Congo Proposes 63% Increase in Budget to $10.2 Billion

(Bloomberg) -- Democratic Republic of Congo’s new government is asking for a budget of 16.895 trillion Congolese francs ($10.2 billion) for 2020, 63% higher than this year’s plan.

The Budget Ministry presented the draft to the National Assembly Friday, and forecasts a 56% increase in domestic revenue -- mainly from plans to fight fraud and tax evasion -- while external revenue will more than double.

The government is also counting on $500 million from the World Bank next year. The Washington, D.C.-based lender has offered $1.5 billion in budget support over a three-year period if Congo agrees to a new formal loan program with the International Monetary Fund.

An IMF team is currently in Congo to discuss preparations for a new program, central bank governor Deogratias Mutombo said Friday. An IMF facility could also unlock other funding from the African Development Bank and European Union, he said.

The IMF halted its last loan program with Congo in 2012 amid concerns about corruption in the mining industry.

Congo’s economy is heavily reliant on mining for copper, cobalt, and gold and some oil. On Friday, the central bank lowered its economic-growth target for 2019 to 4.6% due to “a slowdown in activity in the extractive sector.”

President Felix Tshisekedi has promised a series of ambitious social programs, including free primary-school education for more
than 20 million children.

The draft budget envisions Congo’s economy will grow 5.4% to 97.863 trillion francs next year, while inflation will average
6.8%. The exchange rate in the heavily dollarized economy will average 1,687 francs to the dollar.

To contact the reporter on this story: Michael J. Kavanagh in Kinshasa at mkavanagh9@bloomberg.net

To contact the editors responsible for this story: Gordon Bell at gbell16@bloomberg.net, Ana Monteiro, Hilton Shone

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