BRAZZAVILLE, September 18, 2014—The World Bank launched today the first Economic Update report for the Republic of Congo which monitors the economic and financial situation in the country.
"This report is an important element of the World Bank’s program in the Congo, a country that has benefitted from the boom in oil revenues for almost a decade and that is engaging in an ambitious rehabilitation and construction program of its infrastructure, but social development is not improving at the same rate," said Sylvie Dossou, World Bank Country Manager for the Republic of Congo.
The report is intended to encourage constructive dialogue on public policies with the country's authorities, academics, the private sector, and civil society.
Congo’s economy is growing, but at an inadequate pace to further its progress toward development.
Its current growth is lower than the rate projected in the 2012–2016 National Development Plan (NDP). From 2011 to 2013, average growth was 3.5%, instead of the targeted 8.5% to achieve the country's development objectives. This insufficient growth is due to the below-average performance of the oil sector. However, the relatively strong performance of nonoil sectors helped mitigate the performance of the oil sector.
Favorable indications of sustained growth over the next three years
The annual growth rate of the economy is expected to reach 7.6% from 2014 to 2016. Support to this projection includes strong growth of the non-extractive industries due to the government's diversification policies and investments in infrastructure; stabilization of oil production with the discovery of new deposits over the coming years; and the prospect of implementing effective mining activities.
However, several factors could affect growth that need to be addressed. Internal pressures such as rent seeking and uneven distribution of resources between infrastructure and the social sectors; poor absorptive capacity in regards to investments spending; weak expenditure chain; spending on the preparations for the 2015 All Africa Games in Brazzaville; and the volatility of oil prices.
"Investing efficiently in infrastructure could help the Congolese economy make up for lost time on the path to development," stated Fulbert Tchana Tchana, Senior Economist for the Republic of Congo.
Economic infrastructure, driver of sustainable growth
The cost of infrastructure and the ability to gain access to it is a significant constraint to the development of the private sector in Congo. Current and/or planned investments can contribute to economic diversification because they will allow for a considerable reduction in the cost of production inputs.
Need for better implementation of public finance reforms
In order to boost the country's development, the government could implement reforms on sound public finance management, particularly to infrastructure investment: strengthen the preparation and planning of investment projects, establish a system for monitoring investment projects from commitment to budget execution, streamline procurement procedures and the disbursement system. The government could also speed up the distribution of electricity to consumers in order to stimulate manufacturing. Finally, it could develop monitoring and evaluation tools for the implementation of the country's economic diversification program.