The Republic of Congo will have to carry out “major structural reforms” which will play a central role in improving governance and the business climate, according to the International Monetary Fund (IMF), which has just approved a program supported by a arrangement under the Extended Credit Facility (ECF). Reforms which also condition the granting of all of the 455 million dollars planned, and of which 20% will be disbursed immediately.
According to the terms of the agreement concluded since November 8, 2021 between Congo and the Fund’s teams, the government will have to strengthen the management of public finances by auditing expenditure linked to the Covid-19 pandemic, and adopt a control and transparency of public spending. The program, which does not obscure the collection of oil and non-oil revenues, also provides for the tabling in parliament of the new anti-corruption law as well as the auditing and publication of information relating to oil production and oil revenues actually collected by the government.
Furthermore, the Fund calls for a revision of the tax regime in the oil sector, a greater abolition of VAT exemptions, a rationalization of other tax expenditures, an improvement in procurement practices and more efficient management of public investments. As well as an increase in the collection of tax arrears, the reduction of tax and customs exemptions, the continuation of the reforms already initiated in terms of tax policy and administration, and the reduction of transfers to public enterprises.
This agreement concluded between the two parties is the 4th since 2004. Two of the first three programs had not been fully implemented because Brazzaville did not achieve the objectives set.