Improving the business climate and promoting private sector investment; streamlining tax expenditures and maximizing non-mining mining revenues; greater transparency in the management of natural resources; raising the level of foreign exchange reserves; and the strengthening of controls based on the risks and the quality of financial data. These are the five recommendations of the International Monetary Fund (IMF) made to the Congolese authorities at the end of the Article IV consultations.
« The mission thanks the Congolese authorities for their hospitality, openness and cooperation. The Fund stands ready to support the authorities in their reform efforts and to continue cooperation in the future », said IMF Chief of Mission Mauricio Villafuerte in the DRC.
Clean up the business climate
IMF experts encourage the Congolese executive to improve the business environment and encourage private sector investment. Achieving this goal includes reducing regulation, simplifying and consolidating taxes and non-fiscal payments, improving governance, and intensifying the fight against corruption and the search for resources.
« The staff team urged the authorities to speed up the adoption of the anti-corruption bill and the law establishing an independent anti-corruption commission, as essential measures to anchor credibility. of the government in its quest for an inclusive and sustained growth of the DRC », says the official communiqué sanctioning the end of the mission.
Have sound and solid public finances
While the authorities’ plans for rehabilitation and infrastructure construction are consistent with the goal of creating the foundation for sustainable growth, the IMF says, they require greater mobilization of public resources.
Hence, the IMF’s exhortation to the Congolese authorities to work to rationalize tax expenditures and to diversify the sources of revenue beyond income from mining. This would give the government, says the IMF, greater fiscal space and increased borrowing capacity to support public investment and social priorities.
Establish a more transparent management
More transparent management of natural resources is a determining factor in the accountability process required by good governance practices.
« Given that mining revenues can lead to volatile expenses, the IMF staff suggested changing the formulation of fiscal policy to be based on a non-mining budget balance and continue to prudence in public borrowing to preserve the sustainability of the debt », reads the statement.
Increase foreign exchange reserves
The current level of DRC’s international reserves still remains well below that required by the international standard which is located at least three months of import, ie 12 weeks. In order to comply with this requirement, President Félix Antoine Tshisekedi and his future government should roll up their sleeves to meet the challenge of exceeding US $ 4.5 billion in international reserves.
What is more normal for the IMF to return to this need: « given the high levels of dollarization of the financial system and the country’s vulnerability to external shocks, the mission encouraged the authorities to continue efforts to significantly increase international reserves through compared to their current low level of around 3 weeks of import cover. »
Strengthen the financial system
Discussions between the two parties during these consultations also focused on the need to continue strengthening controls based on the risks and quality of financial data.
But also to « finalize the framework of the fight against money laundering and the financing of terrorism (LBC-FT). The aim is to further improve financial stability. «
As a reminder, the Article IV consultations that took place from 22 May to 5 June 2019 focused on policies that will eventually lead to diversification of the economy and tackle high levels of poverty. and unemployment in a population that continues to grow at a worrying rate.
DRC: USD 100 million for the construction of the major cultural centre for Central Africa
Prime Minister Ilunkamba has just authorized, on Monday, October 14, 2019, the Minister of Urban Planning and Housing Then Mwabilu and the Minister of State for International Cooperation Guillaume Manjolo to sign two orders.
This, after his visit to the site where the great Cultural and Artistic Centre of Central Africa will be built as well as the INA Buildings, the National Institute of Arts, where he ordered the resumption of work.
The first decree concerns the postponement of the decree of 14 October 2016 and the second concerns the decommissioning of a portion of land in favour of Sino-Congolese cooperation.
The Chinese company BEIJING URBAN CONSTRUCTION GROUP is in charge of building this large Centre for 30 months. The cost of the work is estimated at US$100 million.
After this visit to the field, the head of the Ilunga Ilunkamba Government himself presided over the signing ceremony of these two ministerial decrees for the implementation of the Chinese government’s donation to the DRC.
There was talk of ending the superposition of orders first by repealing the one that granted the same concession to Richesse Taylor.
It should be noted that the cultural and artistic centre, one of the largest in Central Africa, will constitute, according to the Minister of State for Cooperation Guillaume Mandjolo, an innovative source for the public treasury and restore the DRC’s position as a leader in the world of African culture.
This large Centre will be located between the triumphal boulevard and Assossa avenues, a few metres from the People’s Palace.
The construction of this important cultural building includes the large 2,000-seat theatre, the small 800-seat theatre, meeting rooms, the gymnasium and a car park.
DRC: in 2020, Goma will host the « NiNyumbani » development fair
The capital of North Kivu province will host in 2020, a development fair entitled: « NINYUMBANI », which means « at home » in Swahili. It is the initiative of a young native of Greater Kivu, Marc Lanoy Kasongo, entrepreneur and founder of OPLUS, a communication, marketing and advertising company.
« NiNyumbani » is an event that brings together different decision-makers from the DRC and the Great Lakes Region around reflections aimed at a clear and achievable future.
It is a platform whose mission is to create a common front against the many challenges related to unemployment, education, access to electricity and water, as well as agricultural and road infrastructure.
This exhibition, which is part of a community development process, is organized once a year around a central theme on which different themes focus on economic opportunities and emerging concerns in the region in order to propose practical solutions that can be applied at cost, in the medium and long term.
This activity is expected to welcome 500 exhibitors from different fields of activity; among others, economic operators, entrepreneurs, state institutions, banks, start-up managers, incubators, civil society and universities, opinion leaders, etc.
In addition to exhibitions, the programme also includes conferences.
« This fair is also being set up to give a new image to our Dear City of Goma and the long-suffering province of North Kivu, whose image is being tarnished both inside and outside the country. We want to demonstrate here the potential of our province, and what we can bring to the development of our country, » explained Marc L. Kasongo, who is in Kinshasa for contacts around the organization of this major Rendez-vous.
To him he added, « we also want to give everyone, whatever their social rank, the opportunity to come and present their products and services, because we aim for development at the grassroots level. NINYUMBANI is our common home, » added the initiator of the activity.
For Marc Lanoy Kasongo, several results are expected from this exhibition.
The aim is to propose solutions to the fundamental development challenges in Greater Kivu and the DRC; to propose new business, industry and investment opportunities and strategies in Greater Kivu and the DRC; to create partnerships between stakeholders; to connect decision-makers in the sub-region; and to create a practical solution through work.
This exhibition, whose date remains to be determined, can only be possible thanks to the contribution of the Congolese, from which Marc Kasongo solicits the involvement of the authorities and mainly the Head of State, who has made the promotion of youth his main concern.
Global: Global value chains have stimulated growth but the momentum is running out of steam!
The World Bank Group published a new report on October 8, 2019 in Washington, D.C., USA. This World Development Report 2020 focuses on trade for development in an era of globalized value chains. It details strategies that will enable developing countries to improve their performance for the benefit of their populations by undertaking reforms that will stimulate their participation in global value chains.
The paper highlights that global value chains or GVCs can continue to stimulate growth, create better jobs and reduce poverty, provided that developing countries undertake deeper reforms and that industrialized countries implement open and predictable policies.
It clearly shows that in an era of globalization, companies can no longer do everything, they specialize and no longer have to produce the entirety of a good on their own.
This book assesses the contribution of VCMs to growth, employment and poverty reduction, but also to inequality and environmental degradation. It also explains how national policies can boost trade growth and ensure that VCMs participate in, rather than oppose, sustainable development. It identifies the shortcomings of the international trading system that have led to dissension between countries, and proposes a roadmap for addressing them through enhanced international cooperation.
This report reveals that it is no longer so obvious today that trade remains an engine of prosperity, this World Bank report points out. Since the 2008 global financial crisis, trade growth has been sluggish and VCM expansion has slowed. The last decade has not seen transformative events comparable to those of the 1990s. Here we are referring to the integration of China and Eastern Europe into the global economy. Two factors are at the root of this slowdown. First, the introduction of labour-saving technologies such as automation and 3D printing could bring production closer to the consumer and reduce the demand for labour both within and outside countries. Secondly, trade conflicts between large countries could lead to a contraction or segmentation of VCMs.
According to this report, global value chains have a positive impact on development.
First, they increase productivity and growth: a 1% increase in participation in global value chains is estimated to increase per capita income by more than 1%, almost twice as much as the gains induced by traditional trade. In Ethiopia, companies engaged in these globalized sectors are twice as productive as their counterparts operating in traditional trade.
Second, they reduce poverty: since the impact of the rise of global value chains on economic growth is greater than that of trade in finished products, their impact on poverty reduction is also greater. Countries such as Mexico and Viet Nam, which are more actively involved in global value chains, have achieved better results in the fight against poverty.
Third, they improve the quality of jobs: firms operating in global value chains attract labour to more productive activities in manufacturing and services, and generally employ more women, thus contributing to the structural transformation of developing countries.
In addition to these positive effects, however, it is noted that VCMs can also have negative effects on the environment. The main environmental costs for VCMs are related to the growth in trade in intermediate goods, and the increase in distances travelled, compared to traditional trade. Their effects include increased carbon dioxide (CO2) emissions associated with transportation (compared to traditional trade) and excess waste.
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