Overview

Country Overview

The Democratic Republic of the Congo (DRC) is a country with vast resources. Its spans a surface area of 2.3 million square kilometers, the equivalent of two-thirds of the European Union. According to the latest NSI (National Statistics Institute) estimates, fewer than 40% of the nearly 70 million inhabitants live in urban areas.  With 80 million hectares of arable land and over 1,100 minerals and precious metals identified, the DRC has the potential to become one of the richest countries on the African continent and a driver of African growth.

Political Context

The country is recovering from a series of conflicts that broke out in the 1990s creating a protracted economic and social slump. In 1999, the Lusaka Peace accords brokered peace, paving the way to recover and the establishment of new institutions, such as Parliament, the Senate, and provincial assemblies. In 2011, Joseph Kabila and his party won the presidential and legislative elections despite concerns about the transparency of the electoral process.  The next presidential elections are slated for 2016.

Although the security situation is improving, it remains tense particularly in the eastern provinces. Peacebuilding and economic recovery efforts are being carried out in a challenging social context. The new territorial division took effect in June 2015, with the country moving from 11 provinces to 26.

The new electoral cycle, with municipal, local, and provincial elections that was planned for October 2015 was postponed. The entire electoral process is delayed and presidential and legislative elections planned for November 2016 have yet to be confirmed. President Kabila has called for a national political dialogue with the five following outlined priorities: (i) credible and inclusive voters’ list, (ii) review of the electoral calendar, (iii) security of the electoral process, (iv) financing of the elections and (v) the role of international partners. The objective of the dialogue is to reach a consensus on various questions in order to lay down a new foundation for forthcoming elections.

Economic Overview

After an economic slump in 2009 that brought the growth rate down to 2.8% due to the global financial crisis, the DRC posted an annual average economic growth rate of 7.7% during the 2010-2014 period, and of 7.7% in 2015, both of which are well above the average in Sub-Saharan Africa. This performance is driven by robust extractive industries and related investments despite the global economic slowdown and the decline in the demand and price for minerals exported by the DRC. Public investments have also helped spur growth. Inflation, which posted a staggering 53% in 2009, has been maintained around 1% over the period 2013-2015, down from 3% in 2012 and 10% in 2010 as a result of the implementation of prudent fiscal and monetary policies.

The economy is expected to continue to grow at an estimated rate of around 8%, owing to increased investment and growth in the extractive industries and the contributions of public works and the tertiary sector.

Maintaining a restrictive monetary policy and fiscal discipline is critical to containing inflation below the 5% goal. World Bank estimates confirm that the support strategy for investments in large-scale infrastructure projects, led by the authorities, could significantly drive growth, provided that priority is accorded to high-return projects (transport, electricity).   

With respect to reforms, since 2010, the government has been committed to working closely with the World Bank to establish a mechanism for the systematic improvement of economic governance.  A joint mechanism for monitoring the progress on reform implementation has also been established. The objective of these reforms is to strengthen governance and transparency in the extractive industries (forestry, mining, and oil sectors) and to improve the business climate. Over the past two years, significant progress in the implementation of these measures has been observed. Almost all the contracts signed by the government in the oil, mining, and forestry sectors have been disclosed to the public. The DRC is meeting the transparency requirements through the periodic publication of reports under the Extractive Industries Transparency Initiative (EITI). However, additional efforts must be made to achieve the widespread use of competition for the awarding of mining, oil, and forestry contracts.

Social Context

Despite an impressive economic growth rate and a reduction in the poverty rate from 71% in 2005 to 63% in 2012, the poverty rate remains high in the DRC. The country is among the poorest countries in the world and was ranked 176 out of 187 countries on the Human Development in 2015, and its per capita income, which stood at $380 in 2014 (Atlas method), is among the lowest in the world.  The United Nations estimates that there are some 2.3 million displaced persons and refugees in the country and 323,000 DRC nationals living in refugee camps outside the country. A humanitarian emergency persists in the more unstable parts of the DRC and sexual violence rates remain high.

Last Updated: Apr 08, 2016

World Bank Group Engagement in the Democratic Republic of the Congo

The Bank re-engaged in the DRC in 2001 after nearly a decade of suspension of its activities due to widespread corruption and growing insecurity.

The new Country Assistance Strategy for the period 2013-2016 aims to (i) increase the efficiency of the State at the central level and decentralize and improve good governance; (ii) enhance the competitiveness of the economy by accelerating growth spearheaded by private sector job creation; (iii) upgrade the delivery of social services in order to improve human development indicators (HDI); and (iv) respond to problems of fragility and conflict in the eastern provinces of the DRC.  Aside from new operations, the strategy will be based primarily on the existing portfolio with the goal enhancing the development impact. In March 2016, the World Bank’s portfolio in the DRC consisted of 26 projects, representing a total commitment of $3.3 billion, including two regional projects for a total of $1.14 billion. The portfolio is spread across the sectors, with close to 63% in infrastructure, 16% in health, education and social protection, 15% in agriculture and private sector and 6% in governance including the mining sector. 

Last Updated: Apr 08, 2016

Since 2001, various World Bank-financed projects have improved economic and social conditions in the DRC. For example, World Bank support has made noteworthy changes in the following areas:

Health

Access to health care has improved, poliomyelitis has been eradicated, and maternal mortality has been reduced as a result of anti-poliomyelitis vaccination campaigns, widespread child vaccination campaigns, and the provision of millions of dollars in essential medications. The rehabilitation of over 500 health centers and referral hospitals in the provinces of Equateur, Katanga, Maniema, and Bandundu and the distribution of close to 18 million insecticide-treated nets also contributed to these positive outcomes.

Education

The Support to Basic Education Program, funded by the Global Partnership for Education and supervised by the World Bank Group, increased access and equity in primary education and rehabilitated 728 out of 825 classrooms in the country. The program has also provided $20 million to procure learning materials such as textbooks in French, mathematics, civic education, and science as well as establish 35 technological labs (or resource centers) to accompany distance in-service training.

Infrastructure

Rehabilitation of basic infrastructure contributed to reviving economic recovery through the reopening of 1,530 kilometers of national roads in Province Orientale, South Kivu and Katanga. To date, 36% of the high-priority road network has been found to be in good condition (against 14% in 2009).

Energy

To help strengthen the national electricity company, Société nationale d’électricité (SNEL), the World Bank Group supported the implementation of a performance contract between the government and SNEL, the establishment of a new executive board, the recruitment of technical experts, the implementation of a service contract with Manitoba Hydro International, and the creation of a recovery plan for SNEL. As a result, the company’s revenues have increased 30% per kWh. 

A World Bank Group program is providing $1.1 billion to rehabilitate Inga 1 and 2, as well as strengthen the transportation network between Inga, Kinshasa, and the Katanga for electricity exports to the Southern African Power Pool (SAAP). It will also help reinforce the distribution network in Kinshasa, and improve the performance and governance of SNEL.

World Bank Group financing helped rehabilitate the first unit (G2), at Inga 1 which is currently functioning and brings an additional 55 MW. It also helped to install a compensator at Kimwenza (approximately 30 MW) to the network, to rehabilitate the transmission line Inga-Kolwezi-Kassumbalessa, and to install a fiber optic network in addition to four turbines of the 114 included in Inga 1 and Inga 2.

Governance and Public Sector Capacity Building

Improving governance in the management of resources is crucial in the DRC and commendable progress has been made on the Economic Governance Matrix (EGM, jointly monitored by the government and the World Bank). As part of the EGM, the government has published mining contracts and revenues to conform to the EITI compliance. However, some second generation reforms are still lagging behind – after a long process, the draft for mining and oil laws are currently in the Parliament. Reforms, such as the revised mining law, can help the country create a larger fiscal space. 

Last Updated: Apr 08, 2016

The World Bank Group continues to strengthen its partnerships with other development partners within the Donor Coordination Group and also bilaterally. UN-World Bank collaboration has been particularly critical to achieving important accomplishments in a number of sectors including demobilization, education, and health. This collaboration is also important in the context of several projects such as the multi-donor fund known as PROFIT Congo, established by the World Bank, the Department for International Development (DFID), and the Belgian Development Cooperation, in collaboration with the Government of the Democratic Republic of the Congo. The mission of this $31 million multi-donor fund, which is managed by the World Bank, is to coordinate financing for the national strategy on public finance reform in the DRC. 

Last Updated: Apr 08, 2016