The Republic of Congo is rapidly urbanizing and its two largest cities, Brazzaville and Pointe-Noire, are home to more than one half the population. However, the rest of the country is sparsely populated and ranks among the least dense countries in Africa, with a population density of 12.8 per square kilometer. The country is largely covered by tropical forests, but also possesses abundant arable land equivalent to about 31% of its total surface area. Most importantly, it is endowed with significant hydrocarbon reserves with an estimated proven 1.6 billion barrels of oil reserves and 90 billion cubed meters of natural gas reserves. In addition, the country is significantly endowed in mining resources.
While some progress has been made in transforming its natural resources into economic growth, the country has not been able to leverage these natural resources to achieve robust socio-economic outcomes. Overall, the heavy reliance on hydrocarbon resources has crowded out development of other sectors, like agriculture and forestry. With the decline in oil prices and the new institutional context, the Republic of Congo is at a crossroads. The new government is determined to implement key structural reforms that will tackle the obstacles that have reduced incentives for investment, create the necessary conditions for a diversified economy, and move toward sustainable growth.
Elected in the first round elections on March 20, 2016, with over 60% of the total votes, President Denis Sassou Nguesso appointed Clement Mouamba as Prime Minister on April 23. The latter formed his government a week later. The objective of this new government, composed of 38 members including, for the first time, eight women, is to (i) promote institutional change; (ii) break with the past; (iii) promote youth and technocrats; and (iv) move towards greater gender equality. The government quickly engaged in the implementation of "The march towards development," the social project of President Denis Sassou Nguesso for 2016 to 2021, and in promoting the "Living together" initiative calling for unity and national cohesion. Gradually, the country has polished its image on the international scene, while the president endeavors to play a mediating role in regional political crises such the one in the Democratic Republic of Congo (DRC).
The Congolese opposition continues to challenge the legitimacy of the president and to request the opening of a true dialogue. Two of the main opposition leaders have been imprisoned and military actions have been reported since September 10, 2016 in the Pool department. According to the authorities, the latter have been conducted to respond to terrorist attacks committed by supporters of Frederick Bintsamou, also known as Pasteur Ntoumi, a religious leader at the head of a rebel group called Ninjas Nsiloulou.
Over the past five years, the Republic of Congo’s economic performance has fallen short of the growth rate needed to achieve its 2025 development goals. Between 2011 and 2015, the economy grew at a rate of 4%, compared to the projected growth rate of 8.5% set forth in the country’s National Development Plan (NDP). This slower growth is attributed to the poor performance and low prices of the oil sector, where production fell by 5.4% over the same period and prices declined by over 50%. The non-extractive sectors’ good performances depend on mixed effects from activities in the manufacturing, electricity, gas, telecommunication sectors, and public investments in infrastructure (9.7%). In 2016, the economy posted a -0.9% growth rate. Annual inflation is under control and fell sharply between 2012 and July 2016, from 5% to 2.2%.
The government opted to slow the pace of public expenditures in 2015 and 2016 in order to amend its fiscal policy following the decline in oil prices, instead of implementing optimal counter cyclical policy. Between 2011 and 2013, government revenues increased by 13% on average and decreased by 29% over 2014-2016. The decrease in public expenditures helped offset the substantial reduction in oil revenues caused by a slowdown in oil production and prices. In addition, the country’s reserves at the Bank of Central African States (BEAC) declined by 49% in 2015 and 75% in 2016, and can cover up to two months of prospective imports in 2016. Economic growth is expected to recover significantly, with a projected annual average growth rate of 3% over the 2016-2018 period with the entry into production of Moho Nord field.
Last Updated: Dec 20, 2016