The Republic of Congo is endowed with a wealth of assets that can be used to build a robust economy, improve the living standards of its population, and drive the economic growth of the sub-region.
The country has substantial oil reserves, vast natural forests (close to 22 million hectares), and extensive arable land (10,000,000 hectares). It also has a highly developed hydrographic network, a climate conducive to agriculture, a world renowned biodiversity that helps regulate greenhouse gases, and mineral resources. It is also strategically positioned in Central Africa, possessing a 170-kilometer long coastal front on the Atlantic Ocean and a deep-water port in Pointe-Noire that could benefit the entire sub-region.
Since the adoption of a new constitution in 2002, the Republic of Congo has been relatively stable, and is continuing its efforts to promote peace and establish democratic institutions. Incumbent president, Denis Sassou-Nguesso, was re-elected for a seven-year term in July 2009.
President Sassou-Nguesso’s bid for a potential third term in 2016 is the subject of current public debate. Articles 55 and 58 of the constitution adopted in 2002 limit the age of the president to 70 years and cap presidential terms at two. However, the presidential majority would like to be granted more time to complete the reforms undertaken and is proposing that the constitution be amended to allow the head of state to run for a third term. This proposal has drawn both support and fierce opposition from the coalition of center parties, the opposition parties, and the presidential majority coalition parties.
A referendum is planned to settle the issue and President Sassou-Nguesso is calling for a national dialogue on the constitution.
Congo’s economic performance over the past three years has fallen far short of the target growth rate needed to achieve the 2025 development goals. Between 2011 and 2013, the economy grew at a rate of 3.5%, compared to the projected growth rate of 8.5% set forth in the country’s National Development Plan (NDP). This tepid growth is attributable to the poor performance of the oil sector, where production fell by 8.2% over the same period. However, the economy picked up in 2014, posting a 6.4% growth rate driven by oil production (3.1%) and public investments in infrastructure (9.2%). The non-extractive sectors are expected to continue to benefit from these investments, growing at a projected rate of 7.4% in 2015. Annual inflation fell sharply between 2013 and 2014, from 2.9% to 0.9%, and is now holding steady below the 3% ceiling set by the Economic Community of Central African States (CEMAC).
The Government opted to slow the pace of public expenditures in 2015 in order to amend its fiscal policy following the decline in oil prices. Between 2011 and 2014, State revenues increased by 7.4% on average. The ongoing increase in public expenditures helped offset the substantial reduction in oil revenues caused by a slowdown in oil production. In addition, Congo’s reserves at the Bank of Central African States (BEAC) continued to grow by 2% in 2014, and cover up to five months of imports.
Congo’s medium-term outlook remains positive, with an annual average growth rate of 5.5% over the 2015-2017 period. This growth is expected to be driven by the non-extractive sectors against a backdrop of low inflation and the development of the Moho Nord and Lianzi oil fields. Accounting for 23.7% of GDP over the 2011-2014 period, public expenditures fell in 2014 and are projected to increase at a slower pace, reaching 4.5% per year between 2015 and 2017. The economy remains vulnerable to exogenous shocks such as the volatility of oil prices, declining oil production, and mining production delays. Internal risks also remain, but have been taken into consideration in the Government’s economic strategy.
Last Updated: Jun 26, 2015