The Democratic Republic of Congo (DRC) and the International Monetary Fund (IMF) have reached a preliminary agreement for a new program supported by the Extended Credit Facility (ECF) and the Resilience and Sustainability Facility (RSF). According to an IMF  note issued on November 13, 2024, this new three-year program is backed by nearly $3 billion in financing, compared to the $2.5 billion initially requested by the government. It includes a financial package of $1.77 billion under the ECF, up from the planned $1.5 billion, and $1.1 billion under the RSF, up from $1 billion.

The new staff-level agreement still needs to be validated by the IMF Executive Board. While the Board is set to review the document in January 2025, this step should be a formality, as the Board of Directors rarely disavows its services.

The new program aims to improve governance and transparency, foster solid and inclusive growth by combating high living costs, and invest in infrastructure, priority social sectors, and agriculture. It also aims to diversify the economy, create jobs, and improve resilience in the face of climate change. 

"The DRC is singularly well placed to play a central role in the global transition to a low-carbon economy, thanks to its vast forest and water resources, as well as its large reserves of 'green' minerals," notes the IMF.

Notwithstanding economic and inflationary pressures, the IMF believes economic growth should remain "resilient" above 5% during the new program. In comparison, inflation should return "to the level of the 7% target set by the Central Bank of Congo by 2026," says Calixte Ahokpossi, the Fund's mission chief for the country.

More funding incoming

For many years now, the DRC has been trying to secure international funding to boost its economy, in line with an ambition to overhaul the economy, through industrial development. The new IMF program should send a positive signal to investors seeking business opportunities in the country. 

"This agreement marks a crucial step for the DRC, which could mobilize up to $800 million in budget support," said Congolese Finance Minister Doudou Fwamba during the November 12 meeting between President Félix Tshisekedi and the IMF mission chief.

This program follows the conclusion of a previous agreement made in 2021, which totaled $1.5 billion. Despite a challenging context marked by renewed conflict in the eastern region and the spread of monkeypox, Congolese authorities successfully passed all reviews of the previous program, which the Fund deemed satisfactory.

However, former Finance Minister Matata Ponyo said the IMF is complacent. In an October 12 article published in the scientific journal Congo Challenge, a piece co-authored with economist Jean-Paul K. Tsasa, the former Prime Minister argues that these reviews were completed while the country failed to meet several criteria and benchmarks. The authors also claim that some funds disbursed by the IMF were misappropriated and even accuse the Bretton Woods institution of complicity.

PM with Ecofin Agency