IMF, DRC Agree on First ECF Review
Washington, DC: A staff team from the International Monetary Fund (IMF), led by Calixte Ahokpossi, IMF Mission Chief for the DRC, visited Kinshasa from April 30 to May 13, to hold discussions on the first review of the DRC’s economic and financial program supported by the IMF under the Extended Credit Facility (ECF).
At the end of the discussions, Mr. Ahokpossi issued the following statement:
“The DRC authorities and the IMF team have reached a staff-level agreement on the first review of the DRC’s three-year economic and financial program supported by the IMF under the ECF, subject to approval by IMF management and the Executive Board. Consideration by the IMF Executive Board is tentatively scheduled for end-June 2025.
“Since the last quarter of 2024, the DRC has faced an escalation of the armed conflict in its eastern part. The intensification of hostilities has claimed thousands of lives and caused severe humanitarian, social, and economic harm, particularly in the occupied provinces of North Kivu and South Kivu.
“Economic activity remained resilient, with robust GDP growth of 6.5 percent in 2024. Growth is projected to remain above 5 percent in 2025, driven by continued dynamism in the extractive sector. External stability has strengthened, underpinned by ongoing international reserves accumulation and a narrowing current account deficit—though still below the recommended adequacy level for import coverage. The resulting exchange rate stability observed since mid-2024, coupled with appropriately tight monetary policy, has helped ease inflationary pressures. Year-on-year inflation has returned to single-digit levels in April 2025, for the first time since July 2022.
“On the fiscal side, the conflict escalation has placed significant strain on public finances. Spending overruns—driven by sharp increases in exceptional security spending, public investment, and transfers to provinces and public entities—were only partially offset by strong revenue collection. As a result, the domestic fiscal deficit exceeded its programmed ceiling at end-2024. For 2025, the closure of revenue collection offices in the occupied eastern regions, combined with the exemption of basic food products from VAT and customs duties to ease the cost of living, have led to a revenue shortfall. Budgetary strains have also intensified, as exceptional security spending remained elevated through end-April of 2025, and salaries for military and police were doubled since March to bolster troops’ morale.
“The government has reaffirmed its commitment to the objectives of ECF-supported program, which has been recalibrated to reflect the new realities following the intensification of the conflict. This will help safeguard fiscal sustainability while enabling adequate fiscal space for pressing security and humanitarian needs without crowding out priority social and investment spending, especially in light of the suspension of a significant share of external humanitarian assistance. Offsetting revenue-enhancing measures and streamlining of non-priority spending—including a reduction in operating expenses of the government—have been identified and incorporated, along with expected additional concessional financing from the World Bank, into a draft 2025 supplementary budget Law to be submitted to Parliament. Additional concessional financing from development partners would be welcome.
“Progress on the structural reform agenda is encouraging. Reforms focused on modernizing public financial management are advancing: the legal framework was strengthened to induce stricter adherence to the expenditure chain, though its implementation needs to be tightened. The authorities are making progress in meeting key milestones to operationalize the Treasury, gradually decentralizing spending authorization to line ministries, establishing a treasury single account, and transitioning to a resource-based fiscal framework aimed at shielding public spending from the volatility of extractive revenues. In addition, domestic revenue-enhancing efforts should be stepped up, including by expediting the roll-out of the standardized VAT billing system, adopting an action plan to increase domestic revenue mobilization, streamlining inefficient tax exemptions, curbing tax evasion through tighter oversight of mineral exports, and further intensifying the fight against customs fraud at the borders. Stronger spending efficiency, including through better public investment management and stricter control of payroll abuses, remains critical, along with measures in the area of governance and transparency—including in the extractive sector— to combat corruption, and improve the business environment.
“Finally, the IMF staff urged the authorities to continue laying the groundwork for the timely implementation of the reform measures (RM) underpinning the Resilience and Sustainability Facility (RSF)–supported program. These RMs, coming due starting at the next review, are expected to help strengthen the DRC’s resilience to climate shocks while consolidating its role as a “solution country” in the global transition to a low-carbon economy.
“The IMF staff would like to express its gratitude to the authorities, senior officials, technical staff, and various stakeholders—including representatives of the civil society, the private sector, and development partners—for their hospitality, continued support, and constructive discussions.”
https://www.imf.org/en/News/Articles/2025/05/13/pr25140-democratic-republic-of-congo-imf-reaches-sla-with-drc-on-the-1st-review-under-ecf