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Economy of the Republic of Congo

 

Early policies

 

State-owned companies and government sponsored industrial programs largely dominated the Congolese economy during the 1970's and 1980's. In 1994, the Congolese government began taking a number of measures to liberalize its economy, including introducing a framework for privatization and reforming its tax system and its investment, labor, and hydrocarbon codes. The shift to liberalization ushered in a new era of economic reform that was receptive to private national and foreign investments. However, reform efforts came to a halt in 1997 with the outbreak of a civil war, and renewed armed conflict in 1998 hindered economic recovery. With the end of the civil war in 1999, President Denis SASSOU N'GUESSO has moved forward on economic reforms, privatization, and improved governance. From 2002 to 2003, Congo privatized key state enterprises, primarily banks, telecommunication companies, and transportation monopolies.

Current strategy

Today, the economy of the Republic of Congo is primarily focused on oil and natural gas. As a result, oil accounts for around 95% of export earnings and 50% of GDP. Large oil resources and a small population have resulted in a GDP higher than most other Sub-Saharan African countries. However, the Congolese government has demonstrated a desire to diversify the economy and reduce its reliance on oil revenue for a sustainable socio-economic development. To this end, the Government has introduced a number of initiatives to help bolster the economy and improve governance. One such initiative is the Project for Agricultural Development and the Rehabilitation of Rural Roads (PDARP), an ambitious project designed to increase investment in the agricultural sector and develop better infrastructures. About 60% of the Congolese population work in Agriculture, yet the country continues to import a large quantity of its food supply. Through the PDARP, the Congolese government strives to limit the country’s dependence on food imports and make agriculture a successful alternative resource to oil.

Diversification

Another area of growth that the Government of the Republic of Congo has focused on expanding is the mineral sector. The Republic of Congo has conceded a new potash mine to a foreign company which will produce around 1.2 million tons of potash per year, making the Republic of Congo the largest producer of potash in Africa. The Government also has plans for new concessions to mine lead, zinc, and copper.

Great works program(Les Grands Travaux)

In addition to supporting agriculture and mining, the Congolese Government has started a major project to improve infrastructures in the Republic of Congo to encourage economic growth and international trade. In 2002, the Republic of Congo initiated a new policy to reconstruct and rehabilitate basic infrastructures, known as the Great Works Program (Les Grands Travaux). The Government created a Department of Great Works in 2002 to oversee the process of procuring services and managing public contracts for the development of roads, airports, hospitals, urban housing, and other structures to help stimulate growth and improve the lives of Congolese citizens.

One key policy of the Great Works project is to improve transportation systems in the Republic of Congo with an aim to increase in-country and international trade and investment. The Republic of Congo has developed important national ports that have allowed it to facilitate trade in the region and service its neighboring countries. The Pointe-Noire seaport is the only deep sea port in Central Africa. Recognizing the huge potential for development and trade through the sea ports, the Congolese government initiated the Congo Terminal project to make the Sea Port of Pointe-Noire the largest deep-water sea port in the Gulf of Guinea. The expansion of the Pointe-Noire Sea Port will generate a number and provide world class infrastructures to boost business growth in the country and the region.

In line with the Congolese Government’s aim to facilitate the transportation of goods and services within Congo and between countries in the Central African region, the Great Works Program has initiated a number of projects to build the country’s communication systems and improve its roads. The Government has built a road between Pointe-Noire, and the capital, Brazzaville. In addition, the Government has also built roads to connect the country to Gabon and also to integrate regions that were previously not accessible by modern roads. One of the most symbolic projects initiated by the Government was the establishment of a road between the Pool Department, a region devastated during the civil war, and Brazzaville. The project has helped demonstrate the Government’s commitment to reconciling and integrating the country but most importantly ensuring that Government services reach all Congolese citizens equally.

Infrastructure development

To support foreign investment and national security, the Republic of Congo began development projects to renovate and modernize its three international airports in Brazzaville, Ollombo, and Pointe-Noire. The Maya Maya International Airport has the capacity to welcome more than 10 million passengers a year and has been equipped with security screeners, a second runway, and a modern terminal. Other national airports have also been renovated to meet world class standards, including the Ngot Nzoungou airport in Niari and the Owando airport in Cuvette.

In addition to improving transportation infrastructures, President Denis SASSOU NGUESSO’s administration is working on improving health and housing infrastructures in a quest to modernize Congo’s cities. In 2010, the Department of Great Works initiated an urban development project to construct social housing and other buildings to help bolster urban development. The project will begin at first in the cities of Brazzaville, Pointe-Noire, Dolisie, and Nkayi Ouesso, and then expand to other regions. The project will include the construction of schools, shopping centers, sport fields, public gardens, parking lots, and other structures. As part of the project, the Government of the Republic of Congo has begun renovating hospitals around the country. The project features renovating hospitals in Brazzaville, Oyo, Niari, and Mpisa. The urban development project also aims to address issues of housing deeds and ownership by creating identification tags for all buildings and hosting them in a database. This will allow local authorities to identify the proper owners of buildings and houses. The project will also help establish a new basis for property tax and urban planning.

To promote its new infrastructures and development policies, the Government of the Republic of Congo is working to create an attractive investor climate, exhibited through compliance with worldwide policies of governance, such as the Extractive Industries Transparency Initiative ( EITI) . As a member of the Central African Customs and Economic Union (CEMAC) and the Organization for Business Law in Africa (OHADA), the Republic of Congo provides more liberal terms for foreign investors. Due in part to these new economic reforms, the Congolese economy has grown significantly in the last few years. Real GDP grew by 5.6 % in 2008 and rose to 7.5 % in 2009. It accelerated to 8.8 % in 2010, based on the growth in the oil and other various economic sectors.

Good governance

In addition to economic reforms, the Government of the Republic of Congo has placed good governance as a top priority for sustainable development. As part of this process, the Government has initiated and continues to work on a Transparency and Good Governance Project funded by the World Bank. President Denis SASSOU NGUESSO’s administration is focusing on improving the management of natural resources, building the transparency of the budget process, building the capacity of government and civil society institutions, improving basic services, and improving the sectors of health and education. Following a conference on February 20th, 2012, the Congolese Government established a national charter for transparency and anti-corruption.

Vision for the future

Ultimately, the Republic of Congo is gifted with natural resources that help finance its socio-economic development. These natural resources allow the Republic of Congo to ensure that every citizen has the access to basic education, health care, adequate food, safe drinking water and reliable health infrastructures. While natural resources offer the Republic of Congo an opportunity to fund its socio-economic development, Congo’s economy continues to be marked by low diversification of production bases, a strong dependence on oil, and some basic infrastructures destroyed by past armed conflict. Furthermore, the Government of the Republic of Congo, under the patronage of President Denis SASSOU N’GUESSO, has embarked on a mission to rebuild the country, improve the living conditions of its citizens, and convert the nation’s economic life cycle into a state of steady growth, and based on a diversified and modern production base portfolio. The Republic of Congo, under the plan, "Vision 2025 Congo", plans to become an emerging country by 2025. In the context of this plan, it is interesting to note the establishment of a dynamic and attractive partnership framework that will attract both national and international investors in order to promote sustainable development in the third millennium.

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