IMF Country Report No. 21/225


IMF Country Report No. 21/225

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IMF Country Report No. 21/225



October 2021

In the context of the Request for an Extended Arrangement Under Staff Report for the 2021 Article IV Consultation, 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 September 24, 2021 following discussions that took place in Video conference during July 14–21, 2021, and in Washington, D.C., with officials of the Republic of Congo on the Staff Report for the 2021 Article IV Consultation. Based on information available at the time of these discussions, the staff report was completed on September 13, 2021.

  • A Debt Sustainability Analysis prepared by the staffs of the IMF and the World Bank.

  • An Informational Annex prepared by the IMF staff.

  • A Statement by the Executive Director for the Republic of Congo.

The documents listed below have been or will be separately released:

  • Selected Issues

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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© 2021 International Monetary Fund

Press Release


IMF Executive Board Concludes 2021 Article IV Consultation with the Republic of Congo


Washington, DC-September 28, 2021: The Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation1 with the Republic of Congo on Friday, September24, 2021.

The COVID-19 pandemic and oil price shocks have taken a deep toll on the Congolese economy but there are signs of recovery. Positive non-oil economic growth is expected this year, buoyed by the easing of lockdowns, gradual vaccine rollout, social spending, domestic arrears repayments, and some expansion of agricultural and mining activities. The contraction of oil production has slowed as oil field access and investment normalize; and the value of oil revenues and exports are rising on the back of higher oil prices. Overall growth is projected to be around zero percent in 2021 with subdued inflation (2 percent) and a current account surplus (12 percent of GDP).

Fiscal policy continues to balance difficult trade-offs: the fight against the pandemic, essential support for a resilient economic recovery, and prudent debt management.

The non-oil primary deficit is expected to widen to 17 percent of non-oil GDP in 2021, driven by spending on social assistance, health care, education, and infrastructure. Grants from development partners are lower than last year but non-oil revenues are improving and reductions in transfers and subsidies to state-owned enterprises and cuts in goods and services spending are helping create fiscal space. The non-oil deficit is mainly financed by improved oil revenues.

Debt sustainability has been restored though significant debt vulnerabilities remain, with overall debt anticipated at 84 percent of GDP by end-2021. Substantial repayments of domestic arrears and external debt have been facilitated by restructuring of external commercial loans, improved debt management, fiscal discipline, and oil revenue windfalls. Immediate liquidity needs are also supported by the G20 Debt Service Suspension Initiative (DSSI). However, liquidity risks and vulnerabilities to negative oil price shocks are elevated. Pending clearance of external arrears and conclusion of remaining restructuring negotiations, debt is classified as being in “distress”.

Over the medium and long terms, the main challenges will be exiting fragility while adapting to climate change and reduced oil revenues in response to the global transition to low-carbon economies. Non-oil economic growth is expected to gradually recover driven by economic diversification and resilience-building—which will benefit from continued governance and business environment reforms, increased social and infrastructure spending, and prudent debt management. The outlook is subject to high uncertainty amid risks of newwaves of the pandemic, volatile oil revenue prospects, climate change shocks, and successful reform implementation. On the upside, investment in mining and oil and gas could rise with new field discoveries and accelerated reform implementation could catalyze more concessional financing.

Executive Board Assessment2

“Executive Directors agreed with the thrust of the staff appraisal. They noted thatthe Republic of Congo has been hit hard bytheCOVID-19 pandemic and oil price shocks. The recovery is expected to take hold in 2022, while considerable uncertainty surrounds the outlook. Directors agreed that achieving the growth needed to exit fragility and sustain progress in poverty reduction will require strong efforts to address structural impediments, build climate resilience, and diversify the economy. Strengthened governance and transparency is criticalto secure much-needed financing from the Fund and development partners in support of the authorities’ adjustment efforts. In this context, Directors welcomed the authorities’ intention to engage in discussions with the Fund on a possible Extended Credit Facility arrangement.

“Directors welcomed the authorities’ fiscal prudence and debt restructuring efforts that have contributed to debt sustainability. They agreed that fiscal policy should continue to support the recovery in the near term, through increased spending on health and social assistance, as well as payment of domestic arrears. Noting that debt-related risks remain substantial, Directors stressed the importance of medium-term fiscal consolidation, enhanced debt management and transparency, and non-oil revenue mobilization. They recommended a comprehensive review of the fiscal regime of the oil sector, reduced transfers to state-owned enterprises (SOEs), and improved public investment efficiency. Directors highlighted that these measures would help to create space for much-needed social and infrastructure spending. Given financing constraints, they supported the authorities’ plan to use the newly allocated SDRs for critical social programs.

“Directors welcomed ongoing efforts to reduce financial sector vulnerabilities, including through domestic arrears clearance. Nonetheless, the still high non-performing loans call for continued close monitoring of the banking sector.

“Directors urged further efforts to improve governance and transparency. They welcomed the progress toward adopting a new anti-corruption law and encouraged strong focus on implementing the anti-corruption architecture, supported by measures to improve SOE governance and enhance public financial management more broadly.

“Directors emphasized the importance of advancing structural reforms to support economic diversification and adaptation to climate change. They encouraged the authorities to continue improving the business environment, facilitating private sector investment, and fostering competitiveness.”

Table 1.

Republic of Congo: Selected Economic Indicators, 2019–26

article image
Sources: Congolese authorities; and IMF staff estimates and projections.

Staff Report for the 2019 Article IV Consultation (January 27, 2020; Country Report No. 20/26). For comparability, we used the rebased nominal GDP with the nominal growth projected at the time of the country report.

Revenue excluding grants minus total expenditures (excluding interest payments and foreign-financed public investment).

Overall balance minus 20 percent of oil revenues and minus 80 percentof the oil revenue in excess of the average observed during the three previous years.

Before exceptional financing due to external debt restructuring net of restructured contingent liabilities.

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September 13,2021


Context. The COVID-19 pandemic and oil price shocks have taken a deep toll on the Congolese economy, weighing on incomes and inequality. Debt sustainability challenges precluded Fund financial assistance during the pandemic, and the Extended Credit Facility (ECF) arrangement, approved in 2019, expired in April 2021 without having completed the first review. Recently, debt sustainability has been restored owing to the authorities’ debt restructuring strategy and current and projected higher oil prices. However, the risk of debt distress remains high given liquidity risks and vulnerabilities to negative oil price shocks. The authorities are actively negotiating the resolution of pending external arrears. Until this process is concluded and the negotiations with two external creditors are finalized, debt is classified as being “in distress.”

Outlook and Risks. Recent oil price increases, the vaccine rollout, social spending, and domestic arrears repayments are driving an improvement in real economic activity from -8.2 percent in 2020 to -0.2 and 2.3 percent in 2021 and 2022. However, medium-term economic growth needed to exit fragility is held back by challenges associated with governance and structural impediments, as well as climate change and reduced oil demand in response to the global transition to low-carbon economies. Key risks include volatility in oil prices and production, a worsening of the pandemic, and climate shocks.

Key Policy Recommendations. Economic diversification and adaptation to climate change will be central to achieving higher, more resilient, and inclusive growth. In this context, fiscal policy should continue prioritizing revenue mobilization, social and infrastructure spending, and domestic arrears payment. Absent additional development partner financing, the envisaged medium-term consolidation appropriately balances the difficult tradeoff between development spending needed to exit fragility and prudent debt management. Large fiscal and debt vulnerabilities should be addressed through reduced tax exemptions and transfers to state-owned enterprises and improved management of public investment and debt. Key governance reforms include rapidly adopting the new anti-corruption law and ensuring efficient and transparent public spending, including through a medium-term public financial management strategy and new information management software. Improving access to finance, competitiveness, and the reach and effectiveness of social spending will also be critical to building broad-based growth.

Approved By

Vitaliy Kramarenko (AFR) and Gavin Gray (SPR)

Discussions for the 2021 AIV Consultation were held virtually during July 14–21, 2021. The staff team comprised Ms. Mitra (head), Mr. Islam, Mr. Sulemane (all AFR), Mr. Chaudry (SPR), Ms. Liu (FAD), Mr. Swanepoel (LEG), Mr. Thomas (Resident Representative), Mr. Nsongui Tonadio (local economist), and Mr. Sarda (FAD long-term expert). Mr. Sidi Bouna (OED) joined in key discussions. Mr. Tsoungi (World Bank) joined the technical meetings. Ms.Akor provided research support and Ms. Adjahouinou assisted in preparing the staff report. The mission held discussions with the Hon. Mr. Andely Minister of Finance, the Hon. Mme. Babackas, Minister of the Economy and Planning, the Hon. Mme. Soudan-Nonault, the Minister for the Environment, and other senior officials. The mission also met representatives of the private sector, civil society, and development partners.





  • A Fiscal Policy and Debt Sustainability

  • B. Advancing Governance

  • C. Economic Diversification and Adapting to Climate Change




  • 1. COVID-19 Pandemic in the Republic of Congo

  • 2. The Club de Brazzaville


  • 1. Comparison of Indicators Pre-and Post- Pandemic, 2019–23


  • 1. Selected Economic and Financial Indicator, 2019–26

  • 2a. Central Government Operations, 2019–26 (Billions of CFA francs)

  • 2b. Central Government Operations, 2019–26 (Percent of non-oil GDP)

  • 2c. Central Government Operations, 2019–26 (Percent of GDP)

  • 3a. Quarterly Central Government Operations, Flows, 2020–22

  • 3b. Quarterly Central Government Operations, Flows, 2020–22

  • 4. Medium-Term Balance of Payments, 2019–26

  • 5. Monetary Survey, 2019–26

  • 6. Financial Soundness Indicators for the Banking Sector, 2015–20

  • 7. Public Debt Stock, 2019–20

  • 8. External Arrears, 2016–20

  • 9. Sustainable Development Goals


  • I. Drivers of Congo’s Fragility

  • II. Outcome of Strategy to Restore External Debt Sustainability

  • III. Authorities’ Implementation of 2020 Policy Recommendations

  • IV. Risk Assessment Matrix

  • V. Social Spending

  • VI. External Sector Assessment

  • VII. New Series of GDP

  • VIM. Capacity Development Strategy


Under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country’s economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussbn by the Executive Board.


At the conclusion of the discussion, the Managing Director, as Chairman of the Board, summarizes the views of Executive Directors, and this summary is transmitted to the country’s authorities. An explanation of any qualifiers used in summings up can be found here: http://www.IMF.orc/extanal/np/sec/misc/qualifiers.htm.