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IMF Country Report No. 20/146
DEMOCRATIC REPUBLIC OF THE CONGO
REQUEST FOR DISBURSEMENT UNDER THE RAPID CREDIT FACILITY—PRESS RELEASE; STAFF REPORT; AND STATEMENT BY THE EXECUTIVE DIRECTOR FOR THE DEMOCRATIC REPUBLIC OF THE CONGO
May 2020
In the context of the Request for Disbursement under the Rapid Credit Facility (RCF), the following documents have been released and are included in this package:
A Press Release including a statement by the Chair of the Executive Board.
The Staff Report prepared by a staff team of the IMF for the Executive Board’s consideration on April 22, following discussions that ended on April 9, with the officials of the Democratic Republic of the Congo on economic developments and policies underpinning the IMF arrangement under the Rapid Credit Facility. Based on information available at the time of these discussions, the staff report was completed on April 16.
A Debt Sustainability Analysis prepared by the staff of the IMF and the International Development Association (IDA).
A Statement by the Executive Director for the Democratic Republic of the Congo.
The document listed below has been or will be separately released.
Letter of Intent sent to the IMF by the authorities of the Democratic Republic of the Congo*
*Also included in the Staff Report
The IMF’s transparency policy allows for the deletion of market-sensitive information and premature disclosure of the authorities’ policy intentions in published staff reports and other documents.
Copies of this report are available to the public from
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© 2020 International Monetary Fund
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DEMOCRATIC REPUBLIC OF THE CONGO
REQUEST FOR DISBURSEMENT UNDER THE RAPID CREDIT FACILITY
April 16, 2020
Executive Summary
Context. The Democratic Republic of the Congo is suffering directly from the COVID-19 pandemic with 215 confirmed cases and 20 deaths as of April 9. The economic impact, chiefly through lower commodity prices, was being felt even before the first confirmed case was reported on March 10. The authorities’ policy response to the pandemic has been firm, scaling up health care spending and putting in place measures to help contain and mitigate the spread of the disease. The pandemic is also dampening domestic revenue mobilization and putting significant pressures on foreign exchange reserves.
Request for Fund support. Given the sizeable budgetary and external financing gaps arising from the economic impact and mitigation efforts of the COVID-19 pandemic, the authorities are seeking financial assistance under the Rapid Credit Facility (RCF) to be disbursed as direct budget support to address the urgent balance of payments needs. In the attached letter, the authorities request a disbursement of SDR 266.5 million, equivalent to 25 percent of quota, with the full amount to become available upon Board approval. Staff supports the request. The authorities are also seeking additional financing from multilateral and bilateral donors to cover the remaining financing needs.
Performance under the Staff Monitored Program. Preliminary data suggest that all quantitative targets for end-December 2019 were met. Meeting the second review targets appears highly unlikely as progress on implementing revenue mobilization reforms has been slow and the COVID pandemic has been hitting the economy.
Approved By
Annalisa Fedelino (AFR) and Seán Nolan (SPR)
An IMF team consisting of M. Villafuerte (head), C. Gicquel, F. Moreau, H. Perez-Saiz, (all AFR), R. Mano (SPR), R. Lafarguette (MCM), P. Egoumé (Resident Representative), and E. Gbadi (local economist) held discussions with Congolese authorities led by Minister of Finance, Jose Sélé Yalaghuli, Central Bank Governor Deogratias Mwana Nyambo Mutumbo, and other senior government officials by teleconferences on April 9, 2020. M. Alle (OED) also participated in discussions.
Contents
CONTEXT
IMPACT OF THE PANDEMIC AND OUTLOOK
A. Initial Impact and Response
B. Outlook and Risks
POLICY ISSUES AND DISCUSSIONS
A. Fiscal Policy
B. Monetary, Financial and Exchange Rate Policies
ACCESS AND CAPACITY TO REPAY
A. Access Level and Modalities
B. Capacity to Repay and Safeguards Assessment
STAFF APPRAISAL
BOX
1. COVID-19 Impact on the Mining Sector
TABLES
1. Selected Economic Indicators, 2018–22
2a. Central Government Financial Operations, 2017–2020
2b. Central Government Financial Operations, 2017–2020.
3. Monetary Survey, 2017–20
4. Balance of Payments, 2017–20
5. Financial Soundness Indicators, September 2017-December 2019
6. Indicators of Capacity to Repay the Fund, 2020–30
APPENDIX
I. Letter of Intent
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DEMOCRATIC REPUBLIC OF THE CONGO
REQUEST FOR DISBURSEMENT UNDER THE RAPID CREDIT FACILITY—DEBT SUSTAINABILITY ANALYSIS UNDER THE COVID-19 SHOCK1
April 16, 2020
Approved By
Annalisa Fedelino (IMF, AFR), Seán Nolan (IMF, SPR), and Marcello Estevão (IDA)
Prepared by the staff of the International Monetary Fund (IMF) and the International Development Association (IDA)
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