Country Report Congo (Brazzaville) October 2008

Outlook for 2009-10

The president, Denis Sassou-Nguesso, and his ruling coalition will continue to dominate the political scene in 2009-10, as he is expected to be re-elected by a landslide in the presidential poll, which is scheduled to take place in March 2009. Although the stability of the peace process is a source of concern, the Economist Intelligence Unit does not expect a new civil conflict to erupt in the Pool region. The government's main priority will be to ensure the rapid improvement of the country's crippled infrastructure ahead of the presidential poll. There is a high risk that any new programme or target agreed with the IMF during the forecast period will be subject to fiscal slippages associated with the electoral cycle. Real GDP is forecast to continue to grow strongly, by 8.5% in 2009 and 7% in 2010, owing to a significant expansion in oil production and as activity in the oil and non-oil sectors continues to benefit from increased political stability, high liquidity and expansionary fiscal policies.

The political scene

The president's position has been strengthened after pro-presidential parties and independents took over 80% of the seats in the municipal elections held on June 29th. The polls have successfully tested the capacity of the new political coalition, Rassemblement pour la majorite presidentielle (RMP), to support the president's re-election bid. Voter turnout was extremely low, at an estimated 10-15%, in what is an indication of limited public trust and political participation in the country's democratic process.

Economic policy

The government has highlighted the substantial progress that it has made in meeting the targets set under the IMF's staff-monitored programme, including meeting all quantitative measures and five of the eight structural benchmarks. However, delays have been reported in enhancing the commercialisation of oil, reducing fuel subsidies and the certification of oil revenue. The regional central bank has tightened monetary policy in order to reduce excess liquidity and offset inflationary pressures.

The domestic economy

Congo has been ranked 178th out of 181 countries in a study comparing ease of doing business, underscoring the adverse operating environment for private-sector development in the country. An Australian mining company, DMC Mining, has begun the pre-feasibility study of the Mayoko iron ore project.

Foreign trade and payments

According to the regional central bank, the current account is expected to post a surplus of CFAfr162bn (US$375m) in 2008.