A team of the International Monetary Fund (IMF) led by Dalia Hakura, visited Brazzaville during March 17-23, 2015. The mission reviewed recent macroeconomic developments and the near-term outlook, and sought the authorities’ input on the agenda for the 2015 Article IV consultation, planned for May 2015. The mission also took part in the joint BEAC/IMF regional conference on “Finance for All: Promoting Financial Inclusion in Central Africa,” chaired on the IMF side by African Department Deputy Director Anne-Marie Gulde-Wolf.
At the end of the mission, Ms. Hakura made the following statement:
“In recent years, the Republic of Congo benefited from high oil prices. Government spending doubled between 2010 and 2013. This provided support for economic growth which averaged close to 5 percent, while fiscal and external buffers were built up.
“The current low international oil prices, if sustained, would alter the Republic of Congo’s outlook. This would add urgency to the IMF recommendations made in the context of the 2014 Article IV consultation. Ensuring macroeconomic stability in the near- and medium-term requires accelerating the pace of fiscal consolidation in view of the limited remaining lifetime of oil reserves, while at the same time enhancing the efficiency of government spending.
“The 2015 budget is based on an oil price assumption of U.S. $70 per barrel. While considerably less than the oil price assumption in the 2014 supplementary budget (U.S. $105.2 per barrel), this now seems over optimistic considering the level of oil prices during the first quarter of the fiscal year and the uncertain outlook. The Republic of Congo authorities remain under pressure to raise spending for the All Africa Games in the fall of 2015 and other priority expenditure.
“While welcoming the authorities’ intention to monitor the situation closely, the mission encourages them to expedite preparation and submission to parliament of a supplementary budget that reflects the new reality of substantially lower fiscal revenues. It is important that line ministries work with realistic spending budgets.
“The mission also recommends that steps be taken to further strengthen public financial management and improve the quality of government spending, including by prioritizing capital spending to maximize its impact on longer-term growth and poverty reduction. In this regard, the authorities are encouraged to follow up on recommendations from the ongoing Public Expenditure Management and Financial Accountability Review by the World Bank and other development partners.
“The mission met with the State Minister of Economy, Finance, Planning, Public Portfolio and Integration, Mr. Ondongo; Deputy Minister in Charge of Planning and Integration, Mr. Mokoko; National Director of the Central Bank, Mr. Ondaye; and other senior officials. Meetings were also held with representatives of the private sector and development partners.
“The mission thanks the authorities for their hospitality and looks forward to continue working with them in the near future.”