Congo Posts Budget Deficit as Lower Metal Prices Cut Revenueby
Foreign-exchange reserves decline as metal, oil prices drop
Government cut growth forecast for 2015 to 7.7% from 8.4%
The Democratic Republic of Congo posted a budget deficit last year as declining prices for copper and other key exports curbed revenue.
The shortfall was estimated at 190.1 billion Congolese francs ($205 million), after spending totaled 4.22 trillion francs and revenue came in at 4.03 trillion francs, Prime Minister Matata Ponyo Mapon’s office said in a statement on its website Monday. Ponyo, who had presented a balanced budget of 8.5 trillion francs at the start of 2015, warned in October that the government needed to cut expenditure to ensure a balanced budget.
The government of Congo, Africa’s biggest copper producer and the world’s larger miner of cobalt, is rebuilding an economy shattered by two civil wars that ended in 2003. It’s preparing for elections that should culminate in a presidential vote in November. The country’s 2016 budget includes 537.8 billion francs for the votes, but the government in January said it expected a 14 percent fall in budgeted revenue this year, casting doubt on its ability to fund the process. The opposition says the government wants to delay the elections in order for President Joseph Kabila to remain in power.
Copper prices dropped 26 percent in 2015 to the lowest level in six years. The country also produces about 9 million barrels of oil annually. Crude slumped more than 60 percent since June 2014 to below $40 a barrel, reaching the lowest levels since 2008.
Congo’s foreign-exchange reserves have fallen to $1.38 billion on Jan. 26 from $1.48 billion in December and $1.65 billion at the end of 2014.
The government in November lowered its growth forecast for 2015 to 7.7 percent from a previous estimate of 8.4 percent as commodity prices tumbled, though it has remained bullish about economic growth this year. The 2016 budget predicts a growth rate of 9 percent, above the World Bank’s 7.3 percent forecast.