The economic context of Congo

Economic Indicators

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Heavily dependent on oil revenues, the Republic of Congo’s economy is regularly impacted by fluctuations in global oil prices. After the recession induced by low oil prices and aggravated by the Covid-19 global pandemic, economic growth rebounded in 2022. The 2021 contraction of -0.6% GDP turned into a positive growth of 4.3% GDP in 2022, that is expected to further accelerate to 4.6% GDP in 2023 and 7.3% GDP in 2024 (IMF). Economic growth is driven by renewed investment by the largest oil producers, high oil prices, a rebound in oil production, domestic arrears repayments, government investment in agriculture and infrastructure, and steady activity in mining, manufacturing, and services (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. After seven years of recession, the Congolese economy rebounded in 2022 despite the deteriorating international environment, driven by higher oil prices and the dynamism of non-oil sector. Reflecting the authorities’ efforts to restore debt sustainability, budget surplus increased from 1.7% GDP in 2021 to 9% GDP in 2022, and is expected to remain high at 6.4% GDP in 2023 and 2024 (IMF). However, the non-oil primary deficit and net domestic financing substantially exceeded their targets, due to the introduction of a subsidy to the national oil company (SNPC) for importing fuel (IMF). Public debt decreased from 103.6% GDP in 2021 to 82% GDP in 2022, and is expected to further reduce to 73.9% GDP in 2023 and 64.5% GDP in 2024 (IMF). It is assessed as sustainable but at high risk of debt distress. Inflation increased from 2% in 2021 to 3.5% in 2022, and it is expected to reduce to 3.2% in 2023 and 3% in 2024 (IMF). Inflationary pressures are driven by high global fuel and transport prices inflating food imports bill, but are contained by food price regulation and subsidised public transport costs (IMF). 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% in 2021 according to the World Bank. The country ranked 153rd in the world on the 2021 Human development index, falling 4 places. Unemployment rate in Congo was estimated at around 22.2% in 2021 (World Bank, modeled ILO estimate).

Main Sectors of Industry

In Congo, agriculture contributes to 9.5% of GDP and employs 34% of the active population (World Bank, 2021), 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 23.5% 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 the largest share of the country's total annual oil production. The country boasts significant hydrocarbon reserves, with an estimated 1.8 billion barrels of oil reserves and 284 billion cubic meters of natural gas (OPEC).

The services sector accounts for 60.2% 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.

 

Breakdown of Economic Activity By Sector	Agriculture	Industry	Services
Employment By Sector (in % of Total Employment)	36.3	21.2	42.5
Value Added (in % of GDP)	8.5	36.2	48.5
Value Added (Annual % Change)	3.1	-1.7	5.5

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

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