The socio-political situation has continued to be one of normalization since the end of the conflicts in 1999, thanks to peace efforts and the continuing Demobilisation, Disarmament, and Reintegration (DDR) process for ex-combatants. The country continues to benefit from the favourable oil market environment.  Real GDP growth was 7.8% in 2005 and 6.1% in 2006, but in 2007 it slowed to -1.1% in a recession due to the closing of one of the country’s largest oil fields (Nkossa) following a technical accident.  GDP should recover to a healthy 8.7% in 2008, with inflation remaining at a moderate 3% and the current account and budget balances maintaining surpluses of more than 10% of GDP, as in 2005, 2006, and 2007.

Development Policy

The predominance of the extraverted oil sector (more than 60% of nominal GDP, 85% of exports, and 75% of revenues) increases the economy’s sensitivity to external shocks, and because it is poorly integrated into the rest of the national economy, the sector does not provide enough opportunities for job creation to reduce poverty. Moreover, the Congolese economy is not competitive despite the country’s immense potential, and government efforts to attract private investment to non-oil sectors have not always produced the expected results. The business environment is marked by  extensive state control of the economy inherited from the country’s period of state socialism. On the social level, poverty has increased, with the proportion of poor people estimated at 50.7% of the total population (ECOM 2005). Social inclusion continues to be weak despite efforts made since the end of the conflicts. The Women’s advancement, equitable public resource management, the development of human capital, and improving the living environment continue to be the main topics of concern.

In March 2008, in order to more effectively combat poverty, the incidence of which was exacerbated by the conflicts, the Government adopted its full-fledged PRSP  for the 2008-2010 period. The Bank’s 2008-2012 Country Strategy Paper (CSP), in support of the PRSP, was approved by the Boards of Directors on September 9, 2008. It focuses on support to basic infrastructure, especially in the area of drinking water supply and sanitation, as well as improving the business climate.

Should additional resources be available, the Bank also plans to intervene in the energy sector. Through its private sector window, the Bank will provide support by participating directly in the Kouilou Potassium Extraction Project and could, as requested by the Congolese Authorities, take an equity participation in the capital of the Banque de l’habitat, which is currently being established.

The Bank has been reconstituting its portfolio since the normalization of relations with Congo at end 2004. It comprises four operations, including a DWSS study of Brazzaville and Pointe-Noire, as well as an institutional support project to be completed by end December 2008.