Overview

Country Overview

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.

Political Context

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.

Economic Situation

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

World Bank Group Engagement in the Republic of Congo

The aim of the  Country Partnership Strategy for 2013-2016  is to help the Government diversify its economy by reducing its dependence on oil, promoting private sector-led growth, creating jobs, and boosting the performance of basic public services (health and education).

This strategy is in line with the Government’s PRSP and is built around three themes: competitiveness and employment; vulnerabilities and adaptability; and good governance and capacity building.

In addition to these operations, the World Bank will conduct analytical studies in several areas to help the authorities devise appropriate public policies and implement priority reforms.

In May 2014, the World Bank’s portfolio in the Republic of Congo had 11 active projects totaling $164.8 million in grants and credits. Another project is also under preparation to help improve impoverished neighborhoods.

Last Updated: Jun 26, 2015

World Bank support focuses on the following themes: (i) economic diversification and growth; (ii) improving the management of oil revenues and public expenditures; (iii) enhancing agricultural production and productivity; (iv) introducing tools to improve forestry management; (v) establishing a strategy for the growth of micro, small, and medium enterprises; (vi)  improving services from the infrastructure program; and (vii) identifying the increase in the Congolese State’s share of the public transport services market at the sub-regional level.

Agriculture

An operation co-financed in equal parts by the Government and IDA ($20 million each) aims to strengthen the ability of rural communities to increase their incomes through the use of more modern agricultural technologies and increased access to market infrastructure.  This project also seeks to contribute to improved planning and implementation of the pro-poor agricultural policies and expenditure programs. Under this project, 1,251 km of rural roads have been rehabilitated, 36 rural market infrastructure facilities have been constructed, and 855 income-generating microprojects have been financed. The sum of $10.5 million in additional financing from IDA and other donors, with support from the Ministry of Agriculture, was provided on August 18, 2014.

Foreign direct investment has begun to flow into the country. A South African company is planning to develop large-scale farms and Singaporean enterprises have expressed an interest in investing in palm oil production.

Building institutional capacity

Since the application of a new procurement code, the use of bids and competition for the provision of services is mandatory prior to the awarding of public contracts. A procurement regulatory authority and a public procurement department have been established. An anti-corruption watchdog and a national anti-corruption commission, which have published their initial reports, have also been created. The Republic of Congo’s oil marketing network is now in compliance with international standards and helps ensure that the country is benefiting from market prices.

Last Updated: Jun 26, 2015

Foreign financial assistance to the Republic of Congo is modest, as the lion’s share of public expenditures is financed by the Government.  Apart from the World Bank, the major international partners are China, the European Union (EU), the French Development Agency (AFD), and the African Development Bank (AfDB).  These partners work together to promote economic diversification and the development of the health and education sectors.  The United Nations and the Central African State Development Bank (BDEAC) are also active in the Republic of Congo. Furthermore, the Government recently scaled up its collaboration with Singapore, in particular with respect to the special economic zones.

Last Updated: Jun 26, 2015


LENDING

Republic of the Congo: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments