial view point, even though the CEMAC zone is a customs union (internal circulation of goods free of customs duty), it does not yet offer to each Member State guarantees of the free movement of goods provided therein. There are many distortions in trade between members, mainly due to non-tariff barriers, often in the form of unwritten rules. This is aggravated by the spirit of protectionism that characterizes the respective economic policies of individual Member States, despite the guidelines adopted together at community meetings. It should be highlighted, in this regard, that the implementation of community acts suffers from a “lack of political will” which is very evident in the management of records relating to the free movement of goods and people. Consequently, despite the many declarations and protocols, little progress has been made and results have been far below expectations. Indeed, the share of intra-regional trade within CEMAC does not exceed 5% of foreign trade of member countries15 Exports from the Congo to CEMAC only represent 3% of intra-regional trade, destined mainly for Gabon and its imports, 43.6 %, made up mainly of food products from Cameroon. More generally speaking, in the case of ECCAS, intra-Community trade is insignificant and shows a downward trend.

977. Six factors account for the weakness of intra-community trade, be it within CEMAC or ECCAS: (i) insufficient efforts by member countries to remove barriers to intra-Community trade, particularly in the area of communications infrastructure, (ii) a trade policy that suffers from a weak industrial fabric, inadequate diversification and the dominant role of single production, (iii) insufficient financial resources, (iv) a lack of respect for treaty obligations, (v) the inability to prevent and resolve conflicts decisively, and (vi) the persistence of national self-interest with the corollary of numerous administrative controls that cause obstacles linked to the movement of people, goods and services, thereby furthering difficulties of access to markets by Member States.

978. In order to intensify integration and benefit from it, the Congo must work with its partners to strengthen the integration mechanisms already in place, by carrying out necessary adjustments, in particular:

  • - harmonizing the rates of customs duties actually applied by each Member State, and also taking into account exemptions. Failure to apply the same rates would distort competition within the community, insofar as it impacts on business competitiveness;

  • - combating double taxation: it is not uncommon to see goods imported from third countries and that have to go through the territory of a Member State to a final destination in another State, pay customs duties at each border, spurning the rules adopted by the community. This practice creates excess import costs for consumers in the country of final destination, with a direct effect on the purchasing power of household and business competitiveness;

  • - removing tariff and non-tariff barriers.- Protectionist measures taken by each Member State, in violation of community regulations, should be identified, evaluated and reviewed;

  • - harmonizing trade norms in the CEMAC zone;

  • - the free flow of market goods cannot be effective without the harmonization of trade norms for products on the market;

  • - creating common markets by product (case of the OCM - CEMAC SUGAR) to promote cooperation between the industries of the sub-region. The example of sugar (the CEMAC common sugar market organization) created at the initiative of the group of sugar producers in the CEMAC region (GPS) enabled the Congo to overcome the obstacles created by CAMEROON in 2006 to block the export of Congolese sugar to that country. Currently, over 50% of sugar produced by SARIS CONGO is sold in the sub-region (in CHAD and CAMEROON) through the facility put in place under the CMO -CEMAC SUGAR).

Strengthening Integration In The Ceeac Zone And In Southern Africa

979. At the level of ECCAS, the trade cooperation instruments established in 2004 as part of the creation of a free trade zone, are not working. Once again, there is a problem at this level due to of lack of political will by States, even though there is often an absence of a reliable trade-off mechanism for losses in customs revenue. It should be recalled here that there were plans to create a customs union within the ECCAS zone in 2008.

980. The way forward, in to take advantage of nearly a hundred million consumers that make up the ECCAS market, is to revive and enforce the Free Trade Agreement of 2004, applying the same measures selected for CEMAC for the harmonization of tariffs, elimination of tariff and nontariff barriers, the fight against double taxation and the issue of commercial standards. Taking advantage of sub-regional integration also implies a redefinition of clear rules of origin necessary for the application of preferential rates. The intensification of trade relations with the DRC and its membership of the SADC region, in particular, offer the Congo access to the booming market of Southern Africa. Indeed, Central African countries have political and economic relations with other regional economic communities and African regional organizations. Angola is a member of the SADC; Burundi of COMESA and EAC; the DRC of SADC and COMESA; Burundi and the DRC of CEGPL; the CAR and Chad of the CEN-SAD; Cameroon, Congo, Gabon, and EGR and Chad of CEMAC. These different affiliations should not undermine the willingness of these countries to participate in the integration process in Central Africa. For now, the affiliation of countries to several RECs remains a source of stress for the countries concerned because of the difficulties in honoring financial contributions to several RECs and ultimately belonging to more than one Customs Union (UD) at a time. Central Africa has great potential for economic development, with, in particular, oil from the Gulf of Guinea, large deposits of metals and minerals, the huge water resources from the Congo-Ubangi-Sangha basin and the large lakes, as well as the second largest forest massif, considered as the second lung of the planet. As such, the financial valuation of the absorption of 500 million tons of carbon monoxide for the benefit of all mankind, and offsetting emissions of this gas from other parts of the world, would be quite legitimate. Therefore any investment, especially in infrastructure, should take into account the preservation of the ecosystem and biodiversity of the region.

981. In addition, the dense inland waterways, with a very high potential, are underutilized and should be developed. They could be a complement, if not a substitute, for roads in some areas with multimodal alternatives, like in similar regions of Asia (Mekong Basin) and Latin America (Amazon Basin).

Implications For “Corridor” Policies: Border Markets

982. The aim of cross-border markets is to open foreign markets to Congolese products and improve supply to remote rural areas. This network will thus have the obvious role of sub-regional integration. The development of trade resulting from the creation of this network of markets will have a positive impact on the income of rural producers. Cross-border markets will be organized at two levels and linked by a regular periodic transport system: (i) in cities near the borders, and (ii) in other “strategic” sites.

983. In the border areas. Border markets will be located in areas near the border, easily accessible by road or river, both from the Congo and from neighboring countries. Infrastructure of an appropriate size for the area’s own products will be created and made available to producers and traders. Products from remote areas of the Congo could be routed directly or through regional group markets, for display and export.

984. In other core locations. Regional group markets will be set up in a few strategic locations. They will have larger infrastructure, with their characteristics and size depending on product characteristics and quantities. They will cater to border markets. They will also receive products collected in these markets for channeling to areas of consumption or to other borders. They will also strive to accommodate products from non-border areas to make them available to buyers from neighboring countries.

985. These two “poles” will be connected by transport systems on a regular basis to ensure proper disposal of products. This organization will, where possible, involve the private sector. It is nevertheless likely that governments will be involved, particularly as regards river transport, in order to create the correct conditions for the movement of goods.

986. In this context, the Government will implement an investment program for the creation and functioning of markets in Ouesso, Impfondo, Oyo and Dolisie.

987. Regional group market of Ouesso. The regional group market of Ouesso will be interconnected to the Souanké, Ngbala and Kabo border markets. Its role will be to display products for export to Cameroon and the CAR.

988. Regional group market of Impfondo. The regional group market of Impfondo will be interconnected to the border markets of Betou and Dongou. Its role will be to display products for export to the CAR and the DRC.

989. Regional group market of Oyo. The Oyo regional group market will be connected to the border markets of the Congo River located at Liranga, Loukolela, Mossaka, Bouemba Mpouya and Ngabe, on the border with the DRC. It will also be connected to the border market of Lékéty, towards the border with Gabon. In this way, the Oyo regional group market would be seen not only as a transit point for Congolese products going to these two countries, but also as an integration infrastructure for facilitating trade between Gabon and the DRC.

990. Its dual mission will be to channel the considerable food production from Gamboma in the south and Owando/Makoua in the north, on the one hand, and fishery products from the river and from Alima, on the other. Since fish is an important product in the area, this infrastructure, and its border annexes, will of course be equipped with cold storage facilities, but also with fishponds to accommodate species that can withstand prolonged captivity.

991. Cargo vessels will also be designed to receive frozen and live products and forward them within the time and conditions conforming to the required standards. In the event that the road connecting Liranga Impfondo is indeed built, the Liranga border market could develop into the status of a regional group market with privileged links on the one hand with Impfondo and Bangui by road or river, and on the other, with Oyo by river.

992. Regional group market of Dolisie. The Dolisie regional group market will be connected to the border markets of Mindouli, on the border with the DRC, Bambama, Mbinda and Nyanga on the border with Gabon, as well as to Tchamba-Nzassi Kimongo at the border with the Angolan province of Cabinda and will communicate with Bas Congo in the DRC. Its primary objective will be to channel the huge production in the Niari valley and Bouenza and make it available for export to the DRC, Gabon and Angola. Depending on the likely development of livestock in this area, it would be appropriate to provide this regional group market with a slaughterhouse and adequate cold storage facilities to make it a national meat center.

993. Based on a study of potential demand in neighboring countries, these regional markets should be interconnected to ensure adequate response to demand.

994. Complementarity with domestic markets. The organization of cross-border markets will be closely linked to the organization of product collection throughout the country, as this will be one of its components. It will be necessary to structure the collection of products for transfer to regional group markets or even for direct delivery to border markets. Similarly, this network of cross-border markets will, of course, be closely connected to the storage and major export facilities located in Brazzaville and Pointe-Noire.

Implications For “Corridor” Policies: Infrastructure

995. To benefit from integration, the Congo must: (i) improve the energy sector as part of the drive towards the regional integration of energy markets, (ii) improve navigability on the Congo River, especially along its tributaries, the Alima, the Ubangi and Sangha, as part of the corridors policy, (iii) fully rehabilitate the rail company, CFCO, to determine its traffic potential with the DRC and CEMAC countries and fully enjoy the opportunities offered by the modernization and extension of the Pointe-Noire Port Authority.

996. The Congo should place a particular emphasis on the key areas of intervention below in order to play its role fully as a transit country and draw the competitive benefits resulting from its comparative advantage in the field of transportation. To do this, the Congo must reduce the barriers linked to the low level of development of physical infrastructures by building corridors:

  • - the most interesting corridor in terms of investment is the one that starts from Pointe-Noire and connects timber concessions in northern Congo, owing to the improvement of inland waterways and railways;

  • - the road corridor from Brazzaville to Ouesso is also a highly attractive investment if it is associated with the development of rural roads;

  • - investment along the Pointe-Noire-Brazzaville corridor will be developed significantly if it is extended to the DRC (including the bridge) and/or to the CAR (including the river);

  • - restructuring of public utilities (water, electricity, telecommunications, etc.) should reduce costs and attract IDEs. Making investments in the energy sector will be more profitable, if done in coordination with Cameroon at a regional level;

  • - the Congo must make every effort to improve its management capacity and exploit all the opportunities offered by the public-private partnership in infrastructure management;

  • - the simultaneous implementation of all these interventions in the transport and electricity sectors should significantly improve Congo’s ranking in terms of regional integration.

997. Today, emphasis is being placed more on improving regulations for the recruitment of migrants in developing countries, on the creation of incentives to promote the return of migrants and on maximizing the contribution to development made by migrant communities, including the management of remittances. A comprehensive approach must necessarily include the following elements:

  • - ensuring the integration of migration in development frameworks and strategies against poverty;

  • - the effective management of remittances;

  • - the mobilization and involvement of the diaspora and transnational networks in development strategies;

  • - facilitating the return and reintegration of migrants;

  • - comprehensive and targeted assistance programs for labor-focused migration.

Table 44.Strategic position of the Republic of Congo and the potential to increase revenues.
Total tradeTax revenues
Volume (million tonnes per year)Value (US$ m. per year))Transport revenue (US$ m. per year)Customs revenue (US$ m. per year)VAT revenue (US$ m. per year)Total (US$ m. per year)
Imports
Actuals0.902,3296451212524
Additional potential total1.052,7187114213155
Potential Republic of Congo0.2564714033
Potential DRC0.802,0715714210152
Overall total1.955,04713565524679
Exports of wood
Actuals1.001,0007101313
Addition0.905507201313
Potential Republic of Congo0.2020022044
Potential DRC0.7035050099
Overall total1.901,55014402626

Chapter 10: Building Infrastructure

998. As explained above, building of infrastructure is one of the links in the chain of “virtuous circles” for the transformation and emergence of the Congo. However, these strategies, just as human resources, are costly, especially in terms of investment and maintenance costs. That is why, in the strategies proposed in the following sections of the DSCERP, special attention has been paid to innovations in financing these investments, particularly the various arrangements of the “public/private” type. Issues relating to the synchronization of investment programs (such as between railways, roads and river/sea) have also been examined with great attention. This is also the case with the significant regional opportunities in this area, by virtue of Congo’s position as “corridor” and frontier between Africa and West/Central, and East Africa.

999. As part of the implementation of the PRSP-1, as recalled above, the Government has made significant investment efforts for the development of basic infrastructure. However, because the Congo began very late after the crisis years of 1992 to 1997, it still has many challenges to face to achieve a minimum level of modernization of infrastructure, capable of pushing the Congolese economy to an emergence rate.

Development of Transport and Public Works Infrastructure

1000. With the accelerated growth of municipalities and the implementation of the National Transport Plan (NTP), the state of Congolese transport networks, all modes included, has improved considerably. However, because of large damages already identified during the development of the NTP, the level of service on most networks is still a concern.

Roads and Road Transport

Road infrastructure

1001. The Congo has a road network of 20 925 km divided into 5 569 km of national roads, 4 401 km of divisional roads, 7 380 km of rural roads and 3 575 km of urban roads. 9.4% of the network is tarred, with 2.8 % made up of urban roads, and 6.6 % of intercity roads. At 90,6%, the Congolese road network is thus still essentially made up of dirt roads. Added to this is a fleet of 7 158 crossings made up of bridges, viaducts, culverts and tanks.

Table 46.Congolese Road Network
N° Types of roadTarredOf earthTotal
Length in km.Network shareProportion in good conditionLength in km.Network shareProportion in good conditiorLength in km.Network shareProportion in good conditioin
1National highways9304,4%463922,2%5 56926,6%
2Divisional roads3081,5%4093