REPUBLIC OF CONGO

Abstract

REPUBLIC OF CONGO

Title page

REPUBLIC OF CONGO

STAFF REPORT FOR THE 2021 ARTICLE IV CONSULTATION — INFORMATIONAL ANNEX

September 10, 2021

Prepared By

The African Department (in Consultation with other Departments)

Contents

  • FUND RELATIONS

  • RELATIONS WITH THE WORLD BANK

  • RELATIONS WITH THE AFRICAN DEVELOPMENT BANK

  • STATISTICAL ISSUES

Fund Relations

A. Financial Relations

(As of June, 30,2021)

Membership Status: Joined: July 10, 1963; Article VIII

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Latest Financial Arrangements

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Projected Payments to Fund1

(SDR Million; based on existing use of resources and present holdings of SDRs)

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Formerly PRGF

Implementation of HIPC Initiative

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Note:Decision point: point at which the IMF and the World Bank determine whether a country qualifies for assistance under the HIPC Initiative and decide on the amount of assistance to be committed.Interim assistance: amount disbursed to a country during the period between decision and completion points, up to 20 percent annually and 60 percent in total of the assistance committed at the decision point (or 25 percent and 75 percent, respectively, in exceptional circumstances).Completion point: point at which a country receives the remaining balance of its assistance committed at the decision point, together with an additional disbursement of interest income as defined in footnote 2 above. The timing of the completion point is linked to the implementation of pre-ag reed key structural reforms (i.e., floating completion point).

Assistances committed under the original framework is expressed in net present value (NPV) terms at the completion point, and assistance committed under the enhanced framework is expressed in NPV term sat the decision point. Hence these two amounts cannot be added.

Under the enhanced framework, an additional disbursement is made at the completion point corresponding to interest income earned on the amount committed at the decision point but not disbursed during the interim period.

Implementation of Multilateral Debt Relief Initiative (MDRI)

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The MDRI provides 100 percent debt relief to eligible member countries that qualified for the assistance. Grant assistance from the MDRI Trust and HIPC resources provide debt relief to cover the full stock of debt owed to the Fund as of end-2004 that remains outstanding at the time the member qualifies for such debt relief.

Implementation of Catastrophe Containment and Relief (CCR): Not Applicable

As of February 4, 2015, the Post-Catastrophe Debt Relief Trust has been transformed to the Catastrophe Containment and Relief (CCR) Trust.

Safeguards Assessment:

The Bank of the Central African States (BEAC) is the regional central bank of CEMAC. Under the IMF safeguards policy and in line with the four-year cycle for safeguards assessments of regional central banks, a full safeguards assessment was completed in 2017 and an update assessment is expected to be conducted in due course. The 2017 assessment noted the positive steps taken by the BEAC to strengthen governance provisions and enhance financial reporting transparency. In particular, the BEAC has since implemented the priority recommendations from the assessment: the regional central bank’s secondary legal instruments were aligned with its amended Charter, and the FY 2019 and 2020 audited financial statements have been issued in compliance with IFRS. Both recommendations mark the conclusion of a multi-year governance-focused reform with support from the Fund. Staff maintains close engagement with the BEAC as it continues to implement a final recommendation to undergo an external quality assessment of its internal audit function.

B. Nonfinancial Relations

Exchange Arrangements:

The dejure and de facto exchange rate arrangement of the Central African Economic and Monetary Community (CEMAC) is a conventional peg. The Republic of Congo participates in the CEMAC and has no separate legal tender. Congo has accepted the obligations of Article VIII, Sections 2, 3 and 4 and maintains an exchange system free of restrictions on the making of payments and transfers for current international transactions and multiple currency practices. The regional currency is the CFA franc, which is pegged to the Euro at a fixed rate of CFAF 655.95 =Euro 1.

Article IV Consultations:

Consultations with Congo are now on a 12-month cycle, based on the Board decision on Article IV consultation cycles. The last Article IV consultation discussions were held in Brazzaville on October 24-November 6, 2019. The consultation was concluded by the Executive Board on January 17, 2020 when the staff report (Country Report No. 20/26 at www.imf.org) was discussed.

Technical Assistance

Technical Assistance Received in Fiscal Year 2021

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Relations with the World Bank

The IMF and the World Bank teams maintain an ongoing exchange of views on relevant macroeconomic and structural issues in the Republic of Congo. Cooperation during the last year has included discussions related to the macroeconomic situation in Republic of Congo; institutional reforms for public financial management; scaling up of social safety nets; reinforcing human capital and capacity in statistics, improving quality in urban development and infrastructure sector and updates on the status of World Bank country programs. These World Bank country programs are aimed at improving competitiveness and development outcomes especially in the area of human capital, and include a conditional cash transfer program and measures to improve productivity including in the rural area through investment in the digital economy and in in roads, programs to develop seeds and the training of farmers. A full DSA was jointly prepared by IMF and International Development Association staff for the Article IV in January 2020.

Republic of Congo: IMF and WB Joint Action Plan

(As of June 23, 2021)

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Relations with the African Development Bank

The IMF and the African Development Bank teams maintain an ongoing exchange of views on relevant macroeconomic and structural issues in the Republic of Congo. Cooperation during the last year has included discussions related to the macroeconomic situation in Republic of Congo; preparation of the Republic of Congo [list of major activities related to AfDB role in Congo and the budget support and project financing instruments]; reinforcing capacity in statistics, improving quality in urban development and infrastructure sector and updates on the status of the AfDB country programs. These AfDB country programs are aimed at [describe the focus and main goals of the existing and future projects and budget support mechanisms].

Republic of Congo: IMF and AfDB Joint Action Plan

(As of June 23, 2021)

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Statistical Issues

(As of August 4, 2021)

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Republic of Congo: Table of Common Indicators Required for Surveillance

(As of July 22, 2021)

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Any reserve assets that are pledged or otherwise encumbered should be specified separately. Also, data should comprise short-term liabilities linked to a foreign currency but settled by other means as well as the notional values of financial derivatives to pay and to receive foreign currency, including those linked to a foreign currency but settled by other means.

Both market-based and officially determined, including discounts rates, money market rates, rates on treasury bills, notes and bonds.

Foreign, domestic bank, and domestic non-bank financing.

The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments. Data not provided by the authorities due to technical capacity constraints.

Including currency and maturity composition.

Includes external gross financial asset and liability positions vis-a-vis nonresidents. Data not provided by the authorities due to technical capacity constraints.

Daily (D), Weekly (W), Monthly (M), Quarterly (Q), Annually (A); Irregular (I); Not Available (NA).

1

When a member has overdue financial obligations outstanding for more than three months, the amount of such arrears will be shown in this section.

2

The authorities are planning to implement the e-GDDS (Country Report [xx], Annex 7)