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DRC: Ituri-North Kivu Conflict Unlikely to Escalate, According to Moody’s

DRC: Ituri-North Kivu Conflict Unlikely to Escalate, According to Moody’s

Chances that the conflict in the Ituri and North-Kivu provinces, near Rwanda and Uganda, will spread along the eastern border of the Democratic Republic of Congo (DRC) in the medium term are low. Moody’s, the US rating agency, projected this while recognizing that the conflict challenges the DRC’s economic growth.

"Political risks are heightened by the resurgence of the M23 rebel group in the east, leading to ongoing security concerns and humanitarian issues. Although instability in North and South Kivu is likely to continue, the risk of large-scale cross-border conflict remains low," Moody’s wrote in a report issued on October 23, 2024.

This outlook is good news for the DRC's public finances. The Congolese government has noted that "the persistence of war in the eastern part of the country for more than 20 years constitutes one of the major risks weighing on public finances," according to a document attached to the 2025 finance bill.

Since a state of siege was declared on May 6, 2021, in Ituri and North Kivu, spending related to security operations has exceeded 100%. For example, security expenditures rose from 50% in 2020 to 336% in 2021 and are projected to reach 508% in 2022. This limits funding for other areas, especially capital projects.

Around 6.3 million people were displaced, and as many needed humanitarian aid, in 2023. A worsening situation "could lead to increased pressure on exceptional expenditure allocated to the Ministry of Humanitarian Actions and National Solidarity between 2025 and 2027," which would also affect other sectors like health.

The situation, if worsened, could also hurt tax mobilization in regions like North Kivu and Ituri. "Revenues collected at the Rutshuru (North Kivu) tax center fell by 87.2% from 2020 to 2023, going from 85.8 million Congolese francs in 2020 to just 11 million francs in 2023.The inaccessibility of tax offices in Ituri, Djugu, and Mambasa due to repeated attacks by armed groups and militias has resulted in a shortfall of nearly 10.3 million Congolese Francs in 2023 " according to the appendix to the 2025 Finance Bill.

Georges Auréoles Bamba

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