Congo Repub­lic to cut spend­ing

The New Age (Gauteng) - - BUSINESS -

CONGO Repub­lic’s gov­ern­ment plans to cut spend­ing next year by 8.6% to 1.38 tril­lion CFA francs (R3bn), fol­low­ing a 45% cut to the 2017 bud­get this month, as it seeks an IMF bailout.

The econ­omy has been badly hit by low oil prices and poor fis­cal man­age­ment, caus­ing to­tal gov­ern­ment rev­enue to slide by nearly a third since 2015 and pub­lic or pub­licly-guar­an­teed debt to surge to at least 110% of GDP.

In a state­ment an­nounc­ing the bud­get pro­posal, gov­ern­ment spokesper­son Thierry Moun­galla said the econ­omy would con­tract by about 4.6% this year but should re­cover to grow by 0.7% next year as crude pro­duc­tion picks up at To­tal’s Moho Nord off­shore field.

Moun­galla said the gov­ern­ment planned to run a 219 bil­lion­CFA franc sur­plus in or­der to re­duce pub­lic debt and ad­here to prin­ci­ples agreed with the IMF dur­ing a two-week mis­sion ear­lier this month.

That visit ended with­out a deal as the IMF said the gov­ern­ment needed to do more to re­store debt sus­tain­abil­ity and strengthen gov­er­nance.

Congo is reg­u­larly sin­gled out by anti-cor­rup­tion groups for the opaque man­age­ment of its oil sec­tor.

Hold­ers of Congo’s Eurobond are closely fol­low­ing the gov­ern­ment’s ef­forts to get back on top of its ex­ist­ing debt, which have been com­pli­cated by a $1bn le­gal dis­pute in a US court. – Reuters

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