I. Brief summary of the major developments of the Congolese economy since 1960 until 2014

The major developments of the Congolese economy can be broadly circumscribed into four periods, namely :

  • 1959-1973 : Growth and low inflation ;
  • 1974-1988 : Slower growth and open inflation ;
  • 1989-2001 : Decline in growth, destruction of wealth and hyperinflation ;
  • 2002-2014 : Resumption of growth and inflation under control.

1. Growth and moderate inflation

With the infrastructure and organization after colonization, the Congolese economy is marked, during the period from 1960 to 1973 by the accumulation of domestic wealth. This process was affected by the political turmoil of the first five years of Independence and weaknesses in the management of public finances.

Economic recovery efforts between late 1967 and late 1973 have helped boost economic growth. They coincided with a favorable international environment driven by the rise in the price of copper. Both have determined the positive results during this period characterized by real GDP growth of 2.7% and a rise in the general price level of 27% annual average.

2. Slower growth and open inflation

This period, with a growth of 0.03% and an inflation rate of 57.6% on annual average, consists of two phases :

Phase from 1974 to 1982 was characterized by poor choice in economic policy that led to over-indebtedness of the country as part of the financing of major projects (INGA I and II, CCIZ, MALUKU Steel Industry ...) under the seal of corruption and kickbacks.

In an international context characterized by two oil shocks (five-fold and four-fold increase in oil prices respectively in 1973 and 1976) and the fall in the copper price in 1975 (after the failure of the strategy implemented by CIPEC, Intergovernmental Council of Copper Producing and Exporting Countries), the failed measures of “Zairianisation” or nationalization, Radicalization or State control and finally Retrocession, unorthodox management of public finance, accommodative monetary policy and the costs associated with late adjustment of exchange rate policy (transition with many delays in the fixity of the floating exchange rate regime) had as consequences shutdown of domestic wealth creation process.

Phase from 1983 to 1989 is that of economic adjustment effort through consolidation measures of fiscal policy and reforms in monetary policy (liberalization of interest rates), exchange policy (adoption of the floating exchange system and easing of exchange regulation). However, these demand management policies have not been relayed by structural scope policy and development initiatives.

3. Decline in growth, wealth destruction, hyperinflation and widespread impoverishment of the population

The period from 1989 to 2001 indicates the decline in the economy and Congolese society. The long political transition marks not only the culmination of institutional instability (more than 12 governments in 10 years) but mainly all social unrest (Lubumbashi events in 1990, interethnic conflict in 1991 and 1992, strikes, popular protests, dead cities ...) and economic (hyperinflation, looting of production equipment and company marketing in 1991 and 1993, breaking the bilateral and multilateral cooperation ...).

Disorder of Public Finance is evidenced by unsustainable deficits of treasure funded almost exclusively by direct advances from the Central Bank with the consequent rapid depreciation of the exchange rate and soaring domestic prices, 98% and 9800% in 1994. Armed conflict, after the failure of the National Conference, had serious impacts on both economic and social situation. During this period, the Real GDP declined by 4.5% on average. The rise in the general price level was nearly 2,000% on average. The incidence of poverty has averaged 80% and the unemployment rate to 84%.

4. Resumption of growth and inflation under control (2001 to the present day)

During this period, coinciding with the resumption of multilateral and bilateral cooperation, the economic results were mainly the result of the application of restrictive cyclical economic policies and structural reforms of first-generation (partnership in mining, One-stop Shop in Matadi Port, setting up the chain of expenditure, independence of the Central Bank, liquidation of distressed banks).

These policies helped to break hyperinflation (rise in the general price level of 17% on annual average, to boost economic growth, reduce unemployment (from 84% to 40% on average) and poverty 80% to 63%.

During the last three years (2012 to 2014), economic performance of the DRC has been remarkable in terms of economic growth (average of 8.2% against 5.3% for Sub-Saharan Africa) and the inflation (1.6% against 7.1% on average for Sub-Saharan Africa). This growth remains resilient : situated at 6.1% on average, five years before the financial crisis of 2009, when it fell to 2.8%, the change in real GDP increased 7.7% five years later. For Sub-Saharan Africa, from 7.1% before the crisis when it was reduced to 4.1%, growth amounted to 5.3% five years later. Given the improved growth in a low inflation environment, the sacrifice ratio of the Congolese economy is almost zero.

However, weaknesses continue to characterize the mobilization of domestic revenue (public revenue excluding grants of 13.9% on average in percentage of GDP against 21.1% for Sub-Saharan Africa), the level of reserves (2 months’ autonomy for 5.2 for Africa), access to job market (especially for youth and women), the quality of infrastructure. This is what the Government is currently focused on whose main concern is the structural transformation of the economy to speed up emergence. For that purpose, all private investment projects that are grafted in this process of transformation can only be supported and encouraged by the authorities through the National Agency for Investment Promotion.

II. Some illustrations of the Congolese economy by graphs and tables

II.1. Real sector

Source : BCC and INS.

Source : BCC and INS.

Source : BCC.

Source : BCC.

The revival of economic activity in the 2000s is still mainly influenced by the performance recorded in the primary sector (mainly mining and oil extraction). Between 2010 and 2014, the average contribution of this sector to growth was 67.9%, significantly higher than its average contribution before 2009 which was approximately at 17.6% between 2006 and 2008. The secondary sector (manufacturing, building, food industry) also showed resilience with an average contribution of 11.7% after 2009 against 2.6% between 2006 and 2008.

Table 1. Contribution (added values in billion CDF of 2005) : 2005 – 2014

Source : BCC.

II.2. Public Finance Sector

Source : IMF Report on regional economic prospects, Sub-Saharan Africa, October 2014.

Source : IMF Report on regional economic prospects, Sub-Saharan Africa, October 2014.

II.3. External Sector

Source : BCC.

Source : BCC.

Table 2. Congolese external position : 2004 – 2014.

In terms of level, international reserves increased from USD 450 million in 2004-2008 to 1.65 billion USD in 2014. In months of imports, autonomy increased from 0.4 months (1.6 weeks) to 1.98 months (7.9 weeks) - values respectively below the Sub-Saharan average.

Table 3. Components of the Balance of Payments (in million USD)

The deficit of the current account balance is stopped at US $ 2.3 billion on average during the period under review. It is largely offset by net inflows in the capital account and financial operations of $ 4.9 billion USD on average. This therefore entails an overall positive balance of 2.6 billion USD.

II.4. Monetary sector

Source : BCC.

II.5. Social indicators and the labor market

Despite their still worrying levels, the main social indicators have shown positive developments between 2009 and 2012. The unemployment rate has been declining steadily since 2012. It would have decreased by approximately 6.1 marks between 2012 and 2014.