Congo: African Development Bank Provides € 187 Million Loan To Support Economic Reforms

AfDB NEWS & EVENTS

16-Dec-2019

To cope with the drop in its tax revenue and the effects of the recent fall in the price of a barrel of oil, notably a slowdown in growth, the Congo obtained financial support of 187 million euros on Friday in Abidjan. the African Development Bank.

The loan, approved by the Bank's Board of Directors, should allow the implementation of the Economic and Financial Reform Support Program (PAREF). This aims to create the conditions for sustained economic growth through the strengthening of budgetary consolidation and the revival of the Congo's economy.

"By approving this operation, the Bank will support the Congo to finance its critical social spending, clear its external arrears and reimburse its internal arrears to support the private sector, which has been hit hard by the economic crisis," explained Abdoulaye Coulibaly, Director of the Coordination Office for Governance and Public Financial Management at the African Development Bank.

In its implementation, PAREF will first focus on improving debt management processes and rationalizing expenditure through, in particular, the review of the tax incentive system, the control of the wage bill, the strengthening the efficiency of public investment and finally increasing the supervision of public enterprises. The objective is to improve the management of debt and budgetary risks.

The Program will also focus on the mobilization capacities of the government through the reorganization and modernization of the tax and customs services, the interconnection of the Tax and Customs databases. This operation consists of reducing the risk linked to the budgetary impact of the oil cycles, through the establishment of a stabilization fund as well as ensuring the recovery of the oil sector.

The proposed transaction should provide the Congolese authorities with the resources necessary to absorb the financial shock linked to the recent drop in revenues following the fall in oil prices on international markets.

The African Development Bank's portfolio in Congo Brazzaville includes six operations pertaining only to the public sector and representing a total of commitments estimated at 208 million euros.