Front Matter

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© 2008 International Monetary Fund

June 2008

IMF Country Report No. 08/173

Republic of Congo: Staff-Monitored Program

This paper on the staff-monitored program for Republic of Congo was prepared by a staff team of the International Monetary Fund as background documentation for the periodic consultation with the member country. It is based on information available at the time it was completed on March 28, 2008. The views expressed in this document are those of the staff team and do not necessarily reflect the views of the government of the Republic of Congo or the Executive Board of the IMF.

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Staff-Monitored Program

Prepared by the African Department

(In consultation with other departments)

Approved by Sharmini Coorey and Anthony Boote

March 28, 2008

  • A staff team visited Brazzaville during February 12-20, 2008 to discuss an economic and financial framework that could be supported under a Staff Monitored Program (SMP). The staff met with President Sassou N’Guesso, Prime Minister Mvouba, Senior Planning Minister Moussa, Minister of Finance Issoïbeka, BEAC National Director Dzon, other senior officials, representatives of the donor community, civil society, and the media. The staff team consisted of Messrs. York (head) and Bessaha, and Ms. Karpowicz (all AFR), Mr. Eschenbach (PDR), Mr. Martin (FAD), and Mr. Moussa (resident representative). Mr. Kudiwu (OED) and staff from the World Bank also participated.

  • The authorities have consented to the publication of this staff report, the Letter of Intent, and the Memorandum of Economic and Financial Policies on the Fund’s website. The Congo’s relations with the Fund and the World Bank, and statistical issues are detailed in an informational annex accompanying this staff report.


  • Executive Summary

  • I. Background

  • II. Recent Developments

  • III. Staff Monitored Program

    • A. Economic Policies for 2008

    • B. Risks to the Program

    • C. Program Monitoring

  • IV. Staff Appraisal

  • Box

  • 1. Performance Under the 2007 Staff Monitored Program

  • Tables

  • 1. Selected Economic and Financial Indicators, 2006–10

  • 2. Central Government Operations, 2006–08

  • 3. Monetary Survey, 2006–08

  • 4. Medium Term Balance of Payments, 2006–10

  • 5. Millennium Development Goals, 1990–2015

  • Figures

  • 1. Oil Prices, Exports, and Real GDP Growth, 2002–08

  • 2. Inflation Developments, January 2005–December 2007

  • 3. Real Effective Exchange Rate and Real Oil Price, 2002–07

  • 4. Fiscal Developments, 2002-08

  • Appendix

  • I. Letter of Intent

    • Attachment I: Memorandum of Economic and Financial Policies

    • Attachment II: Technical Memorandum of Understanding

Executive Summary

Recent Developments and Program Performance

Overall economic activity declined in 2007, reflecting a temporary fall in oil production caused by an accident at an important oil platform (Nkossa). However, robust growth continued in the non-oil sector driven by domestic demand, and inflation moderated. Despite the decline in oil exports, the external position improved as a result of a debt restructuring agreement with London Club creditors.

In June 2007, Fund management approved a staff monitored program (SMP) for the Congo covering April-September 2007. Policy implementation under this SMP was not satisfactory and a track record of performance that could have supported a move back to the Poverty Reduction and Growth Facility was not established. Macroeconomic and structural policy implementation was unsatisfactory largely because the program was poorly monitored, ownership was weak, and pressures to spend intensified as world oil prices continued to rise.

To foster stronger program ownership and increase the likelihood of success, the authorities established a new organizational structure to manage relations with the Fund and to monitor the program. The new structure has resulted in a greater degree of cooperation than in the past; data provision and information was timely and extensive, and the quality and level of participation in the discussions were at a high level.

Economic Policies for 2008 Under the Staff Monitored Program

Satisfactory performance under the new SMP, which covers the period January 1 through June 30, 2008, could pave the way for a new PRGF arrangement and eventual debt relief under the enhanced HIPC Initiative. The program aims to move Congo toward fiscal and external sustainability. The economic and financial framework includes:

  • Fiscal consolidation, to rollback previous slippages and to restore the credibility of the budget as the key fiscal instrument; and

  • Structural reform to enhance public financial management, governance, transparency, and the management of natural resources.

The program faces two main risks. The first stems from concerns surrounding ownership and the authorities’ willingness to implement key structural measures. The second concerns weaknesses in public financial management and control that have led to persistent fiscal slippages in the past.

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Staff–Monitored Program—Informational Annex

Prepared by the Staff Representatives for the Request for a Staff Monitored Program

Approved by Sharmini Coorey and Anthony Boote

March 28, 2008


  • Annexes

  • I. Relations with the Fund

  • II. Relations with the World Bank Group

  • III. Statistical issues

Republic of Congo: Staff-Monitored Program
Author: International Monetary Fund