The DRC’s economy has recovered from the shock caused by the COVID-19 pandemic. Real GDP growth is projected to increase from an annual average of 4.0% for 2019 to 2021, to 6.4% in 2022. Inflation is projected to decrease from an annual average of 8.4% for 2019 to 2021, to 6.4% in 2022. The DRC’s inflation is projected to improve due to recovery of commodity prices underpinning a strong CDF exchange rate despite the fact that sanctions against Russia have increased the price of crucial imports. In the medium-term period from 2023 to 2025, real GDP growth is projected to increase to an annual average of 6.8%. Meanwhile, inflation is projected to decrease to an average of 5.7% over the medium-term from 2023 to 2025.
The Government of the DRC’s debt has begun moderating after increasing slightly in 2020. The DRC’s gross public debt is projected to decrease from an annual average of 14.4% of GDP for 2019 to 2021, to 10.6% of GDP in 2022. The decrease in public debt is largely due to the strong recovery in real economic growth despite the Government of the DRC implementing procyclical fiscal expansion as the economy continues recovering from the shock caused by the global lockdown response to the COVID-19 pandemic. The fiscal deficit is projected to widen from an annual average of -1.1% of GDP for 2019 to 2021, to -3.3% in 2022. This shows the procyclical fiscal stance taken by the government as spending and further borrowing outpace revenue growth. In the medium-term period from 2023 to 2025, the fiscal deficit is projected to narrow to an annual average of -2.2% of GDP. Therefore, public debt is projected to decrease to an average of 6.5% of GDP over the medium-term from 2023 to 2025.
The DRC’s external sector was not negatively affected by the COVID-19 pandemic in 2020 which reduced import demand and the sector has continued improving due to the rebound in commodity prices, particularly oil and raw mineral commodity (copper, nonferrous metals, industrial minerals and metallic ores) prices which have a significant impact on export earnings. The DRC’s current account deficit is projected to narrow from an annual average of -USD 1.1 billion (approx. -2.2% of GDP) for 2019 to 2021, to -USD 218.0 million (approx. -0.3% of GDP) in 2022. In the medium-term period from 2023 to 2025, the current account deficit is projected to narrow to an annual average of -USD 65.7 million (approx. -0.1% of GDP). This illustrates a continuous improvement in the current account balance despite the uncertainty of how long current rebound in commodity prices which is primarily driven by the impact of sanctions against Russia will last. Therefore, Congolese authorities will have an opportunity to take advantage of the current reprieve and invest in further diversification of the country’s exports away from the continued reliance on raw mineral commodities.
The DRC is scheduled to hold its national elections in 2023 and the election campaigning cycle is currently underway. The SADC Electoral Advisory Council (SAEC) conducted post-election reviews aimed at assessing the implementation of the recommendations of the SADC Electoral Observation Mission and assessing the level of preparedness for elections in the Democratic Republic of Congo in late 2023. The SEAC mission to the DRC held consultations with the leadership of the National Independent Electoral Commission of the DRC on 15 March 2022 and the delegation held further consultations with stakeholders that include political parties in government and in the opposition. Incumbent President H.E. Félix-Antoine Tshisekedi Tshilombo is vying for a second term in office using his peace and security rhetoric.
The current political climate remains relatively calm despite continued conflicts and violence in the eastern parts of the DRC. The DRC has formally joined the East African Community (EAC) after the signing of the Treaty of the Accession of the DRC into the EAC in Nairobi, Kenya. The DRC now has until 29 September 2022 to ratify the Treaty and deposit the instruments of ratification with the Secretary General. The DRC would join EAC at the Common Market stage in the integration when they formally accede to the Treaty with a mechanism to integrate the DRC into the submissions of EAC to the African Continental Free Trade Area Agreement processes. President H.E. Félix-Antoine Tshisekedi Tshilombo will also seek for deeper regional security cooperation between the DRC and EAC neighbouring states (Burundi, Rwanda and Uganda) in order to resolve the long-standing conflict and insurgencies affecting North and South Kivu. This remains the central aim in the DRC’s regional priorities as a member of SADC, the EAC and the International Conference on the Great Lakes Region.
