Democratic Republic of Congo Economic Outlook
- The growth rate of the Congolese economy fell from 6.9% in 2015 to 2.5% in 2016, but could rebound to 4.0% in 2017 and 5.2% in 2018, given the expected rise in prices of the country’s raw materials.
- The DRC made some progress in terms of human development in 2016, but that progress remains fragile.
- Significant efforts will be required to operationalise the country’s strategic frameworks for entrepreneurship and industrialisation.
The Congolese economy was harmed in 2016 by the decline in world prices of its main exports and by a volatile political and security climate. Growth, propelled by the manufacturing industries, trade, agriculture and transport and telecommunications, fell from 6.9% in 2015 to 2.5% in 2016. The economic slowdown and the drop in exports reduced the country’s fiscal leeway in a context of rigidity of expenditure. Foreign exchange reserves fell, leading to a one-year depreciation of the Congolese franc (CDF) by 26% and a worrying rise in inflation, which reached 11.24% at the end of 2016. If the recent upswing in the price of copper continues, economic growth could reach 4.0% in 2017 and 5.2% in 2018. To consolidate these figures, a stable political and security climate is essential, along with a firm commitment from the authorities to implement measures adopted in January 2016 for economic stabilisation and stimulus, in particular those aimed at increasing domestic revenue and economic diversification.
The Democratic Republic of Congo (DRC) did make some progress in the field of human development in 2016 despite the fragile politico-security context. The government adopted new sectoral programmes for health and education in connection with its National Strategic Development Plan (PNSD), which is currently being adopted. Following the gradual extension of free primary education and the development of the school-building programme, school enrolment, literacy and completion rates rose slightly in 2016, although the quality of teaching is not yet satisfactory. The public health situation, however, did not improve in 2016. The progress made, while insufficient, did allow the DRC to improve its Human Development Index (HDI) ranking which, according to raw data from the Core Welfare Indicators Questionnaire survey (CWIQ), should rise from 0.443 in 2014 to 0.464 in 2016, an improvement of 4.7% in two years. The social situation could worsen in 2017 if there is significant deterioration of the country’s economic and financial situation, in a context where elections are at the forefront of the agenda.
There is a real political will to promote entrepreneurship and industrialisation in the DRC, which has adopted a national development strategy for small and medium-sized enterprises (SMEs), an industrial policies and strategies paper and a national incubator programme to help generate jobs through the training and mentoring of small and medium-sized private operators. Nevertheless, the implementation of these strategies and programmes remains limited, notably due to a lack of financial resources. Additional efforts are needed to: i) strengthen entrepreneurship through education and skills development; ii) facilitate exchanges of technology and innovation; iii) improve access to finance for entrepreneurs; iv) improve the regulatory climate for entrepreneurship; v) establish links between national SMEs and foreign companies; and vi) strengthen the public-private dialogue.