The Executive Board of the International Monetary Fund (IMF) today completed the second review of the Republic of Congo’s economic performance under a three-year Poverty Reduction and Growth Facility (PRGF) arrangement. The completion of the review enables a third disbursement of SDR 1.21 million (about US$1.95 million), bringing total disbursements to Congo under the program to SDR 3.63 million (about US$5.84 million).
The IMF Executive Board approved a three-year PRGF arrangement for Congo in December 2008 in an amount equivalent to SDR 8.46 million, or 10 percent of Congo’s quota in the Fund, in support of the government’s economic program for 2008-2011 (see Press Release 08/311).
Following the Executive Board’s discussion of the Republic of Congo, Mr. Murilo Portugal, Deputy Managing Director and Acting Chair, said:
“The Congolese authorities are to be commended for the continued satisfactory implementation of the PRGF arrangement. There has been improvement in fiscal discipline marked by a decline in the non-oil primary deficit since the start of the program. Continued fiscal discipline will be necessary to sustain macroeconomic stability, strengthen private sector confidence, and encourage foreign direct investment.
“The authorities aim to continue consolidation efforts in the 2010 budget and beyond while providing room for increased spending on pro-growth and pro-poor social programs, in line with the Poverty Reduction Strategy. Raising more domestic revenue will help reduce reliance on the oil sector—an important objective—and create further fiscal room. Toward this end, the authorities aim to complete the tax and customs administration reform and to initiate tax policy changes in line with Fund technical assistance.
“The authorities have continued to make progress with structural reforms, and the momentum should be sustained to reap the benefits of those reforms. This includes regular and timely adjustment of fuel prices, strengthening public financial management, and measures to improve the transparency and the management of the oil sector and oil revenue.
“Congo’s external position has substantially improved over the past several years but remains vulnerable to external shocks. Prudent debt management, including reliance on foreign assistance on highly concessional terms, will be critical. Maintaining creditor support through concerted efforts to achieve comparability of treatment in debt restructuring negotiations and forthright and timely provision of information are also necessary. The authorities have made progress toward implementing the floating completion point triggers under the enhanced Heavily Indebted Poor Countries (HIPC) Initiative. Continued support for Congo from the international community will remain critical to help the authorities advance their reforms.”