Congo-IMF Negotiations: Opinions are converging and the end of the tunnel is in sight

Open Tuesday, December 5, negotiations between the mission of the International Monetary Fund and the Congo will continue until December 20. Behind the tight curtains of ministerial cabinets, the future of Congo is at stake. IMF experts and Congolese authorities are digging the new paths of the Congolese economy through often frank and tough discussions. After moments of suspicion and informed feedback, especially on issues of governance and transparency, discussions were characterized by understanding and trust. Ongoing negotiations could lead to the formulation of an economic and financial program supported by the IMF.

From the beginning of the mission last Tuesday, the head of the IMF mission, Abdoul Aziz Wane set out the three main axes of the negotiations which are: the rebalancing of the 2018 budget exercise, the governance and the sustainability of the debt of the Congo evaluated with about 110% of Gross Domestic Product (GDP); or 5.329 billion CFA francs. According to some sources, the end of the tunnel is not far for the Congo which awaits its economic and financial program, as have already done other countries in the CEMAC zone, notably Gabon, Cameroon, Chad and CAR. But it must meet with demands made by the IMF as well as requirements relating to the three main areas of negotiations. Indeed, both parties should agree on a string of probably drastic but also unavoidable measures.

Thus, with regard to the "rebalancing of the 2018 fiscal year budget", it is a question for the Congo to undertake to cover the budget gap observed, by diversifying the portfolio of contributive activities to the State budget, notably the involvement of companies and public institutions. Also, on personal instructions of the Head of State, Congolese authorities are called upon to adopt a very ambitious social policy, by reinforcing the part of the budget devoted to funding of projects intended for youths and women. This is the commitment made by President Denis Sassou-N'Guesso to the Director General of the IMF, Christine Lagarde, in December 2016.

Ongoing reforms deserve to be pursued to promote inclusive growth, especially in the non-oil sectors. This growth must generate a sustainable increase in well-being and this supposes a fair sharing of growth dividends between individuals and social groups as well as engaging the country in reforms that could unleash the potential of the private sector, creating jobs and reducing the prevalence of poverty. “This goal can only be achieved in a transparent framework where information about the management of state resources is made available to the Congolese population and civil society organizations”, said the head of the IMF mission. In his various contacts with ministries and companies, Abdoul Aziz Wane insisted on the principle of transparency which, according to his statements, is not observed in the Congo, regardless of the country's accession to the EITI.

"Governance" which constitutes the second pillar of the negotiations is a sensitive subject, but not taboo. Governance, understood as the way in which the government manages the country's resources, ensures the functioning and control of the State, with a view to its development, for the benefit of the general interest, is one of the keys to inclusive growth. On governance and transparency, the Minister in charge of the economy, Gilbert Ondongo reacted by drawing the attention of the IMF mission, making a distinction between the weakness of the statistical apparatus and the lack of transparency and poor governance. The IMF head of mission suggests that the Congo, which does not have a good mastery on the subject, adopts appropriate strategies to correct this negative image. At the end of the last IMF mission, Congo pledged to conduct a diagnostic study on governance issues, to support visible and credible measures to improve the management of public enterprises and institutions, including the National Oil Company of Congo. To clean up this environment, which has become unhealthy, the fight against corruption is a shock therapy which the Head of State has made a point of duty.
Regarding the "sustainability of the public debt" which is the third axis of negotiations, Abdoul Aziz Wane said it is linked to predictable income that will allow the State to meet the interests of the said debt and other charges. It is valued at about 110% of Gross Domestic Product (GDP), or 5.329 billion CFA francs, excluding the debts considered contentious and the domestic arrears accumulated since 2014. This is the way the Congo is asked to make its commitments as a responsible State, by giving safe and clear guarantees, that is to say, expressing its capacity to repay its loans and restore its solvency. This at a time when the country's economic activity continues to shrink as government deposits continue to decline.
Today, the authorities are talking about strengthening the integrity of the budget and treasury management processes and prioritizing spending to avoid the accumulation of backlogs. At the same time, the government is obliged to negotiate with its creditors, led by China, to obtain the possibility of "reprofiling or refinancing" its debt.

Jules Débel