AfDB lends €187mn to Congo in support of economic reforms

The African Development Bank has approved financial support of around 187 million euros to Congo. The objective is to cope with the drop in its tax revenue and the effects of the recent fall in the price of a barrel of oil.

The loan will allow the implementation of the Economic and Financial Reform Support Program (PAREF). This aims to create the conditions for sustained economic growth through the strengthening of budgetary consolidation and the revival of the Congo's economy.

"By approving this operation, the Bank will support the Congo in financing its critical social spending, clear its external arrears and reimburse its internal arrears to support the private sector, which has been hit hard by the economic crisis," explained Abdoulaye Coulibaly, Director of the Coordination Office for Governance and Public Financial Management at the African Development Bank.

The Program will also focus on the mobilization capacities of the government through the reorganization and modernization of the tax and customs services, the interconnection of the Tax and Customs databases. This operation consists of reducing the risk linked to the budgetary impact of the oil cycles, through the establishment of a stabilization fund as well as ensuring the recovery of the oil sector.

PAREF will first focus on improving debt management processes and rationalizing expenditure through, in particular, the review of the tax incentive regime, control of the wage bill, strengthening the efficiency of public investment and finally increasing the supervision of public enterprises. The objective is to improve the management of debt and budgetary risks.