World Bank warns DR Congo is facing enduring economic crisis

World Bank warns DR Congo is facing enduring economic crisis

02/02//2017

DR Congo is experiencing an economic crisis, the World Bank (WB) has warned in its 4th report on the monitoring of the economic and financial situation of the country presented on Tuesday in Kinshasa.

Among the main indicators of this crisis, the World Bank cites the revision of the rate of growth of the DRC from a high of 7% to the current average growth of 2.5%.

“This growth when compared to the population growth of the DRC, which is almost 3%, means we are now getting a per capita growth rate of 0% or less,” explained Emmanuel Pinto, the World Bank’s chief economist in the DRC.

Another indicator, the same document reveals is the depreciation of the Congolese Franc in relation to the US dollar. According to the World Bank, the depreciation rate of the Congolese franc rose from -1 in 2015 to over 11% on 20 December 2016.

It’s a situation which the Bretton Woods institution blames on the adoption by the DRC of certain inappropriate economic policies.

The Congolese economy has been hit hard by lower commodity prices and slower Chinese demand, which consumes about 40% of DRC’s exports.

In addition, the suspension of copper production by Glencor for 18 months has precipitated the crisis, the World Bank noted in its report.

To rectify this crisis, this report recommends the resumption of IMF and the World Bank programs to allow the country to benefit from budgetary support.

It is also recommends that the Congolese government reduce public spending, increase domestic revenues and review its mining code.

By Ken Karuri 

Africanews