IMF: Oil boosts Congo growth

2010-09-20 15:21
Dakar- Congo Brazzaville is on track to be Africa's fastest growing economy this year but should temper its investment spending, in part because key oil revenues are consistently coming in below expectations, the International Monetary Fund said.

The IMF trimmed Congo's 2010 growth forecast to 10.6% from 12.1% and boosted its 2011 growth forecast to 8.7% from 6.6% as increases in oil production have taken longer than anticipated.

"Developments in the international markets have been overall favorable for oil exporters like Republic of Congo," the IMF's resident representative Oscar Melhado told Reuters in an interview.

"However, oil revenues received are systematically lower than projected. This is an issue of concern," he said.

The major sub-Saharan oil exporter is the only African country projected by the IMF to have double-digit growth this year, and its 2011 forecast is second only to Ghana where an onset of commercial oil output is expected to propel its growth toward 20%.

"The new forecast is based on a different profile of oil production with lower production in 2010 and higher production in 2011," Melhado said, adding 2010 average output would hit a record near 340 000 barrels per day.

Melhado said Congo's oil production would peak in 2011 near 370 000 bpd due to new output from fields operated by Total, Murphy, ENI and TEP-Congo, before output falls into decline.

He said Congo should aim to diversify its economy away from oil by developing itself as a regional transport hub, boosting its agriculture sector, and exploring possibilities in eco-tourism.

Prudent spending

Congo's government late last year voted to double its annual budget to $6.38bn, banking on an expected increase in oil output to 350 000 bpd from around 300 000 bpd in 2009.

But Melhado said Congo's revenues from oil in the first half of 2010 were running about a third below forecast at $1.41bn.

He said the IMF had recommended Congo temper its 2010 spending, as well as its 2011 draft budget.

"On the investment programme we agree with scaling it up, but not to the magnitude initially proposed by the authorities of about 50% of the level executed in 2009. A more prudent level is in our view acceptable," he said.

Oil dominates the national economy but makes little difference to the lives of ordinary Congolese, most of whom still live off subsistence agriculture.

The country was rocked by a short but bloody civil war in 1997 that brought President Denis Sassou-Nguesso to power, leaving the capital Brazzaville in ruins.

Much of Congo is barely inhabited tropical jungle, with most of its four million people living in the southwest between Brazzaville and the main port city Pointe-Noir.

"While we fully understand the large development needs the country faces, the oil resources that Congo has will have been for naught if they do not result in higher potential future growth and lower poverty," Melhado said.

"The mission's key recommendation was to strike an appropriate balance between development needs and fiscal sustainability," he said.

Among the country's key challenges is availability of power. A Chinese funded hydroelectric project - Imboulou - came on line this year but has been unable to provide power to Brazzaville because of a lack of transmission lines.

"It would take still some years until all the grids in the cities are fully operational," Melhado said.

Congo's remaining debt was cancelled by creditors earlier this year, and with oil revenues funding the budget and a stabilization account at the central bank, the IMF sees little risk of new debt in the near-term, Melhado said.

Read more on:    congo  |  central africa

Read News24’s Comments Policy


Inside News24


Thirty and still single? There’s hope!

Are you thirty and still single, without even a hint of a prospect on the horizon? Then read this!

SA’s Playboy Playmate of the year in action!
12 lies everyone accepts as fact
Hottie of the day: Charlotte
Breakup text goes viral and it’s hilarious!

Jobs in Cape Town [change area]

Property [change area]

Travel - Look, Book, Go!

Magical Massinga

Spend 5 nights at the gorgeous Massinga Beach Lodge in Mozambique and only pay for 4 from R13 220 per person sharing. Includes return flights, accommodation, transfers and romantic turndown. Book now! - shop online today

Festive gifts!

Check out our awesome range of festive gifts to make everyone’s wishes come true. Shop now!

Seen something you like in our catalogue?

Find the perfect gift and save up to R5000 – As seen on the catalogue. Hurry and shop now!

Save up to R2200 on electronics! – As seen in the catalogue

Wishing for tech gadgets this festive? Save up to R2100 on hot tech products at While stocks last. Shop now!

Up to 35% off books

Save up to 35% on the latest page-turners. While stocks last. Shop now!

Good Morning, Mr Mandela by Zelda la Grange

Good Morning, Mr Mandela tells the extraordinary story of how a young woman had her life, beliefs, prejudices and everything she once believed in utterly transformed by the greatest man of her time. Now R221. Pre-order now!

OLX Free Classifieds [change area]

Samsung Galaxy s4

Mobile, Cell Phones in South Africa, Western Cape, Cape Town. Date October 24

Best bargain in big bay

Real Estate, Houses - Apartments for Sale in South Africa, Western Cape, Cape Town. Date October 25

VW Golf 6, 1.6 Trendline (Excellent condition)

Vehicles, Cars in South Africa, Western Cape, Cape Town. Date October 25


It may be hard to stay cool, calm and collected. Your emotions can get quite heated in the moment. You may benefit from finding more

There are new stories on the homepage. Click here to see them.


Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire network.


Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.