2.2.1 Monetary Poverty

31. Monetary poverty is inadequacy of income, which seriously limits consumer possibilities. Since the World Bank survey conducted in 1996 estimating the percentage of persons living below the poverty belt at 70%⁴, three studies carried out between 1998 and 2003 attempted, in part, to assess the level of poverty in the rural, semi-rural and urban areas.

32. According to these studies, the incidence of poverty would be around 50%⁵ in Congo, regardless of the year reviewed and the methods used. The per capita GDP, which dropped from US$ 1,100 in 1990 to US$ 630 in 2001⁶, is another indicator that shows the deterioration of the situation over the last decade.

33. Worsening of poverty is mainly due to the wars that have destroyed the economic tissue, and inappropriate economic policies and mismanagement of public affairs. The situation deteriorated everywhere and was worse still in areas most affected by the war and its consequences.

34. The devaluation of the CFA Franc in 1994, which resulted in higher prices for food and public services, is among the factors that contributed to worsening the economic situation of the Congolese people. With the price control department powerless in the face of the price hikes in primary necessities, inflation rose from 4.9%⁷ in 1993 to 42.4% in 1994. It dropped to 9% in 1995 and 10.2% in 1996. This corresponds to an overall price increase of 71% between 1994, the year of devaluation of CFA, and 1996. The inability of local products to substitute imports led to the decline in the purchasing power of households. With no compensatory measure in place, the salaries of Congolese workers fell 27.5%. Moreover, with the Congolese economy being little diversified, the expected positive impact on economic growth and public finance as a result of devaluation failed to materialize.

2.2.2 Human Poverty

35. Poverty is a multi-dimensional phenomenon that unevenly affects the socio-economic groups and the various districts of the country.

2.2.2.1 Poor Access to Social Services

36. Regarding access of population groups to social services, the 2002 Post Conflict Interim Program made the following observations: (i) the poor state of health, sanitation and basic education services had contributed to reducing the standard of living of population groups and worsened poverty; and (ii) the degradation of the environment had led to an upsurge in endemic diseases (malaria, respiratory and diarrhea diseases, typhoid fever, intestinal parasitic diseases and skin diseases, especially among the most disadvantaged population groups. Also, in spite of significant investments channeled into the anti-AIDS campaigns, in the post conflict program, the HIV/AIDS prevalence rate has remained high.

2.2.2.1.1 Poor Access to Educational Services

37. Though Congo was among African countries with the highest level of education in the 1980s, its enrollment rate has declined and the quality of its educational system has deteriorated. In fact, at the primary education level, the gross enrollment rate (GER) which was only 33% in 1960, increased to 100% in 1978, shot up to 121% in 1984 and 126% in 1990. However, due mainly to the various armed conflicts that occurred in the 1990s, the GER has gradually dropped from 107% in 1996 to only 49% in 1999. Several reasons account for this: (i) increase in the cost of education which limits the access of poor families to educational services; (ii) inadequate and degradation of educational infrastructure and equipment; (iii) teachers abandoning the classrooms for more lucrative sectors; (iv) the fall in the level of qualification of teachers; (v) low level of investment spending as compared to operating costs (mainly salaries); (vi) low level of early childhood education and (vii) imposition of levies on families by parents’- teachers’ associations.

38. The figures indicated in the table below are a real reflection of the educational expenditure situation.

Table 1:

Educational Budget Trend in Relation with the National Budget

(in CFAF millions)

Source: 2001 Congo Balance Sheet (BISOC) published in February 2004

Table 1:

Educational Budget Trend in Relation with the National Budget

(in CFAF millions)

Year / Budget	Current			Investment			Total
	1999	2000	2001	1999	2000	2001	1999	2000	2001
National Budget	222.400	323788	NA	91650	158250	190337	314050	482038	-
Educational Budget	45751	55344	NA	4161	4316	80034	49912	459660	-
Percentage of the sector	20.57%	17.09%	NA	4.54%	2.73%	42.5%	15.89%	12.38%	-

Source: 2001 Congo Balance Sheet (BISOC) published in February 2004

View Table

Table 1:

Educational Budget Trend in Relation with the National Budget

(in CFAF millions)

Year / Budget	Current			Investment			Total
	1999	2000	2001	1999	2000	2001	1999	2000	2001
National Budget	222.400	323788	NA	91650	158250	190337	314050	482038	-
Educational Budget	45751	55344	NA	4161	4316	80034	49912	459660	-
Percentage of the sector	20.57%	17.09%	NA	4.54%	2.73%	42.5%	15.89%	12.38%	-

Source: 2001 Congo Balance Sheet (BISOC) published in February 2004

39. Apart from the afore-mentioned causes, there are other factors: (i) training-employment mismatch; (ii) gender imbalance at the secondary school level, which is due to the school drop out rate among girls; (iii) lack of a statistical framework, which makes it difficult for appropriate decisions to be taken; (iv) divestiture of the State from the educational sector thus contributing to reducing the success chances of children from deprived communities and (v) the lack of new information and communication technologies and social assistance in schools.

40. From 2000, with the gradual restoration of peace, children have started attending school. In 2002, the GER was estimated at 78%, although the rate for girls in rural areas was 4% to 6% lower. The enrollment rate in the pre-school educational centers is very low, stagnating at less than 5%. Only children from well-off social categories in the urban areas have access to preschool education. The education of the child, therefore, depends to a large extent on the income of the parents.

41. In terms of literacy and non-formal education, efforts made have increased the literacy rate from 32.1% among men and 13.2% among women in 1990 to 71.6% and 48.2%, respectively, in 1998. However, these data are below the average rate for developing countries (80.3% for men and 64% for women). Thus, in spite of recent efforts, 40.5% of Congolese are illiterate and women are the most affected (51.8%). On the whole, we observe a quite low geographical distribution of education infrastructure, a drop in the number of schools, and their strong concentration in urban areas. In the rural areas, the distance between schools and dwelling places (an average of one primary school in a radius of 14 kilometers) makes it difficult for most children to have access to education⁸.

2.2.2.1.2 Poor Access to Services and Quality Health Care

42. In spite of the right to health (health protection of individuals and the right of access of everyone to medical care) guaranteed by the constitution of the Republic of Congo and the existence of a wide and dense network of health structures, the performance of this sector is unsatisfactory.

43. The quality and quantity of health service delivery has deteriorated due to: (i) the closure, deterioration and destruction of healthcare facilities, particularly in the rural areas, and the obsolete nature of bio-medical and medico-technical equipment; (ii) the quasi permanent lack of drugs and consumables; (iii) inadequate trained staff and refresher training policy; (iv) little cooperation with NGOs and the private sector; (v) wrong human resource deployment; (vi) beliefs (witchcraft, superstition); and (viii) partial application of the national health policy and health development plan.

44. This situation is further compounded by a shortage of medical doctors and medico-technical specialists in the urban integrated health centers. Furthermore, the services of private practitioners are expensive and have the tendency of luring patients away from public laboratories and health structures.

45. These apparent inadequacies, coupled with the deterioration of sanitation, health and environmental conditions, account, in part, for the persistence of certain diseases such as malaria (a major cause of morbidity and mortality among children under five years), acute respiratory infections, HIV/AIDS and tuberculosis. They are also responsible for the upsurge in the endemic outbreak of leprosy, yaws, onchocerciasis and the emergence of certain diseases such as the EBOLA viral hemorrhagic fever, monkey pox, BURULI ulcer and trypanosomiasis.

46. A National Heath Development Program (NHDP) covering the period 1992-1996 was adopted. It aimed at: (i) improving the health situation of population groups through strengthening the district health system; (ii) increasing the national health delivery coverage to provide at least 80% of the population with quality primary health care, and (iii) building the national health system management capacities. However, the manner in which this program was implemented was unsatisfactory owing to the socio-political upheavals and its overly ambitious character given the resources that could be mobilized by the country.

47. Vaccination coverage for the six preventable diseases under the Expanded Program of Immunization (EPI) dropped from 90% in the 1990s to less than 50% in 2000. This drop places Congo below the sub-regional and regional average.

48. The fall in life expectancy at birth is evidence of wide-spread mortality and ever-increasing poverty. The infant and maternal rate is much higher than the average: general mortality is 14 per 100,000 compared with infant mortality of 81 per 100,000 and live births of 1,100 per 100,000. AIDS has become a serious public health problem. The national HIV/AIDS prevalence rate for 2004 is 4.2%. This rate, however, does not reflect the disparities among major cities where the rate ranges between 5% and 10% and may even reach 20% among prostitutes. These disparities are due to the uneven distribution of healthcare across the country, with the major cities having better services than the rural areas.

2.2.2.1.3 Poor Social Coverage

49. The Congo is emerging from a long decade of socio-political crisis and armed conflicts that have caused a variety of social ills, such as street children, child soldiers, teenage mothers, children killed or injured by war, and massive population displacement, particularly in the cities where security is more of a problem than in the rural areas. All this has led to a breakdown of the traditional family system and to dysfunctional social structures, which harm the most vulnerable strata of society. The situation has resulted in a clear increase in the number of persons requiring special protective measures.

50. In light of this, the Ministry of Social Welfare and a High Commission for the Integration of the Youth were established to help these people reintegrate into society both professionally and socially. No study has yet been conducted to allow for assessing the activities of these two ministerial departments.

51. In any case, the inadequacy of the safety net is manifest. The KAP⁹ survey on child care attests that 87.1% of respondents acknowledge that the management of disabled children is handled by the family and 77.4% approved of this practice for orphans and abandoned children¹⁰.

52. Concerning social security, the situation is characterized by an acute shortage of money and irregularity of pension payments. This phenomenon is the result of the low rate of debt recovery, the failure to reconstruct the index file of employers and pensioners as well as the lack of real accounting and financial statements. Senior citizens are abandoned by families and public authorities in spite of the existence of a constitutional provision that protects them (Article 30 of the 2002 Constitution). Hence, families are increasingly shirking their responsibilities, mainly because of their declining purchasing power and social prejudice. Medical and social facilities are quasi-nonexistent or inoperative.

2.2.2.1.4 Poor Access to Employment

53. The employment crisis and related problems, especially among youth, is the result of mismanagement of public enterprises, improper socio-economic policies, structural adjustment programs embarked upon since 1985, and the consequences of recurrent wars during the 1990s. The shrinking of the labor market in all sectors of the economy limits the possibilities of Congolese to earn a living, leading to a rise in unemployment particularly among the youth.

54. It is currently difficult to quantify the scope of unemployment for lack of reliable national data. However; in 1994, the unemployment rate, estimated at 30.9%¹¹; provides a sufficiently clear picture of the scope of the unemployment crisis in the Congo. Furthermore, an analysis of the employment trend reveals a wide gap between growth in the active population and job availability in both the public and private sectors. Between 1984 and 1992, the number of job losses was staggering reaching about 23,700.

55. Several factors account for the low job availability and the obstacles youth encounter when seeking employment: (i) a poorly diversified economy and the low dynamism of the stakeholders; (ii) corrupt administration of the labor market; (iii) failure of the structural adjustment policies; (iv) training-employment mismatch; and (v) failure of public investments.

56. The informal sector is an alternative solution to unemployment. This sector that is fast expanding, particularly in the major cities where the majority of the active population is concentrated, does not solve the jobless problem as such. It contends with indifference on the part of public authorities, lack of organization and qualification of its stakeholders.

57. Women, the disabled and, particularly, young people with no vocational training are the most affected by unemployment.

2.2.2.1.5 Little Consideration for Gender Dimension

58. Women are the most affected by, and the most vulnerable to poverty. The mismanagement of public enterprises, ineffective socio-economic policies, structural adjustment programs and recurrent wars have all seriously worsened the problem, particularly among widows, who have become bread-winners without being able to have access to viable resources.

59. Though women account for 52%¹² of the total population and are mostly engaged in agriculture production and thus play a determinant socio-economic role, their influence in social and political life is almost zero. They are under-represented in the decision making structures, the least literate, particularly vulnerable to HIV/AIDS, receive inadequate maternal health, and have limited access to credit.

60. Apart from the moral issue of social justice, an all-out integration of gender in all sectors is a developmental challenge. ‘’Gender inequalities are costly not only to women but also to children and several men. It leads to a decline in production (GDP), a low level of human resource development, leisure activities and a low welfare situation¹³”. Also ‘’gender disparity hampers development’’¹⁴

61. It has also been established that the reduction and removal of gender disparities and inequalities, investment in activities carried out by women, and a better recognition of their rights make it possible to improve the quality of life, reduce infant and maternal mortality and the spread of HIV/AIDS and poverty.

62. Poverty eradication cannot be achieved without taking all the human resources into account. The significant contribution of women to poverty reduction should be affirmed and recognized at the national level. It is therefore important to lay emphasis on the socio-cultural dimension of gender by taking the inequalities as determinants of poverty in order to ensure a better consideration of women in all the sectors.

63. Thus, for a better integration of women into public life, the government intends to increase their involvement and presence at all levels, from the decision making structures to the management of public resources.

2.2.3 Poor Access to Basic Infrastructure

64. Access to basic infrastructure and services is analyzed in the transport, energy, water, telecommunications and communications as well as the financial services sectors because of their impact on economic development and the living conditions of population groups.

2.2.4 Poor Access to Water Resources

77. The Congo has immense hydroelectric and gas potential estimated, respectively, at 2,500 MW and 120 billion m³. However, only the Moukoukounou (74 MW) and Djoué (50 MW) hydroelectric plants are operational. Electric power is also provided by mini diesel operated plants established in most of the major towns and some districts, producing power ranging from 100 to 1000 KVA. The Pointe Noire Gas Plant, with a 25 MW capacity, also provides electric power

78. The population also relies on power generators as power breakdowns and power cuts are frequent. Power shortage is due to: (i) lack of fuel and spare parts; (ii) obsolete and/or destroyed infrastructure during the socio-political upheavals; and (iii) bad financial and human resources management at the SNE (the power company).

79. With inadequate national production, Congo imports power from DRC. These imports cover 50% of the power requirements of the country. However, the present supply is far below the real requirement. Energy shortfall is a real obstacle to the implementation of projects and initiation of all sorts of activities.

80. An analysis of the situation of the potable water and sanitation sector highlights the unsafe supply conditions to both urban and rural populations. This is mainly due to advanced obsolescence of equipment and the absence of a water resource management policy. In communities supplied by SNDE (National Water Supply Company), the output of the network is low, the billing system inefficient and payments received insufficient.

2.2.5 Poor Access to Telecommunications

81. In the area of telecommunications, the Congo has a very low density of land lines (less than one line per 100 people) and one of the most expensive systems in the region. The postal network is also very defective. Since 1997, the establishment of three mobile phone operators has provided service to major urban centers. A restructuring program of the Post and Telecommunication sector is on-going.

82. The problem facing the information and communications sector is a shortage of equipment and poor human resource management. Furthermore, communication structures are unevenly distributed across the country because the few media that exist are concentrated in the major towns. Rural populations have virtually no access to the media or outside information.

83. This worsens poverty if one agrees that ‘’the feeling of being excluded from decision making at the local and national levels’’ is one criterium of poverty. Hence the communication structures, particularly the media, are unable to assist citizens in enhancing their sense of responsible citizenship.

84. The difficulties that journalists face in accessing sources of information and new information and communication technologies explains, inter alia, the mismatch of the content of the information in relation to the expectations of the people. The lack of communication structures is exacerbated by the lack of human, financial and material resources as well as the inadequacies of the laws governing the communication sector. Furthermore, it has been worsened by the armed conflicts that destroyed communications infrastructure. On top of that HIV/AIDS led to the loss of qualified personnel, a decline in output, and a slow down in the transfer of knowledge.

2.2.6 Poor Access to Financial Services

85. Regarding access to financial services, it should be acknowledged that the Congolese banking system experienced a major crisis characterized by the closure of the ‘’Banque Commerciale Congolaise (BCC), the Banque Nationale pour le Développement du Congo (BNDC) and a tight cash flow situation for a majority of surviving banks, such as the Union Congolaise de Banque (UCB), Banque Internationale pour le Développement du Congo (BIDC) and Crédit pour l’Agriculture, l’Industrie et le Commerce (CAIC).

86. These financial institutions have been privatized. However, in spite of the privatization, financial services are not accessible to everyone. In fact, the procedures and conditions for granting credit are unsuited to the socio-economic needs and characteristics of the poverty-stricken population, thereby excluding a significant number of people from the formal financial system. The problem is worsened by the successive bankruptcies of the postal savings services, the national savings bank and especially the collapse of the first mutual savings and credit association, particularly cooperative savings and credit (COPEC).

87. Before 1990, the Congo had limited experience in micro finance. Only mutual funds existed across almost the entire country. Through their services and particularly their proximity, these structures gradually restored the confidence of savers, as they had instituted a type of micro credit that was more adapted to their needs.

88. Thus, a huge network of micro credit institutions is developing across the country, notably the network of women’s savings and credit associations that is gradually being established with the assistance of the United Nations Development Program. These institutions offer three types of financial products: (i) saving services; (ii) short term micro credit (i.e. loans of small amounts) for household consumption; and (iii) investment credit services for micro enterprises. On this account, micro credit institutions are an adapted tool that makes it possible for the poor but hard working people to take advantage of economic opportunities and improve their standard of living. These institutions therefore contribute to reducing the incidence and scope of poverty.

2.2.7 Poor Access to Housing

89. Since independence, the State has built only 2,000¹⁵ public housing units (excluding the housing stock of the State) and no public housing program has been implemented. This inefficient system of public housing delivery failed to meet the needs of the population. As a result, people embraced a self-help housing system that made it possible to build 218,000 houses (98% of the national housing supply). However, housing needs are far from being satisfied. In the two major cities of the country (Brazzaville and Pointe Noire), housing demand is estimated at 13,550 units per year versus an annual delivery of just 2,000 units.

90. In urban areas, the situation is characterized by a high disparity between city central suburbs, which are well resourced and less populated, and the suburbs which are under equipped and very densely populated. Furthermore, in squatter settlements, where the lack of basic equipment and infrastructure is obvious, living conditions are very unsafe. Finally, urban management remains vague with little concern for a healthy environment.

91. In rural areas, apart from the conflict zones where many houses have been destroyed, the problem is seen mainly in terms of quality of housing because the cost of good quality building materials is too high for most farmers. The major obstacles to overcoming this are: weak regulations; limited supply and high cost of building materials; inadequate financing mechanisms; and little interest in developing and using local materials.

2.3.1 Governance

93. Good governance may be defined as the ability to efficiently and rationally manage public resources. It may also be defined as the ability to ensure sustainable human development.

94. This diagnostic study focuses on good political, institutional and administrative governance. The problems identified are the following: (i) crisis of administration, State authority and control; (ii) wrong and inadequate allocation of available human, material and financial resources; (iii) worsening of corruption and fraud; (iv) lack of coordination among the various administrations involved in economic management; (v) inappropriate contract awarding procedures; and (vi) the duality of the contract awarding system.

2.3.2 Debt¹⁶

95. For almost two decades now, the Congo has been facing heavy debt. In fact, public debt is so great today that it’s a major obstacle to the economic recovery of the country. Debt servicing alone absorbs almost half of the budgetary revenue.

96. As of 30th April 2004, the overall outstanding debt was estimated at 4,417 billion CFA Francs, of which 3,861 billion CFA Francs was for foreign debt (or 87% of total debt) and 556 billion CFA Francs for internal debt (13%). Debt due to members of the Paris Club tops the list with 58% of outstanding debt. Debt due to private banks account for 19% of debt outstanding and that due to multilateral donors accounts for 10%. The debt ratio over the GDP is equal to or above 200% and per capita indebtedness is very high.

97. The untenable level of arrears on external debt (estimated at 2,920 billion CFA Francs) remains an obstacle to the normalization of relations with Congo’s creditors. The situation that has just been described clearly illustrates the urgency of Congo to employ all possible means to be eligible for the Heavily Indebted Poor Countries (HIPC) initiative. Access to this initiative would provide significant debt relief and thus kick-start the economy and reduce poverty more efficiently. It is in this connection that the

98. Government is working towards:

1. concluding a Poverty Reduction and Growth Facilities (PRGF) arrangement with the IMF;

2. ensuring regular servicing of its debt;

3. normalizing its relations with major multilateral and bilateral creditors.

99. It is important to note that failure to access HIPC initiative would seriously mortgage the economic future of the Congo.

100. Non-payment of the internal debt is also a major obstacle to the resumption of economic activities. It is therefore of outmost importance to quickly sort this all out within the framework of a program to be concluded with the international community in general and the IMF in particular.

2.3.3 Security and Peace

101. The notion of security is multidimensional. It may be defined as the assurance that citizens can live in an environment free of all threats and risks of violence. This assurance is guaranteed through a regular functioning of the specialized government structures responsible for protecting persons and institutions, and maintaining order and general peace. Security also involves promotion and defense of human rights.

102. With regards to security the major problems identified are the following: (i) absence of the rule of law; (ii) illegal ownership and widespread circulation of weapons; (iii) upsurge in sexual violence; (iv) drug trafficking and consumption; (v) indigence and deterioration of the socio-economic fiber; (vi) increasing unemployment and worsening social exclusion, insecurity and vulnerability; (vii) lack of food health control; (viii) poor prevention, management and settlement of conflict; and (ix) limited cooperation among the public, private and civil society organizations.

103. Peace may be defined as the situation of tranquility where the public authorities have taken all the necessary measures to peacefully prevent and resolve all types of conflicts both internally (peaceful co-existence of citizens and the national communities) and externally (peaceful co-existence with other States). At this level, the key problems identified are: (i) ownership of weapons by a cross-section of youth; (ii) difficulty in implementing peace agreements reached by conflicting parties; (iii) loose border controls; (iv) difficulty in establishing social dialogue; and (v) insufficient promotion of human rights.

2.3.4 Oil Sector

104. With a daily offshore production of about 250,000 to 260,000¹⁷ barrels of crude oil (90 million to 100 million barrels annually), the Congo is fourth among oil producers in Sub Saharan Africa, after Nigeria, Angola and Equatorial Guinea. The State manages the oil sector through the Ministry for Hydrocarbons in collaboration with SNPC. Revenues derived from this sector are of paramount significance in as far as they account for 66% of public revenue, over 50% of the GDP and almost 90% of export earnings.

105. However, the population has benefited little from these resources. There are many reasons for this: (i) the non-centralization of the oil revenue at the National Treasury which makes it difficult to control related expenses; (ii) lack of transparency in the management of the financial flows. (The confidentiality clause contained in production sharing contract forbids the publication of information concerning the execution of these contracts. The tax stability clause enables oil companies to enjoy tax and customs exemption until 2029, the year the last permit expires.); (iv) non-involvement of the State in the management of oil terminals; (v) the decline in production and the holding in trust of areas whose crude oil potential is not economically viable for the major oil companies; (vi) pronounced absence of local private business men in the sector; (vii) the disadvantage on the part of the State in the marketing of its share of the crude oil; (viii) pollution related to oil activities with few Congolese being skilled in the oil profession; (x) difficulties related to petroleum products supply; and (xi) the high level of oil-collateralized debt.

2.3.5 Forestry Sector

106. Sixty percent of the total land area of the Congo (almost 20 million hectares) is covered by forest, 80% of which are considered commercially productive. Available timber is estimated at 170 million m³. Harvesting potential is 2 million m³ per year without compromising forest regeneration capacity. Furthermore, the country has roughly 53,000 hectares of eucalyptus, pines and limbas plantations, capable of supplying 4 million m³. The Congo also has abundant and diversified plant and animal resources made up of 6,500 plant species and 200 mammals, over 700 bird species, 45 species of reptiles and over 632 insect species. Exploitation of non-timber forestry products (fruits, legumes, meat, honey, and fish) is still carried out by the informal sector. In spite of this enormous potential, the Congo derives limited benefits from its forest resources.

107. The socio-economic upheaval that the country experienced in the 1990s destroyed much of the timber processing industry. Traditional low-cost methods of transporting forestry products, for example, had to be replaced by higher cost options. A lengthy 1,300 km road was built to link Pokola (Northern Congo) to the Port of Douala (Cameroon) because of the unreliability of the rail-river connection. This seriously raised the selling prices of harvested timber. In the South of the country, this forced many forestry operators to fold, causing job loss and worsening poverty.

108. This industry faces other problems. First, the rich forests are being damaged as poor rural inhabitants struggle to survive. They take trees for fuel or to sell on the black market. Many practice slash and burn agriculture to survive. And the perpetual hunt for protein puts pressure on plants and animals, endangering protected species. These practices contradict sustainable management of the forest ecosystem and the conservation of biodiversity. Finally, the low level of education and training coupled with the lack of a work ethic hampers sound organization of the forestry industry.

109. The second problem has to do with inadequate human resources in forestry administration and the wood industry. The low remuneration of forestry staff is hardly motivating and often exposes the latter to corruption and fraud. Most industry workers come from neighboring countries.

110. The third problem has to do with inadequate financial resources allocated to this sector, making it difficult for the State to support the investments made by the timber processing companies. Schools, dispensaries, bridges, roads, and the like are all in short supply. When work sites are closed down, the local population is left on its own.

2.3.6 Rural Development, Water, Sanitation and Environment Sectors

111. At independence, the Congo was predominantly an agriculture country. In the 1960s, 80% of the population earned a living from agriculture against 40% today. Though total land area available for cultivation is estimated at 10 million hectares, less than 2% was under cultivation from 1978 to 1990¹⁸. Currently, the economic crisis is seriously felt in the agriculture sector. Its share of GDP dropped from 27.13% in 1960 to 11.69% in 1980 and by 1997 to just 9.57%.

112. The causes of this decline are attributed to inconsistent policies, inadequate and unsuitable institutional support, serious deterioration of rural infrastructure and rural exodus. In spite of various agriculture programs, various mobilization campaigns (e.g., Food Self-sufficiency by the year 2000 and Agriculture--Priority of Priorities) and consultation-discussions (National Agriculture Council). Dependence on imports has increased and food shortage has only worsened. The sudden divestiture of the State from the productive sector in May 1986 had a very negative impact on rural population because the private sector was unprepared to take over the following three types of agriculture activities:

• - traditional farming, which accounts for 81% of the total land area cultivated;

• - sedentary farming in the suburbs;

• - farms and ranches.

113. Agriculture in the Congo today is limited to farm house production, which focuses mainly on subsistence food crops. Mostly men (87%) against women (13%) are engaged in livestock farming, which is the preserve of old people. Heavy livestock farming is exclusively done by men while women are involved in backyard livestock farming.

114. Fishing is an important sector after agriculture and livestock farming. Though the Congo has immense fish resources (80,000 tons per year from maritime waters and 100,000 tons per year from river waters, its expansion is hampered by several problems, including instability, obsolete means of production and scarcity of infrastructure.

115. Aquaculture, which is mainly oriented towards pond fish-farming, is done by small farmers. State-owned operations are in advanced stages of deterioration.

116. The Congo is rich in water resources, whether rain, surface or underground. In spite of these endowments, the rate of coverage of the potable water supply system is insufficient. In 2000, it was only 40.7%¹⁹ in the urban areas. Potable water production and distribution has since 1967 been ensured by the National Water Distribution Company (SNDE), established by Law 15/67 dated 15th June 1967. In spite of Government efforts to procure equipment during the five year plan (1982 - 1986) and the international decade for potable water and sanitation (1980-1990), the national potable water coverage has not improved. The plant and equipment of SNDE are in a very bad state and break down for long periods of time. Of an estimated demand of 100 million m³ only 40 million m³ are supplied to the urban population, which covers only 40% of the total demand.

117. In rural areas, the situation is much more alarming. Water supply structures, mainly made up of wells fitted with manual pumps, treated sources, cement tanks and rain water reservoirs, are insufficient and the majority of them have broken down as a result of excessive use and lack of maintenance. The potable water supply coverage is around 14.5%²⁰. For lack of modern water supply structures, people draw water from streams and rivers, whose quality cannot be determined. As a result, health risks are high.

118. Concerning the environment, the situation is characterized by a very pronounced degradation of the ecosystem and national resources as result of shifting slash and burn agriculture, deforestation in areas close to towns, poaching, unsound fishing practices, pollution of marine and national waters, and all sorts of environmental nuisances in the urban and rural areas.

2.3.7 Private Sector

119. The political decision taken in 1964 to make the State the major investor and employer was a major obstacle to the development of local private initiative. Since the colonial era, the private sector remains dominated by foreign communities that are organized in a united manner, and by nationality.

120. The gradual divestiture of the State from the productive sectors that started in 1986 without any supportive measures, failed to expand the private sector or to create new stakeholders.

121. The economy lost its bearings during the socio-political conflicts of the 1990s and the ensuing massive destruction of infrastructure. Social imbalances broadened, while unemployment rose, particularly among the youth and poverty incidence increased.

122. The embryonic state of the financial system, the very restrictive institutional, legal, judicial and tax environment, lack of basic infrastructure, are the major obstacles to development of the private sector. Other constraints hampering private initiatives including inadequate infrastructures and the poor state of manufacturing and engineering industries.

123. Also missing is an entrepreneurial culture and tradition while a mismatch persists between training policies and real market needs. Other obstacles include heavy taxation, lengthy administrative procedures and many often obsolete rules and regulations pertaining to economic activities. Finally, the Congo has no research and development policy, and the sub-regional, and regional environment is fraught with tensions and unrelenting crises.

124. Financial constraints that the private sector faces are of two types. The first is the absence of development banks and the weakness of the banking sector. However, the restructuring of the banking system now underway should improve the situation. The second constraint is the absence of (i) a mechanism for protecting depositors against the shortcomings of the national banks and (ii) instruments for mobilizing savings and financing SMEs and SMIs.

125. Finally, economic constraints also hamper the development of SMEs and SMIs. These constraints are: (i) the departure of several Congolese economic operators overseas (they abandoned their companies); (ii) suspension of relations with development partners; (iii) destruction of economic infrastructure; (iv) absence of specific measures to reactivate, promote and develop an SMEs/SMIs fabric; (v) lack of local private businessmen in the oil sector; and (vi) the reluctance of economic operators to invest in primary and secondary sector SMEs and SMIs.

2.3.8 Civil Society

126. In the Congo, social capital grew in scope with the 1991 National Sovereign Conference that opened up the country to pluralism of opinions. Since then, a civil society has emerged and is operating within the difficult context of the new democratic environment, strewn with recurrent conflicts that have adversely affected the social fiber.

127. Social capital consists of several networks of NGOs and associations. However their number is suspicious because of overlapping activities. Most of them, in fact, operate in different areas thereby artificially inflating their numbers.

128. In spite of difficulty in fully playing its role in the development process, civil society is increasingly called upon to conclude partnerships with the public authorities. Still, current partnership opportunities are often reduced to mere invitations to participate in activities, without the real consideration of the scope of their missions. Meanwhile, the implementation of these missions requires significant resources that these organizations do not have.

129. In several cases, the NGOs act as public authorities or are simply off-shoots of political groups. This type of structure stifles the development of real partnerships because they usually originate from a personal initiative.

130. It is observed that even though spheres of dialogue and partnership opportunities exist, they are still not well developed owing to: (i) the difficulties in determining the relations existing among the various platforms and public authorities; (ii) lack of sectoral dialogue structures; (iii) persistence and reproduction of the interventionist society model; and (iv) a general lack of the appropriate skills and resources to successfully implement the partnership policy.

131. Making the activities of these new non-State stakeholders (CSO and the private sector) more efficient and involving them in the poverty reduction process is therefore a priority. However, for social capital to become an agent of development capable of contributing fully to nation building, getting involved in the management of economic and social policies and in the areas of peace-building and democracy, civil society should learn to organize and structure itself within a coordinated structure that would federate the various networks.

2.3.9 Institutional Framework and Procedures

132. The crucial problem facing ministerial departments is the lack of qualified personnel and very demoralizing working conditions.

133. The institutional problems stem from the non-compliance with management procedures and the lack of reliable statistical data to formulate coherent economic policies.

134. The lack of coordination of actions and the lack of functional links among the various administrations involved in economic management is an obstacle to the implementation of micro-economic and coherent sectoral policies. The situation is the same for coordination, which does not foster the application of rational criteria in the choice of projects defined according to sectoral priorities. Public investment programming, particularly social projects financed with oil revenue, is held up by poor project identification, monitoring, control and evaluation. The planning units (DEP) within the technical departments generally play a minor role that needs to be reviewed.

135. The synergy between the Ministry of Economic Affairs, Finance and Budget, and the Ministry of Town and Council Planning and Economic Integration should be reinforced through New Information and Communication technologies (NICT) that enhance information flow.

136. The lack of a management plan makes it difficult to plan continuous training and efficiently deploy personnel within the civil service. The problems encountered are related to the obsolete nature of equipment, particularly computer hardware and software that are most often unsuited to the needs of a functional administration. The lack of coordination of the statistical system often results in an unhelpful mixture of economic and social information.

137. Limited financial resources, coupled with poor management, is responsible for the problems related to processing, disseminating and integrating data into micro-economic and sectoral policy analysis. In turn, this makes it impossible to have real decision-enhancing tools (operating reports, economic budgets, poverty monitoring-evaluation indicators, an investment timing and evaluation system, etc.). The lack of such instruments makes it difficult to control the economy and to make medium-term allocation of resources.

3.1.1 Consolidation of Security and Peace

141. The Congo is emerging from a decade of political instability marked by three civil wars that claimed many human lives, triggered major population exodus and caused the destruction of entire villages, buildings, infrastructures and production units.

142. Within this context, it would be impossible to envisage the implementation of development or poverty reduction programs without the consolidation of peace and the strengthening of conflict prevention mechanisms.

143. The strategy includes the following components:

• Strengthen the national demobilization plan;

• Implement conflict prevention, management and resolution mechanisms;

• Strengthen consultation in the design and implementation of policies and programs.

144. The following actions will be undertaken:

• Disarm and reintegrate militias;

• Retrieve arms;

• Fund economic projects presented by the ex-militias;

• Organize peace promotion campaigns;

• Intensify border control measures;

• Pay salaries, scholarships and pensions on a regular basis;

• Ratify and promote treaties and agreements relating to human rights;

• Create consultation frameworks.

3.1.2 Promotion of Good Governance

145. The perpetual lack of transparency of public resource management, coupled with even greater fraud and corruption in the wake of successive budgetary adjustments, demand good governance as a measure for combating poverty. Thus, four governance goals have been adopted as part of the national strategy to combat poverty.

They are:

• Promote good economic governance;

• Promote decentralization and participation of grassroots communities;

• Reform of the State;

• Enhance transparency in public affairs management.

3.2.1 Strengthening the Macro Economic Framework

166. Strengthening the macro economic framework is a key condition for poverty reduction. This should include cautious management of public finances, to improve the financial situation and reduce the external debt to sustainable levels. The following table highlights key trends for Congo’s financial operations:

Table 2:

Summary of the State’s Financial Operations between 2003 and 2007

Source: DGE, IMF, 2004

Table 2:

Summary of the State’s Financial Operations between 2003 and 2007

	2003	2004	2005	2006	2007
Total revenue (annual growth rate as %)	6.6	17.7	19.3	-8.7	-2.0
Oil revenue (annual growth as %)	6.1	22.2	22.8	-15.7	-6.9
Non-oil revenue (annual growth as %)	4.4	11.1	8.5	9.1	8.7
Total expenditure (annual growth as %	-18.7	-0.3	9.4	2.5	2.5
Current expenditure (annual growth as %)	-16.4	-2.2	5.1	0.6	0.5
Capital expenditure (annual growth as %	-25.8	6.2	23.3	7.6	7.9
Primary balance- to- GDP ratio (as %)	6.7	10.1	13.2	9.0	7.3
Investment- to- GDP ratio (as %)	22.9	22.9	22.7	23.0	24.0
Self-financed investment -to- GDP ratio (as %)	5.4	5.6	5.7	5.9	6.1
Official external debt- to- GDP ratio (as %)	182.3	-	-	-	-
Funding gap in billions of CFA		2472.6	63.6	47.9	64. 3

Source: DGE, IMF, 2004

View Table

Table 2:

Summary of the State’s Financial Operations between 2003 and 2007

	2003	2004	2005	2006	2007
Total revenue (annual growth rate as %)	6.6	17.7	19.3	-8.7	-2.0
Oil revenue (annual growth as %)	6.1	22.2	22.8	-15.7	-6.9
Non-oil revenue (annual growth as %)	4.4	11.1	8.5	9.1	8.7
Total expenditure (annual growth as %	-18.7	-0.3	9.4	2.5	2.5
Current expenditure (annual growth as %)	-16.4	-2.2	5.1	0.6	0.5
Capital expenditure (annual growth as %	-25.8	6.2	23.3	7.6	7.9
Primary balance- to- GDP ratio (as %)	6.7	10.1	13.2	9.0	7.3
Investment- to- GDP ratio (as %)	22.9	22.9	22.7	23.0	24.0
Self-financed investment -to- GDP ratio (as %)	5.4	5.6	5.7	5.9	6.1
Official external debt- to- GDP ratio (as %)	182.3	-	-	-	-
Funding gap in billions of CFA		2472.6	63.6	47.9	64. 3

Source: DGE, IMF, 2004

167. This table shows that oil and non-oil revenue will fall, respectively, by 1.4% and 0.1% between 2005 and 2007. The first trend is explained by a fall in oil production. This notwithstanding, oil revenue will represent a significant share in the funding of the economy particularly the social sectors, which will require huge resources to combat poverty.

168. The development of the non-oil sector will be better than that of the oil sector. This will result from the impact of measures already taken to maximize tax revenue and revive economic activity particularly in the forestry, agriculture, and manufacturing sectors. The results expected in the non-oil sector will emanate from the economic diversification strategy envisaged. Increases in total expenditure will average 4.8% over the 2005-2007 period. This increase is attributable to public expenditure rationalization measures.

169. An analysis of the above table shows that the financial situation will be tight in 2004 and 2007 following the obligation to settle external arrears, which cannot be rescheduled because of high debt service. The funding gap will amount to CFAF 2472.6 billion in 2004; 63.6 billion in 2005; 47.9 billion in 2006 and 64.3 billion in 2007. These funding gaps cannot be filled without exceptional treatment of the arrears not subject to rescheduling and budgetary support from Congo’s development partners.

170. The sector-based breakdown of the operating budget shows that the social sector will be the greatest beneficiary of resources. The share of resources to be allocated to it will increase from 12.54% in 2004 to 25.25% in 2005. This level will remain constant up to 2008. The trend is mainly explained by huge resource outlays for health and education. Infrastructures and rural development, which impact directly on poverty reduction, will experience increased resource allocations over the period.

Table 3:

Sector-Based Operational Budgetary Projections²¹

(in millions of CFAF)

Source: CNLP/STP 2004

Table 3:

Sector-Based Operational Budgetary Projections²¹

(in millions of CFAF)

SECTORS	2003		2004		2005		2006		2007
	Actuel	%	Forecast	%	Forecast	%	Forecast	%	Forecast	%
Infrastructure	3.24	1.05	7.05	2.30	6.73	2.07	7.08	2.11	7.30	2.13
Social sectors	102.58	33.10	111.32	36.34	124.42	38.31	128.00	38.19	130.81	38.15
Productive Sectors	8.47	2.73	10.22	3.34	12.11	3.73	12.39	3.70	12.63	3.68
Public Finance & Management	71.39	23.04	51.32	16.76	47.43	14.60	47.90	14.29	48.42	14.12
Sovereignty	53.74	17.34	61.07	19.94	134.09	41.29	139.82	41.71	143.74	41.92
Sub-total	239.42	77.26	306.29	100.00	324.77	100.00	335.20	100.00	342.90	100.00
Others	11.00	3.55	0.00	0.00
TOTAL	309.87	100.00	306.29	100.00	324.77	100.00	335.20	100.00	342.90	100.00

Source: CNLP/STP 2004

View Table

Table 3:

Sector-Based Operational Budgetary Projections²¹

(in millions of CFAF)

SECTORS	2003		2004		2005		2006		2007
	Actuel	%	Forecast	%	Forecast	%	Forecast	%	Forecast	%
Infrastructure	3.24	1.05	7.05	2.30	6.73	2.07	7.08	2.11	7.30	2.13
Social sectors	102.58	33.10	111.32	36.34	124.42	38.31	128.00	38.19	130.81	38.15
Productive Sectors	8.47	2.73	10.22	3.34	12.11	3.73	12.39	3.70	12.63	3.68
Public Finance & Management	71.39	23.04	51.32	16.76	47.43	14.60	47.90	14.29	48.42	14.12
Sovereignty	53.74	17.34	61.07	19.94	134.09	41.29	139.82	41.71	143.74	41.92
Sub-total	239.42	77.26	306.29	100.00	324.77	100.00	335.20	100.00	342.90	100.00
Others	11.00	3.55	0.00	0.00
TOTAL	309.87	100.00	306.29	100.00	324.77	100.00	335.20	100.00	342.90	100.00

Source: CNLP/STP 2004

171. Poverty reduction requires significant resource channeling into investment. In this regard, the State will allocate 70% of its resources to public investment. The money will be invested in productive sectors in order to improve the standard of living.

Table 4:

Projected Public Investment (Total Resources)

(in millions of CFAF)

Source: CNLP/STP 2004

Table 4:

Projected Public Investment (Total Resources)

(in millions of CFAF)

	2003*		2004*		2005		2006		2007		2004-2007
SECTORS	Actuel	%	Forecast	%	Forecast	%	Forecast	%	Forecast	%	Forecast	%
Sovereignty	27468.2	14.52	23116	16.15	29867.1	16.92	29829	15.70	28540	13.92	111352.1	15.58
Infrastructure	77744.3	57.67	44829	31.33	72953	41.33	75849.3	39.92	79291	38.68	272922.3	38.19
Productive Sectors	3981.2	2.95	11008	7.69	18913.9	10.72	20879	10.99	25534	12.46	76334.9	10.68
Public Finance & Management	13515.9	10.03	11931	8.34	15271	8.65	16602.5	8.74	17924	8.74	61728.5	8.64
Social sectors	9360.6	6.94	20687	14.46	29587.5	16.76	36345.5	19.13	43315	21.13	129935	18.18
Decentralisation		0.00	20569	14.37		0.00		0.00		0.00	20569	2.88
Sub-total	132070.2	97.97	132140	92.34	166592.5	94.39	179505.3	94.47	194604	94.93	672841.8	94.16
Road Fund	2729.8	2.03	10960	7.66	9905	5.61	10500	5.53	10400	5.07	41765	5.84
TOTAL	134800	100.00	143100	100.00	176497.5	100.00	190005.3	100.00	205004	100.00	714606.8	100.00

Source: CNLP/STP 2004

View Table

Table 4:

Projected Public Investment (Total Resources)

(in millions of CFAF)

	2003*		2004*		2005		2006		2007		2004-2007
SECTORS	Actuel	%	Forecast	%	Forecast	%	Forecast	%	Forecast	%	Forecast	%
Sovereignty	27468.2	14.52	23116	16.15	29867.1	16.92	29829	15.70	28540	13.92	111352.1	15.58
Infrastructure	77744.3	57.67	44829	31.33	72953	41.33	75849.3	39.92	79291	38.68	272922.3	38.19
Productive Sectors	3981.2	2.95	11008	7.69	18913.9	10.72	20879	10.99	25534	12.46	76334.9	10.68
Public Finance & Management	13515.9	10.03	11931	8.34	15271	8.65	16602.5	8.74	17924	8.74	61728.5	8.64
Social sectors	9360.6	6.94	20687	14.46	29587.5	16.76	36345.5	19.13	43315	21.13	129935	18.18
Decentralisation		0.00	20569	14.37		0.00		0.00		0.00	20569	2.88
Sub-total	132070.2	97.97	132140	92.34	166592.5	94.39	179505.3	94.47	194604	94.93	672841.8	94.16
Road Fund	2729.8	2.03	10960	7.66	9905	5.61	10500	5.53	10400	5.07	41765	5.84
TOTAL	134800	100.00	143100	100.00	176497.5	100.00	190005.3	100.00	205004	100.00	714606.8	100.00

Source: CNLP/STP 2004

172. Infrastructures will receive the bulk of appropriations. Resource allocations to rural development and the social sector will increase gradually from 2004 to 2006. This increase is attributable to the fact that these sectors have a direct link with poverty reduction²².

Pro-poor expenditures

173. More than half of Congo’s population is poor. Hence the government has decided to increase appropriations for expenditures that would improve the living standards of the poor. The key elements of Government’s anti-poverty strategy are: (i) basic health and fight against AIDS; (ii) basic education; (iii) Basic infrastructure and opening up remote isolated areas; (iv) electricity, water and sanitation; (v) disarmament, demobilization, reintegration, and appropriate food and barracks for the troops; (vi) social protection and employment; and (vii) agriculture

174. Although pro poor expenditures will increase between 2005 and 2007, their share of total expenditures and revenue will remain below 30%. Nevertheless, Government’s effort is significant: the share of pro poor expenditures in total expenditures will increase from 16.59% in 2005 to 21.28% in 2006 and 25.58% in 2007.

175. Overall, the share of pro poor expenditures in the budget will go from 26.64% in 2005 to 38.75% in 2007. Pro poor investment as a share of the budget should grow faster than any other budget category, increasing by 1.94 percentage point between 2004 and 2005. This share would reach 19.55% in 2006 and 22.027% in 2007. The share of goods and services is 2.94% in 2004 and would reach 5% in 2005 and 7.88% in 2007. The share of pro poor expenditures under transfers and common charges is not important as these expenditures remain below the 6% mark.

176. The projected increase in pro-poor expenditures under common charges, transfers and goods and services is due to the fact that the first year of the program will be devoted to rehabilitating education and healthcare infrastructure. These will result in higher spending on equipment in 2005. After 2005, spending on goods and services will continue to grow, but at a slower pace than in the program’s first year, to support construction of new schools and healthcare facilities.

177. The share of pro poor expenditures under common charges in the budget will also increase from 1.3% of the budget in 2004 to 5.11% in 2007. Finally, the share of pro poor expenditures under transfers will increase from 1.36% in 2004 to 3.76% in 2007

178. Two strategies are envisaged for strengthening the macro-economic framework:

• Rationalizing public finances through increased revenue and expenditure control;

• Strengthening public expenditure management.

179. Both strategies have in common the following measures

• Maintain strict budget discipline with respect to public revenues and expenditures;

• Continue non-oil income mobilization by strengthening anti-fraud and tax evasion measures, controlling discretionary tax exemptions, broadening the tax base, and improving tax administration;

• Comply with prudent budgetary rule regarding projected oil price and revenue;

• Increase resource allocations to priority sectors under the PRSP;

• Reform the current procurement system:

• Provide adequate support to the Hydrocarbon Unit in the Ministry of Finance and to the Hydrocarbon Ministry

• Computerize the public expenditures system

• Strengthen execution, control, monitoring and evaluation of public investments.

Table 5:

Pro-poor Expenditure Programming from 2004 To 2007

(Unit: billions of CFAF)

Source: General Department of the Budget (2004)

Table 5:

Pro-poor Expenditure Programming from 2004 To 2007

(Unit: billions of CFAF)

Category of Spending	2003		2004		2005		2006		2007
	Actual	%	Forecast	%	Forecast	%	Forecast	%	Forecast	%
Wages	120.20	25.92	124.50	25.81	130.00	24.91	134.00	24.65	138.10	24.46
Pro-poor	38.34	8.27	39.84	8.31	44.85	8.59	49.27	9.06	53.37	9.45
Other	81.86	17.65	84.66	17.50	85.16	16.32	84.74	15.59	84.74	15.01
Goods and services	49.98	10.78	55.80	11.50	61.57	11.80	70.20	12.91	74.40	13.18
Pro-poor	11.15	2.40	14.93	3.10	19.44	3.73	26.55	4.88	33.73	5.97
Other	38.08	8.21	40.87	8.59	42.13	8.07	38.15	7.02	33.72	5.97
Miscellaneous	42.80	9.23	52.90	10.90	55.52	10.64	58.40	10.74	61.70	10.93
Pro-poor	6.97	1.50	10.20	2.10	14.87	2.85	17.77	3.27	21.87	3.87
Other	35.83	7.73	42.70	8.80	40.65	7.79	40.63	7.47	39.83	7.05
Transfers	139.70	30.13	126.00	26.10	133.20	25.53	131.00	24.10	130.40	23.10
Pro-poor	0.30	0.06	0.74	0.15	5.69	1.09	11.27	2.07	16.09	2.85
Other	139.40	30.07	125.27	25.95	127.51	24.44	119.73	22.03	114.31	20.25
Investissement	111.00	23.93	123.10	25.50	141.50	27.12	150.00	27.59	160.00	28.34
Pro-poor	26.66	5.75	44.28	9.20	63.70	12.21	79.90	14.70	94.29	16.70
Other	84.34	18.18	78.82	16.30	77.80	14.91	70.10	12.90	65.71	11.64
TOTAL	463.67	100.00	482.30	100.00	521.79	100.00	543.60	100.00	564.60	100.00
Total Pro-poor	83.41	9.93	109.99	14.83	148.55	19.87	184.75	24.92	219.34	29.40
Total Other	370.49	63.59	363.03	58.85	373.24	55.21	353.35	49.41	338.31	44.91
Total Primary Spending	463.67	73.52	482.30	73.68	521.79	75.09	543.60	74.34	564.60	74.31
Current Primary Spending	352.67		359.20		380.29		393.60		404.60
GDP	2072.00		2316.00		2502.00		2540.00		2617.00
Revenue	613.50		717.20		851.70		771.60		754.50
Expenditure	581.50		613.00		625.00		636.10		647.30
Pro-poor/GDP %	4.03%		4.75%		5.94%		7.27%		8.38%
Pro-poor / Revenue %	13.60%		15.34%		17.44%		23.94%		29.07%
Pro-poor/Expenditure %	14.34%		17.94%		23.77%		29.04%		33.89%

Source: General Department of the Budget (2004)

View Table

Table 5:

Pro-poor Expenditure Programming from 2004 To 2007

(Unit: billions of CFAF)

Category of Spending	2003		2004		2005		2006		2007
	Actual	%	Forecast	%	Forecast	%	Forecast	%	Forecast	%
Wages	120.20	25.92	124.50	25.81	130.00	24.91	134.00	24.65	138.10	24.46
Pro-poor	38.34	8.27	39.84	8.31	44.85	8.59	49.27	9.06	53.37	9.45
Other	81.86	17.65	84.66	17.50	85.16	16.32	84.74	15.59	84.74	15.01
Goods and services	49.98	10.78	55.80	11.50	61.57	11.80	70.20	12.91	74.40	13.18
Pro-poor	11.15	2.40	14.93	3.10	19.44	3.73	26.55	4.88	33.73	5.97
Other	38.08	8.21	40.87	8.59	42.13	8.07	38.15	7.02	33.72	5.97
Miscellaneous	42.80	9.23	52.90	10.90	55.52	10.64	58.40	10.74	61.70	10.93
Pro-poor	6.97	1.50	10.20	2.10	14.87	2.85	17.77	3.27	21.87	3.87
Other	35.83	7.73	42.70	8.80	40.65	7.79	40.63	7.47	39.83	7.05
Transfers	139.70	30.13	126.00	26.10	133.20	25.53	131.00	24.10	130.40	23.10
Pro-poor	0.30	0.06	0.74	0.15	5.69	1.09	11.27	2.07	16.09	2.85
Other	139.40	30.07	125.27	25.95	127.51	24.44	119.73	22.03	114.31	20.25
Investissement	111.00	23.93	123.10	25.50	141.50	27.12	150.00	27.59	160.00	28.34
Pro-poor	26.66	5.75	44.28	9.20	63.70	12.21	79.90	14.70	94.29	16.70
Other	84.34	18.18	78.82	16.30	77.80	14.91	70.10	12.90	65.71	11.64
TOTAL	463.67	100.00	482.30	100.00	521.79	100.00	543.60	100.00	564.60	100.00
Total Pro-poor	83.41	9.93	109.99	14.83	148.55	19.87	184.75	24.92	219.34	29.40
Total Other	370.49	63.59	363.03	58.85	373.24	55.21	353.35	49.41	338.31	44.91
Total Primary Spending	463.67	73.52	482.30	73.68	521.79	75.09	543.60	74.34	564.60	74.31
Current Primary Spending	352.67		359.20		380.29		393.60		404.60
GDP	2072.00		2316.00		2502.00		2540.00		2617.00
Revenue	613.50		717.20		851.70		771.60		754.50
Expenditure	581.50		613.00		625.00		636.10		647.30
Pro-poor/GDP %	4.03%		4.75%		5.94%		7.27%		8.38%
Pro-poor / Revenue %	13.60%		15.34%		17.44%		23.94%		29.07%
Pro-poor/Expenditure %	14.34%		17.94%		23.77%		29.04%		33.89%

Source: General Department of the Budget (2004)

3.2.2 Revamping of Key Sectors

180. In view of the need to boost growth and diversify the economy, it is necessary to focus on a number of sectors likely to resuscitate growth and development, Including the oil and forestry sectors.

181. The objective during 2005-2007 is to achieve real GDP growth of 6% a year. This rate is less than the estimated 7% to 8% rate necessary to reduce the level of poverty by 2007. However it is a realistic goal, in view of (i) growth constraints that cannot be removed in the short term, notably weak infrastructure, and (ii) a lack of sector strategies in most areas. A more in-depth growth sector analysis will be presented in the final PRSP.

Table 6:

Macro-Economic Growth Targets

(Unit: percentage)

Source: DGE, IMF, 2004

Table 6:

Macro-Economic Growth Targets

(Unit: percentage)

	2003	2004	2005	2006	2007
Real GDP	0.8	4.0	9.2	4.7	4.1
Real GDP of the oil sector	-7.2	2.0	17.4	3.6	1.5
Real GDP of the non-oil sector	5.3	5.0	5.1	5.3	5.5

Source: DGE, IMF, 2004

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Table 6:

Macro-Economic Growth Targets

(Unit: percentage)

	2003	2004	2005	2006	2007
Real GDP	0.8	4.0	9.2	4.7	4.1
Real GDP of the oil sector	-7.2	2.0	17.4	3.6	1.5
Real GDP of the non-oil sector	5.3	5.0	5.1	5.3	5.5

Source: DGE, IMF, 2004

182. The projected 2005-2007 growth rates will be mainly due to by the oil sector. Attainment of a 6% average growth rate will result from 7.5% average growth in the oil sector and 5.3% in the non-oil sector. To attain these goals will require the following strategies:

• Improve transparency and governance in the oil and forestry sectors;

• Develop the rural economy by expanding agriculture, livestock and fish production;

• Foster private sector development;

• Develop micro-finance.

3.3.1 Education

202. The long period of upheaval, accentuated by armed conflicts and ineffectively managed liberalization, compounded the structural crisis besetting the educational system. To improve access to quality education, the following actions need to be carried out:

• Increasing the education and research budget;

• Building institutional capacity of pedagogical and supervision units;

• Strengthening statistical data gathering and processing;

• Promoting literacy and non- formal education;

• Strengthening regional and sub-regional cooperation.

203. These actions, in turn, would require to:

• Regularize use of volunteer teachers;

• Reduce education costs;

• Recruit and train more teachers;

• Provide scientific and technical equipment;

• Rehab and build more schools;

• Supervise private schools;

• Encourage involvement of parents in the management of schools;

• Expand the school canteen program, especially in the rural areas;

• Review teacher qualifications in light of current needs.

3.3.2 Health

204. The Congo now has a national health policy that should lead to significant improvement in the standard of living for the poor. Worsening health conditions is mainly attributable to infectious diseases, such as malaria and tuberculosis. Special emphasis should therefore be put on these two diseases. It is unlikely that an anti-malaria drug would be available in the near future. For this reason, proven preventive methods should be used.

205. The major goals to be pursued include:

• Continuing with the prevention of the most endemic diseases and the promotion of good health practices;

• Improving quality healthcare access;

• Building the operational capacities of the Health Information System (SNIS);

• Reforming the national drug policy to ensure a regular and sustainable procurement of essential generic drugs and vaccines.

206. The actions advocated include:

• Rehabilitating and building health centers to ensure nation-wide health coverage;

• Designing an aggressive procurement policy for basic drugs;

• Improving the distribution of healthcare personnel;

• Promoting private medicine;

• Promoting and strengthening community participation in the management of health centers;

• Promoting and supporting traditional medicine.

3.3.3 Hygiene, Sanitation and Quality Water Supply

207. The difficulty facing the population in accessing safe water and the lack of sanitation contribute to their low standard of living.

208. Sanitation has deteriorated over the years despite the programs implemented since 1982. The dumping of refuse in the streets, the silting of sewage networks, the lack of waste water treatment stations in the main human establishments and the precarious conditions of excreta evacuation cause environmental pollution and lead to the proliferation of disease.

209. With regard to sanitation, the coverage rate was approximately 14% in the urban areas and 7% in the rural areas in 2000. The precarious nature of safe water and basic sanitation services impacts negatively on the standard of living and deepens poverty. Prevention, which presupposes sanitation and hygiene measures, is one of the most effective methods of combating malaria.

210. Poverty provides a very fertile ground for the development of tuberculosis. The particularly humid equatorial climate is an aggravating factor. A link has also been established between the upsurge in tuberculosis and HIV/AIDS, which are the biggest killers in the Congo.

211. The strategy mainly consists of:

• The development and building of the institutional, human and material capacities;

• The empowerment of the communities in the rural and peri-urban areas in the construction and management of sanitation structures;

• The development of education campaigns by local NGOs;

• Efforts to combat malaria and tuberculosis.

212. The strategy will involve, inter alia:

• The rehabilitation, strengthening and construction of water supply and sanitation infrastructures in the rural and urban areas;

• The drainage of run-off water;

• The treatment of waste water from hospitals, hotels and restaurants, factories, commercial structures and households;

• The rehabilitation of hygiene and sanitation services;

• The education of the public on matters of hygiene and sanitation;

• The distribution on a large scale of the impregnable mosquito net;

• The destruction of mosquito breeding grounds;

• The collection of household wastes;

• Sensitization campaigns against tuberculosis;

• The intensification of the expanded immunization program.

3.3.4 Social Welfare and Employment

213. The various structural adjustment programs with their unmitigated social costs, the armed conflicts which the Congo has experienced, HIV/AIDS, the precarious living conditions, waning traditional solidarity, the deterioration of formal social security, have made a large segment of the Congolese population vulnerable.

214. The general objective is to improve significantly the conditions and standard of living of vulnerable populations by a quality social welfare scheme. Concerning public infrastructure works, a special effort will be made to use labor intensive technologies. It has also been envisaged to promote a dynamic employment and vocational training policy.

215. It is within this context that the national policy provides for:

• The legal and socio-economic protection of distressed women and girl-mothers;

• The socio-economic integration of disaster stricken people, displaced persons and ex-combatants;

• The social and economic integration of the disabled and other minorities;

• Strengthening of community-support action;

• Building the capacities of NGOs, communities and families for the management of vulnerable persons;

• Pension scheme reform;

• A dynamic employment policy;

• Promotion of self-employment and small businesses programs;

216. The following actions are envisaged:

• Organization of sensitization campaigns, popularization of the culture of peace, democracy, human, children and women’s rights;

• Putting in place a violence-monitoring mechanism;

• Setting up the disabled integration assistance fund;

• Setting up of an integration assistance fund for the pygmies;

• Training of beneficiaries of small entrepreneurs in management;

• Creation of a solidarity fund in favor of vulnerable persons;

• Regularization of pensions and settlement of arrears;

• Improving collection of social welfare contributions;

• Conducting a survey on employment;

• Promotion of micro-project financing institutions;

• Support to the rehabilitation and creation of vocational training centers.

3.3.5 Gender

217. With regard to gender, the main objective is to improve the social, cultural, economic and political status of women. The strategy to do so will consist of:

• Strengthening equal access to education;

• Designing, adopting and implementing a national gender policy;

• Sensitization of decision makers and the public to gender-related matters;

• Building capacity of the women’s promotion department, as well as the NGOs and associations involved in gender promotion.

218. The following actions are envisaged:

• The creation of an information system on gender-related matters;

• The promotion of male-female equality with regard to employment and services;

• Promotion of maternal and child healthcare.

3.4.1 Transport

220. The Government envisages, under the National Transport Plan (PNT): (i) to rebuild and restore the transport system as quickly as possible to help revive economic activity; (ii) develop road networks; and (iii) involve the private sector through concession granting and privatization.

221. The transport strategy aims at:

• Developing basic infrastructure;

• Opening up the hinterland and unifying the national territory;

• Restoring the country’s transit status in Central Africa.

222. The following actions are to be undertaken:

• Rehabilitating the main national road networks;

• Maintaining rural tracks;

• Rehabilitating railways (CFCO, COMILOG);

• Securing rail transport;

• Procuring railway equipment;

• Improving air navigation safety;

• Improving inland water navigation;

• Adapting barges to the transport of cut-up logs and developing the container depot at the Brazzaville harbor;

• Dredging the Brazzaville, Makotipoko and Mossaka harbors;

• Implementing the Pointe Noire Port and Harbor Authority Development Master Plan.

3.4.2 Energy

223. With regard to electricity, despite considerable potential, access to adequate and cheap energy is very limited. It is therefore envisaged to improve the access rate in the urban (50%) and rural areas (5%) and to increase it to 95% in the towns and 70% in the countryside.

224. To this end, the sector’s strategy is to:

• Rehabilitate energy infrastructures and build new ones;

• Promote electricity supply throughout the country.

225. The resultant actions are as follows:

• Rehabilitation of the national electricity grid;

• Restoration of the operational capacity of the power utility, (the Société Nationale d’Electricité, SNE);

• Establish the Rural Power Utility (the Agence Nationale d’Electricité Rurale, ANER).

3.4.3 Telecommunications

226. The diagnosis of this sector shows that both urban and rural dwellers alike face difficulty in accessing telecommunications. The general objective is to improve the people’s access to telecommunications in the rural and urban areas. The strategy is to implement the national telecommunications coverage program.

227. The actions to be taken are as follows:

• Development of the telephone network;

• Restructure the telecommunications sector and create an independent regulation authority) to facilitate the presence of private operators;

• Restructure the postal services.

3.4.4 Housing

228. The housing policy instituted by the State since independence did not achieve the expected results. No program has been pursued for several years. Since state-sponsored housing failed to meet the needs of the people, a self-building approach was taken. However, access is limited.

229. To facilitate access to housing, the current strategy consists of promoting low-cost housing units by:

• Putting in place a reliable and sustainable housing funding system;

• Supporting production of local building materials;

• Putting in place a social housing construction program.

3.4.5 Urban Management

230. Urban living conditions are characterized by an imbalance between inner city neighborhoods, which are sparsely populated and benefit from efficient infrastructures, and the peripheral neighborhoods, which are over- populated and characterized by a lack of basic socioeconomic amenities. In order to make the urban environment pleasant to all segments of the population, the Congo wants to improve the living conditions. The strategy for a sound urban management includes the following priority actions:

• Updating of urban development policies;

• Rehabilitation of the urban road network and the opening of link roads in the dense and inaccessible neighborhoods and the newly-created zones;

• Putting in place of an efficient urban environmental management strategy;

• Supporting small-scale urban enterprise;

• Improving urban governance and the of collection of local taxes.

4.2.1 Participatory Approach

240. In keeping with the spirit and letter of the I-PRSP, which is designed mainly to revive the Congolese economy and alleviate poverty, the government will introduce a system for monitoring and evaluating the Poverty Reduction Strategy in close collaboration with social and economic development stakeholders involved in the process. The Permanent Technical Secretariat will establish a national network, which will also serve as a framework for exchanging experiences and information. That network will enable the government to observe the interaction and views of (stakeholders, individuals, civil society, NGOs, community-based organizations, religious denominations, etc.). The network will facilitate assessment of progress made on poverty reduction.

4.2.2 Capacity Building

241. Participatory follow-up and evaluation of the I-PRSP cannot be achieved without a capacity-building program for the different participants and the government. development partners will be asked to support such program.

242. With regard to statistics, the government is soliciting support from foreign partners to assure regular production of key indicators. There is also a need to foster coordination between the CNSEE, DGPD and the DEPs to facilitate collection of social statistical data.

243. A short-and medium-term plan of action will be drawn up and a three-year operational program prepared, giving priority to producing indicators to monitor the Poverty Reduction Strategy, and track progress towards the Millennium Development Goals (MDG).

4.2.3 Monitoring and Evaluation of the I-PRSP

244. The I-PRSP monitoring and evaluation system has three components:

• Monitoring Poverty;

• Monitoring implementation of the I-PRSP;

• Evaluating outcomes of the Poverty Reduction Strategy.

245. 1.) Monitoring Poverty

This component will provide regular information on poverty trends and dynamics. Generally, it will rely on well being and standard of living indicators typical of the disadvantaged population. The indicators will relate to the Gross National Product (GNP), the rate of growth of the economy, and agricultural output since agriculture remains a major source of employment and income for the poor.

246. 2.) Monitoring implementation of the I-PRSP

Monitoring implementation aims at measuring to what extent the priority objectives have been attained and budget allocation and execution are on track.

247. 3.) Assessing the outcomes of the I-PRSP

The outcome of the poverty reduction policies, programs and projects will be assessed.