With a public debt rate estimated at 96% of the Gross Domestic Product (GDP), Congo is still classified as over-indebted by the World Bank (WB). Getting out of over-indebtedness would require a strengthening of debt servicing, administrative procedures and audits.
Fiscal and debt sustainability are key priorities for the Congolese government in the short term, as the country faces significant challenges in mobilizing domestic resources. This situation risks undermining long-term debt sustainability and the implementation of development goals, such as the 2022-2026 National Development Plan, according to the WB.
In its recent report on monitoring the economic and financial situation of the Republic of Congo, released on August 13, the World Bank deplored the country’s high level of public debt. At the end of 2023, public debt expressed as a share of GDP increased to 96%, compared to 86.6% in 2022, in line with the increase in domestic debt from 45 to 58.9%. On the other hand, external debt gradually decreased from 41.6% of GDP at the end of 2022 to 37.2% at the end of 2023.
Congo’s public debt is considered sustainable in the medium term, according to Vincent Tsoungui Belinga, one of the authors of the report. The strategy of paying the remaining domestic arrears in September 2023, or 4.4% and 2.2% of GDP respectively for 2022 and 2023, has allowed the government to settle part of the state debt. The mobilization of domestic revenue could be strengthened, argues this expert, by improving tax administration.
The state should improve taxpayer information and cooperation between government agencies and at the international level by adhering to the Convention on Mutual Administrative Assistance in Tax Matters of the Organization for Economic Cooperation and Development. The WB emphasizes monitoring the mandatory use of the unique identification number, the risk-based approach to conducting tax and customs audits, the decree clarifying the applicability of VAT for upstream oil operations, and the decree regulating the monitoring, control and auditing of upstream oil and gas operations.
The WB experts also recommended greater transparency on debt management, continuing to avoid contractual obligations under new public and publicly guaranteed non-concessional external debts, implementing the September 2023 domestic arrears repayment strategy, and transforming the Debt Management and Analysis System into a single database to record all data on public debt.
