The Govt Board of the Worldwide Financial Fund (IMF) accomplished at present the fourth overview of the Republic of Congo’s association beneath the Prolonged Credit score Facility (ECF), which was accepted on January 21, 2022. The completion of the overview permits for the quick disbursement of SDR 32.4 million (about US$ 43 million), bringing complete disbursements beneath the ECF to SDR 259.2 million. This financing from the IMF will proceed to assist the authorities implement their growth insurance policies, preserve macroeconomic stability, and strengthen financial restoration amid excessive inflation, together with meals, unstable oil costs and tightening monetary situations.
Program efficiency was broadly passable, however structural reforms skilled delays. The authorities addressed the breach of efficiency standards associated to the fiscal place and debt service administration, for which waivers for non-observance have been granted, with sturdy corrective actions. Two reform benchmarks aiming for extra transparency, larger fiscal revenues, and improved public funding administration have been accomplished with delay, whereas efforts are being made to prop up higher execution of social spending.
Fiscal coverage stays centered on lowering fragilities whereas enhancing debt sustainability. Latest progress in gasoline subsidy reform and the authorities’ dedication to pursue fiscal consolidation in 2024 are commendable. Sources free of lowered oil-related transfers, along with improved home income mobilization, will assist speed up growth spending and improve social expenditures focused at susceptible teams.
Constructing on current advances, sustained structural reform implementation is required. Improved administration of public funds particularly on public funding and debt will facilitate bigger, more practical, and better high quality growth spending. Broader governance reforms, encompassing anti-corruption and transparency, will even be vital for enhancing the enterprise surroundings.
Insurance policies beneath this ECF-supported program will proceed to assist cut back fragilities and place the Republic of Congo onto a path of upper, extra resilient, and inclusive development. It’ll additionally contribute to the regional effort to protect exterior stability for the Central African Financial and Financial Union (CEMAC).
On the conclusion of the Govt Board’s dialogue, Mr. Kenji Okamura, Deputy Managing Director and Appearing Chair, made the next assertion:
“The Republic of Congo’s restoration has continued, supported by larger oil revenues, sturdy non-oil development and gradual reform implementation. Nevertheless, substantial risks-including from potential escalation of regional conflicts, local weather shocks, oil value volatility, decrease oil manufacturing, and slower reform implementation-remain. Whereas inflation has picked up, world disinflation and acceptable regional financial coverage are anticipated to information it again to focus on stage. Amid the unsure world surroundings, the authorities reiterated their dedication to pursuing larger, extra resilient, and inclusive development whereas sustaining macroeconomic stability and debt sustainability.
“Program efficiency was broadly passable. Most end-June 2023 quantitative efficiency standards have been met. Nevertheless, the end-June efficiency criterion on the non-oil major stability was narrowly missed, and the continual zero ceiling efficiency criterion on new exterior arrears was breached by cases of delayed debt service. Progress in advancing structural reforms has additionally continued, albeit with some delays. Robust corrective actions have been taken to strengthen program efficiency.
“The authorities are inspired to proceed advancing fiscal consolidation, whereas stepping up social and growth spending. Key measures embody continued streamlining of gasoline subsidies coupled with enhanced social help focused to the susceptible, broadening of the tax base, and stepped-up assortment of tax arrears. Bettering execution of social spending is paramount.
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“Strengthened administration of public funds and debt will even be vital to make sure debt sustainability, keep away from accumulation of recent arrears, and enhance the effectiveness of public spending. Finalizing the reorganization of the debt administration workplace, enhancing data sharing and coordination on points with debt service, and growing transparency on public debt can be key.
“A lot-needed financial diversification, based in non-public funding, will hinge on deepening structural and governance reforms. In that context, enhancing transparency of public funds and the oil sector, additional operationalizing the anti-corruption structure, together with enhancements to the AML/CFT framework, can be pivotal. Elevating monetary inclusiveness, guaranteeing steadfast implementation of state-owned enterprise reforms, and adapting to dangers emanating from local weather change will even help inclusive and resilient development.”
