The Democratic Republic of the Congo (DRC) is a country with vast resources. Its surface area of 2.3 million square kilometers spans the equivalent of two-thirds of the European Union. Fewer than 40% of the nearly 70 million inhabitants live in urban areas, according to the latest NSI (National Statistics Institute) estimates. With 80 million hectares of arable land and over 1,100 minerals and precious metals, the DRC has the potential to be one of the richest countries on the African continent and a driver of African growth.
Since 2001, the country has been recovering from a series of conflicts that broke out in the 1990s and the effects of a protracted economic and social slump. In 1999, after the Lusaka Peace accords were signed, a transitional government was established pending the presidential elections in 2006 that were held peacefully. New institutions such as the Parliament, the Senate, and provincial assemblies, are now operational. Joseph Kabila and his party won the presidential and legislative elections held in November 2011, however, these elections raised concerns about the transparency of the electoral process. The next presidential elections are slated for 2016.
The DRC remains a fragile country with tremendous needs in terms of reconstruction, economic growth, and governance. The security situation is improving but remains tense, particularly in the eastern provinces. Peacebuilding and economic recovery efforts are being carried out in a challenging social context.
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 7.4% during the 2010-2013 period, and of 8.7% in 2014, both of which are well above the average in Sub-Saharan Africa. This performance is driven by the robust extractive industries and by favorable trends in commodity prices. Public investments have also helped spur growth. Inflation, which posted a staggering 53% in 2009, has stood at 1% since 2013 as a result of the implementation of prudent fiscal and monetary policies.
The DRC’s economic outlook still seems favorable although its political and security situation remains fragile. The economy is expected to grow steadily in the medium term at over 8%, owing to increased investment and growth in the extractive industries and the contribution 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 support growth, provided that priority is accorded to high-return projects (transport, electricity).
The government has been committed, since 2010, to working closely with the World Bank to establish a mechanism for the systematic improvement of economic governance. A governance model has been established and its progress is periodically measured on a bimonthly basis. Its objective is to strengthen governance and transparency in the extractive industries (forestry, mining, and oil sectors) and to improve the business climate. These measures are designed to consolidate the reforms launched under the Heavily Indebted Poor Countries (HIPC) Initiative, and to restore confidence among private investors and development partners. 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 the reports under the Extractive Industries Transparency Initiative (EITI). However, additional efforts must be made to achieve the widespread use of competition for the award of mining, oil, and forestry contracts.
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 ranks second to last on the Human Development Index (186 out of 187 countries), and its per capita income, which stood at $220 in 2012, 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.
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 suspended Bank 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 and decentralized levels 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. In conjunction with the new operations, the strategy will be primarily based on the existing portfolio and should enhance its impact on development.
In May 2014, the World Bank’s portfolio in the DRC consisted of 25 projects in progress, representing a total commitment of $3.1 billion, including two regional projects for a total of $3.5 billion, including two regional projects representing $1.14 billion. The portfolio consists mainly of infrastructure rehabilitation projects (roads, railways, drinking water, electricity); governance in public finance management in four provinces and in the mining sector; reform of public enterprises and improvement of the business climate; rehabilitation of health and education infrastructures and improvement of health, education and social protection services; management of national forests and parks; and agriculture.
Vaccination coverage for children under the age of one rose from 54% in 2007 to 83% in 2011 under the Health Sector Rehabilitation Support Project (HSRSP).
Some 918 classrooms were constructed and 14 million textbooks distributed under the Emergency Urban and Social Rehabilitation (PURUS) and the Education Sector Rehabilitation (PARSE) projects. Primary enrolment rates climbed from 64% in 2007 to 93% in 2011, and 43,335 teachers were officially incorporated into the civil service.
The rehabilitation of basic infrastructure helped revive economic growth by reopening 1,530 kilometers of national roads in the Orientale, South Kivu, and Katanga provinces.
World Bank support helped strengthen the national electricity company (Société nationale d’électricité or SNEL) through the establishment of a new executive board, recruitment of technical experts and managers, and the conclusion of a performance contract with the government. As a result, the company’s revenues have increased 30% per kWh.
Public sector governance and capacity building
The governance matrix adopted in 2010 is the main framework for dialogue with the authorities on the subject of governance. Significant progress has been made with regard to the issuance of mining and oil contracts. Almost 80% of contracts and 100% of oil contracts are now issued.
Competitiveness and employment
The Competitiveness and Private Sector Development Project helped, among other things, reduce business start-up times by 51% and cut the number of taxes from 118 to 30.
The World Bank has been working closely with the other donors for many years. It is a member of various thematic groups established for Poverty Reduction Strategy Paper (PRSP) implementation and also of inter-donor groups, where it plays a lead role in the environmental and governance areas. This collaboration is also important in the context of several projects such as a $31 million 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 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 07, 2015
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