Congo Economic Outlook
- After rebounding to about 6% in 2014, growth fell back to 1.2% in 2015 but should reach 4.2% in 2016, though prospects could be affected by persistent low prices for oil.
- The speed and range of structural reform and of the diversification of the economy are still not enough to improve significantly the country’s social indicators and to achieve the Millennium Development Goals.
- Despite great potential, urban areas are not yet driving economic structural transformation and the national urban strategy still has to be developed to tackle the problems of rapid urban growth.
Growth slipped to 1.2% in 2015 (from 6% in 2014) because of a sharp fall in the world price of oil (60% of the country’s gross domestic product [GDP]) and slower expansion of the non-oil sector caused by less government investment. Inflation was stable at around 0.9%. Budget policy was tighter because of lower government revenue but the primary deficit still reached 9.3% of GDP in 2015. The current account deficit widened (with lower oil prices) from 2.6% of GDP in 2014 to 14.5% in 2015. Overall growth should be 4.2% in 2016 and 4.7% in 2017, driven by greater oil production from new wells and by robust transport and agriculture sectors. But fluctuating oil prices could upset these predictions.
Congo’s score on the UN Human Development Index improved slightly from 0.564 in 2013 to 0.591 in 2014, but the country’s social indicators remain below those of African states with similar income levels. Poverty fell from 50.7% of the population in 2005 to 40.9% in 2011 but is still higher than average for middle-income countries. Unemployment is high, affecting in particular 30% of young people between the ages of 15 and 29, because of the capital-intensive nature of the oil sector and the weakness of the non-oil private sector. Significantly improving social indicators is a major challenge and requires stronger and more inclusive growth, along with faster structural reform and economic diversification. This is urgent, especially because of rapid urban growth.
Congo is one of Africa’s most urban countries, with more than two-thirds of the population living in towns and cities. The chief motor for urban growth is the concentration of public services and economic activity in the two big cities, Brazzaville and Pointe-Noire. The urban economy supplies 80% of GDP, mainly from oil production at Pointe-Noire and administration and services based in Brazzaville. Urban areas have great economic potential but have not developed to drive the economy because of inadequate access to basic social services for a growing population; inadequate infrastructure that reduces urban mobility; unplanned urban spread; high unemployment (16%); and insufficient funding. The government aims to tackle these problems with the 2012-16 national development plan (PND) and has increased funding of the towns and cities (through its programme of “accelerated municipalisation”) which aims to build major social and administrative infrastructure there. But much remains to be done and the government needs to take on the challenges represented by towns and cities by coming up with a national urban development strategy that remains to be drawn up and complete town planning blueprints being drafted.