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. According to the latest NSI (National Statistics Institute) estimates, fewer than 40% of the nearly 77 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

Presidential and parliamentary elections planned initially for November 27, 2016 have been delayed due to an outdated electoral register. According to the National Independent Electoral Commission (CENI), the revision of the electoral register may take between 13 and 16 months. On September 1, 2016, the African Union facilitator, Edem Kodjo, launched the national political dialogue to discuss the electoral process and pave the way for peaceful and transparent elections, however a part of the opposition’s main parties have refused to participate in the national political dialogue. Participants of the dialogue agreed on September 14, 2016 that the presidential vote would be combined with legislative and provincial elections, although no specific dates were set.

On September 19, 2016, deadly protests broke out in Kinshasa calling for President Joseph Kabila to step down and tensions continued to escalate.

The country is still 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 recovery and the establishment of new institutions, such as a Parliament, a Senate, and provincial assemblies. In 2006, Joseph Kabila and his party, the People's Party for Reconstruction and Democracy (PPRD), won the presidential and legislative elections despite concerns about the transparency of the electoral process. He was reelected in 2011, however this election was also contested. Peacebuilding and economic recovery efforts are being carried out in a challenging social context.

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 2010-2015 period, which are well above the average in Sub-Saharan Africa. This performance is due to robust growth in extractive industries and related investments and, to some extent, to public investments. However, the global economic slowdown with the decline in the demand and price for minerals and domestic political uncertainty have taken their toll on the economy in the last quarter of 2015 and the first half of 2016. Gross domestic product (GDP) growth in 2015 decelerated to 6.9% from 9.5% in 2014. The government has recently revised growth estimates downward for 2016 to 4.3%.

Prudence in fiscal and monetary policies helped DRC authorities to maintain a stable macroeconomic framework. Inflation, which posted a staggering 53% in 2009, remained around 1% over the period 2013-2015, down from 2.8% in 2012 and 9.8% in 2010. Maintaining a restrictive monetary policy and fiscal discipline is critical to containing inflation below the 5% goal. The Congolese franc (CDF) remained stable at around 920-930 per US dollar in the past five years. The situation seems to be deteriorating in 2016, and data available for the first seven months of the year show inflation accelerating to 2.2%, the exchange rate depreciating to 990 CDF per US dollar, and reserves declining to 4.5 weeks of imports.

The government has been committed since 2010 to working closely with the World Bank on establishing a mechanism for the systematic improvement of economic governance. The two parties have established a joint mechanism for monitoring the progress on reform implementation. 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 three years, there have been significant progress in the implementation of these measures. Almost all the contracts signed by the government in the oil, mining, and forestry sectors are available to the public. The DRC is committing in the Extractive Industries Transparency Initiative (EITI) and regularly publishes revenues from natural resources. However, achieving a full competitive process for the awarding of mining, oil, and forestry contracts requires additional efforts.

Social Context

Despite an impressive economic growth rate and a reduction in the poverty rate from 71% in 2005 to 64% 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 United Nations Human Development Index in 2015, and its per capita GDP, which stood at $442 in 2015, 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: Oct 24, 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 DRC portfolio is dynamic and shifting from an “emergency” mode over the past five to ten years to one of “sustainable development” for the country’s present and future. The DRC’s portfolio currently has 24 projects (excluding regional projects, but including grants) and 57 trust funds; with over 42% of the commitments (out of $2.51 billion) disbursed.  The portfolio is spread across sectors, with close to 63% of the commitment in infrastructure (transport, energy, urban and water), 16% in human development, 15% in private sector and agriculture, and 6% in governance and mining.   The DRC Performance and Learning Review (PLR) was completed on April 12, 2016. It confirms that the Country Assistance Strategy (CAS) objectives are still aligned with DRC development goals, and that 10 of the 14 outcomes are on track. The first round of consultations for the Systematic Country Diagnostic has been completed. The World Bank is now planning a second round with key government counterparts. A new Country Partnership Framework (CPF) will be prepared next year.

Last Updated: Oct 24, 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: Oct 24, 2016

Donors are organized through the “Donors Coordination Group (GCP)” and aim strengthen the dialogue with the Government of DRC in order to reach mutual commitments for cooperation and to identify ways to improve internal coherence within the development partners’ community. The World Bank continues to strengthen its partnership with development partners within the Donors Coordination Group (WBG) and also bilaterally. For example, UN-World Bank collaboration has been particularly critical to achieving important accomplishments in a number of sectors including demobilization, education, and health. In social protection, the WBG, working with UNICEF and USAID helped put in place government capacity to monitor services quality delivery in child protection. WBG leveraged financial support from United Kingdom’s, France’s, and Belgium’s development agencies for its public financial management and public administration support activities.

Last Updated: Oct 24, 2016