OREANDA-NEWS. End-of-Mission press releases include statements of IMF staff teams that convey preliminary findings after a visit to a country. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board. Based on the preliminary findings of this mission, staff will prepare a report that, subject to management approval, will be presented to the IMF's Executive Board for discussion and decision.

The team made significant progress in assessing the authorities’ policies for 2017 and the medium term, and their implications for fiscal sustainability and external stability.

The authorities aim to strengthen the Republic of Congo’s buffers, in line with the regional objective to safeguard external stability.

Discussions will continue in the coming weeks on a package of measures that could be supported by the IMF.

An IMF staff team headed by Abdoul Aziz Wane visited Brazzaville from February 20 to March 8, 2017 to initiate discussions toward a possible financial arrangement that could be supported by the IMF, and finalize the discussions on the 2017 Article IV consultation.

At the end of the mission, Mr. Wane issued the following statement:

"The decline in international oil prices is inflicting significant hardship to the economy of the Republic of Congo, which contracted sharply in 2016. The adverse oil price shock hit amid efforts to improve the country’s infrastructure and increase public sector wages. As a result, public debt increased to 77 percent of GDP, and government buffers were eroded. In particular, the Republic of Congo’s imputed international reserves fell to 2 months of imports. Nonperforming loans increased as the accumulation of government arrears impaired the balance sheets of private enterprises. External arrears accumulated in 2016 and 2017.

"Against this backdrop, the authorities aim to strengthen the Republic of Congo’s buffers, in line with the regional objective to safeguard external stability. This entails significant fiscal adjustment to shore up investors’ confidence, contain public debt to sustainable levels, and spur growth. The IMF team welcomes the authorities’ plans to adjust their spending envelope by prioritizing investment projects, while protecting spending for social sectors and the safety net. The authorities intend to boost revenue mobilization efforts to minimize spending cuts. They took note of the concentration of debt service payments in the next three years that will complicate significantly their adjustment efforts.

"The team made significant progress in assessing the authorities’ policies for 2017 and the medium term, and their implications for fiscal sustainability and external stability. Discussions will continue in the coming weeks on a package of measures that could be supported by the IMF.

The IMF team was received by His Excellency Prime Minister Cl?ment Mouamba. The team met the State Minister of Economy, Industrial Development, and Promotion of the Private Sector, Mr. Ondongo; the Minister of Planning, Statistics and Integration, Ms. Ebouka-Babackas, acting Minister of Finance; the Minister of Large Projects, Bouya; the Minister of Health and Population, Ms. Mikolo; the Minister of Social Affairs, Humanitarian Action and Solidarity, Dinga-Dzondo; and senior officials of the National Directorate of the Central Bank, in addition to representatives of the private sector, and development partners.

"The mission would like to thank the authorities for their hospitality and collaboration."