The Democratic Republic of the Congo (DRC), the largest country in Francophone Africa, has vast natural resources and spans a surface area of 2.3 million square kilometers. 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, the DRC has the potential to become one of the richest countries on the African continent and a driver of African growth if it can overcome its political instability.
The DRC is still recovering from a series of conflicts that broke out in the 1990s creating a protracted economic and social slump. Joseph Kabila has been head of state of the DRC since 2001. Presidential and parliamentary elections planned initially for November 27, 2016 have been delayed due to an outdated electoral register. Efforts to defuse the political crisis into which the country has since been plunged have been made by the African Union facilitator, Mr. Edem Kodjo, and the Congolese episcopate, acting as mediators between the Government and the opposition parties. A new agreement, signed on December 31, 2016, provides for a transition period during which power will be exercised jointly by President Joseph Kabila and the opposition, until presidential elections are held in late 2017.
The agreement also stipulates that the president will not seek a third term. Moreover, the signatories agreed that no revision of the Constitution will be attempted in that period. However, this agreement never entered into force. Since its signature, the president has nominated two prime ministers who have not been recognized by the opposition. Furthermore, the Independent National Electoral Commission (CENI) believes that the elections will not be able to take place in late 2017 as planned since revision of the electoral register has not been completed.
After sharply increasing to almost 9% in the 2013-2014 period, the GDP growth rate (excluding inflation) decelerated to 6.9% in 2015, then to 2.4% in 2016, its lowest point since 2001. This slump is mainly due to declining prices and a shrinking global demand for raw materials exported by the country, particularly of copper and cobalt, which account for 80% of its export revenue. This economic shock led to a deterioration in external accounts and a downturn in the country’s exchange rate in 2016, as well as a 31% drop in the exchange rate of the Congolese franc against the dollar, which fueled runaway inflation of almost 24%. In 2017, growth is expected to reach 2.6%, driven by the moderate increase in commodity prices and national mining production. However, the national currency is expected to continue its decline against the dollar as the rate of inflation increases.
Public finances also deteriorated in 2016, with a growing fiscal deficit of -1.6% of GDP against -0.2% in 2015. The drop in export revenue was reflected in a decrease in State revenue. Lacking access to domestic and international financial markets, the Government had to drastically reduce public expenditure to contain the deficit and limit monetary financing by the Central Bank of the Congo.
The Government has launched sectoral reforms to strengthen governance and transparency in the extractive industries (forestry, mining, and oil sectors) and to improve the business climate. Currently, almost all contracts signed by the Government are accessible to the public. The DRC participates in the Extractive Industries Transparency Initiative (EITI) and regularly publishes reports on revenues from natural resources. However, systematizing the procedures necessary for a competitive process in awarding mining, oil, and forestry contracts requires additional efforts on the part of the Government.
Despite a decrease in the poverty rate, from 71% to 64% between 2005 and 2012, the DRC still ranks among the poorest countries in the world, at position 176 out of 187 countries, on the most recent Human Development Index calculated by the UN (2015). The United Nations estimates that there are some 2.3 million displaced persons and refugees in the DRC and 323,000 DRC nationals living in refugee camps outside the country.
Last Updated: Dec 05, 2017