The economic context of Congo

Economic Indicators

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

Heavily dependent on oil revenues, the Republic of Congo’s economy was already hurt by low oil prices when it was hit by the Covid-19 global pandemic. The country’s GDP contracted by -8.2% in 2020, and despite the nascent recovery, economic growth remained negative for the seventh consecutive year in 2021 (-0.2%) (IMF). According to IMF estimates, the recession should turn into a positive growth of 2.3% in 2022 and 3% in 2023, driven by higher oil prices, a rebound in oil production, a vaccine rollout, social spending, domestic arrears repayments, and expansion of non-oil sectors (IMF). Downside risks include a possible worsening of the pandemic, volatility in oil prices and production, natural disasters and slow reform implementation (IMF).

The Congolese economy is largely dominated by oil production, which accounts for 80% of exports and 60% of domestic revenues (Coface). This oil dependency makes the country vulnerable to shifts in commodity prices. Already in recession due the collapse of oil prices, the economy was further hit by the measures put in place to contain the Covid-19 pandemic. The recovery in oil prices allowed the -1.2% GDP budget deficit to switch back to a surplus of 1.5% GDP in 2021 (Coface). Budget surplus is expected to increase to 3.3% GDP in 2022 thanks to the authorities efforts to restore debt sustainability (Coface). Congo's public debt, which was already unsustainable before the pandemic, soared to an estimated 101.1% GDP in 2020 (IMF), threatening the stability of the whole financial system. The country started a process of debt restructuring with its creditors and is committed to fiscal prudence. According to IMF estimates, public debt decreased to 85.4% GDP in 2021, and is expected to further reduce to 76.9% GDP in 2022 and 73% GDP in 2023. Inflation staid stable at 2% in 2021, and is expected to remain close to the CEMAC criterion of 3% in 2022 (2.8%) and 2023 (3%) (IMF estimates). In January 2022, the IMF approved a 36-month arrangement under the Extended Credit Facility in an amount equivalent to about USD 455 million, to help the country maintain macroeconomic stability and support economic recovery. Reducing debt vulnerabilities, strengthening domestic revenue mobilization and public spending efficiency, and advancing wide-ranging structural reforms are the main priorities. The authorities are also committed to the National Development Plan 2022-26, which focuses on social and infrastructure spending. Lack of economic diversification is a major challenge for the country. While some progress has been made in translating its natural resources into economic growth, the country has not fully succeeded in leveraging them to achieve robust socio-economic outcomes.

Poverty rate is alarming, reaching 52.5% in 2020 according to the World Bank. The country ranked 149th in the world on the 2020 human development index, falling 11 places. Unemployment rate in Congo was estimated at around 10.3% in 2020 (World Bank).

Main Sectors of Industry

In Congo, agriculture contributes to 9.6% of GDP and employs 34% of the active population (World Bank, 2020), most of whom practice subsistence farming. Though it possesses many fertile lands, only a minor part of these lands is cultivated (less than 10%). As the sector fails to meet its domestic demand, Congo relies heavily on food imports. The latter accounts for about 80% of domestic food consumption. The main crops are cassava, plantains, bananas, peanuts, and palm oil.

The industrial sector contributes 31% of GDP and employs 21% of the workforce. The petroleum, timber, and mining sectors are the economy’s main drivers. The oil sector, in particular, is the country's major revenue earner, though Congo is too exposed to fluctuations in commodity prices. This sector is dominated by foreign companies, with the French giant TotalEnergies accounting for an estimated 70% of the country's total annual oil production. The country boasts significant hydrocarbon reserves, with an estimated 1.6 billion barrels of oil reserves and 90 billion cubic meters of natural gas.

The services sector accounts for 53.7% of Congo’s GDP, and employs 45% of the workforce. The sector is based mostly on support services for the oil sector. Tourism struggles mostly due to security issues and insufficient infrastructures. While it is extremely buoyant, Congo’s banking sector remains less dynamic compared to other countries in the region.
In 2020, the measures put in place to address the COVID-19 pandemic such as lockdown, border closures, curfews and closure of non-essential businesses impacted Congo's economic sectors, especially the service and industry sectors.

 

Breakdown of Economic Activity By Sector	Agriculture	Industry	Services
Employment By Sector (in % of Total Employment)	33.5	21.5	45.0
Value Added (in % of GDP)	9.5	23.5	60.2
Value Added (Annual % Change)	1.5	-7.9	5.7

Source: World Bank, Latest Available Data. Because of rounding, the sum of the percentages may be smaller/greater than 100%.

 

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Indicator of Economic Freedom

Definition

Definition:

The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.}}

Score:

50,7/100

World Rank:

156

Regional Rank:

37

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation

 

 

Sources of General Economic Information

Ministries

Ministry of Finances and Budget
Ministry of Hydrocarbons
Ministry of Special Economic Zones and Economic Diversification

Statistical Office

National Institute for Statistics (currently unavailable)

Central Bank

Bank of Central African States

Stock Exchange

The ROC does not have a stock exchange. ROC-based companies may be listed on the Douala Stock Exchange (DAC) that was recently merged with the CEMAC Zone Stock Exchange (BVMAC).

Economic Portals

Fortune of Africa Congo
Les Echoes
Journal de Brazza
France24