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PRESS RELEASEJune 29, 2023

Republic of Congo Economic Update: Removing fuel subsidies can free up resources for more investments in infrastructures and human capital

Tenth Economic Update for the Republic of Congo: Reforming Fossil Fuel Subsidies

BRAZZAVILLE, June 29, 2023 – A new report released today shows that growth in the Republic of Congo picked up in 2022, reaching 1.5% of GDP in 2022, and is set to accelerate to 3.5% in 2023, driven by increased investment.

The Republic of Congo Economic Update highlights that inflation remained contained, but increased food prices is exacerbating socio-economic challenges. An estimated 56% of the population is already severely food insecure and poverty remains high with more than one in two Congolese living with less than $2.15 a day in 2022.

This report focuses on fuel subsidy reforms and stresses that fuel subsidies benefit mainly the richest segments of the population.

In 2022, the sharp rise in global oil prices led to an increase in oil subsidies at 2.4% of GDP, which is higher than the country’s spending on social protection. While oil subsidies aim at supporting consumers’ purchasing power and, more particularly, that of the most vulnerable, these subsidies benefit the richest segments of the population, especially groups living in urban areas.

“The report notes the importance of strengthening social protection interventions to mitigate the impact of fuel subsidy reform on the most vulnerable,” says Korotoumou Ouattara, World Bank Resident Representative for Republic of Congo.

According to the lead author of the report, Marilyne Youbi, Economist, “Fossil fuel subsidies represent a significant fiscal burden in the Republic of Congo. The use of public funds to freeze retail fuel prices diverts resources from alternative uses, such as public spending on infrastructures, education, health, and social services, in a country where human capital development has stagnated over the last decade.”

The report shares best practices for implementing fuel subsidies reforms and identifies targeted measures to mitigate the impact of a fuel subsidy reform on affected groups and sectors, mainly: 

  • Reinforcing social safety nets to mitigate the immediate impact of fuel subsidy reform.
  • Increasing transparency of public financial management.
  • Increasing public social spending especially during critical times of a subsidy reform to rebuild trust between a government and its constituencies.
  • Increasing productive structural public investments to serve the double purpose of reinforcing trust in public action as well as contributing to a positive structural transformation. 


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Franck Bitemo,
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