IMF praises reform but predicts slow recovery

The government of the Democratic Republic of the Congo (DRC) has implemented "far-reaching structural reforms", according to an IMF study issued this month, but it also predicts that the country will take 45 years to reach the level of development it had in 1990.

Since 2001, "the government has been restructuring with a view to creating an environment conducive to private-sector development and economic recovery," says an IMF working paper entitled "Sources of Growth in the Democratic Republic of the Congo: A Cointegration Approach".

The report found improvements in the social sectors, the judiciary and regulatory bodies, and the financial sector. Inflation sharply decelerated from an annual rate of 511 percent in 2000 to 15 percent in 2002. The government has rehabilitated key infrastructure, namely transport, telecommunications, water and electricity.

DRC's growth rate will average five percent between 2002 and 2005, the report predicts.

But it also says the country has "a long way to go" to recoup ground lost from the political turmoil of the past decade as well as from four decades of "total mismanagement" and "pervasive corruption".

Real GDP per capita growth fell from US $240 in 1990 to $85 in 2000. By 2001 real GDP was only 25 percent of what it was in 1960.

Production of the country's vast mineral wealth declined from one-quarter of real GDP in the mid-1980s to about six percent in 2002. Agricultural exports declined from about 40 percent of total exports in 1960 to less than 10 percent in 2000, with some traditional export crops hardly being grown any more.

"Assuming that the population continues to grow at an annual rate of 3 percent, reaching the 1960 real GDP per capita level would take 70 years, while the 1990 level would be attained in 45 years," says the report.
[On the Net: The IMF report: www.imf.org]