Country Report Congo (Brazzaville) July 2008

Outlook for 2008-09

The president, Denis Sassou-Nguesso, and his ruling coalition will continue to dominate the political scene in 2008-09. Mr Sassou-Nguesso is expected to win the presidential election, which is scheduled to take place in March 2009. Al-though 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 grow by 10.2% in 2008 owing to a significant expansion in oil production, before moderating to a still buoyant 8.5% in 2009 as activity in the oil and non-oil sectors continues to expand rapidly.

The political scene

The local elections for municipal town councils have taken place, although the results are not yet available. Voter turnout has been very low, reflecting a high degree of apathy. Political parties are beginning to gear up for next year's pres-idential election, and three candidates have already announced their intention to stand in the poll, creating dissension in both pro-presidential and opposition camps. The leader of the former Ninja and Cocoye rebel groups, Pasteur Ntoumi, has announced that the military arm of his political party has been effectively dismantled, indicating that the peace process is moving ahead.

Economic policy

The government and the IMF have signed a new staff-monitored programme, although it is still unclear whether targets will be respected. The government has agreed to reduce the non-oil primary deficit from 56% of non-oil GDP in 2007 to 41% of non-oil GDP in 2008 and to implement several structural reforms. It has also adopted several measures designed to offset rising inflation.

The domestic economy

Production from the Moho-Bilondo oilfield, which is expected to reach a peak rate of 90,000 barrels/day, has come on stream. An Italian oil company, ENI, has announced plans to invest US$3bn in Congo (Brazzaville) in 2008-11 in several new energy projects. The government has plans to more than treble its domestic electricity production in the coming years.

Foreign trade and payments

The current-account balance deteriorated significantly in 2007, posting a deficit equivalent to 19.5% of GDP, owing to a moderate fall in exports and a large increase of imports of goods and services.