Congo must stop over reliance on oil for economic growth – WB report

BRAZZAVILLE - Congo (Brazzaville) should stop its over-dependence on oil for economic growth, learning from the downturn of the last seven years, the World Bank said in its report, Congo’s Road to Prosperity: Building Foundations for Economic Diversification.

According to available data, Congo is sitting on about 1.6 billion barrels making it the 36th oil-rich country in the world.

As such, the country's economy has been centred on oil exports but low global prices over the years stunted economic growth.

"The cost of over-reliance on oil has been painfully apparent in the past decade. A seven-year recession, induced by the end of the last oil-boom cycle, has led to a dramatic drop in income per capita, shrunk the size of the economy, and weakened long-term growth prospects," the World Bank said in its latest country economic memorandum report on Congo.

The advice from the World Bank comes as oil prices have started improving but to avoid a setback and chart a way to an economic revival, past mistakes should not be repeated.

"While oil prices have surged more recently, returning Congo’s economy to growth in 2022, the current development model is unlikely to deliver sustainable economic growth and productive jobs going forward," the World Bank added.

The Congolese economy contracted by 2.2 percent in 2021, leading to an increase in extreme poverty from 50.2 percent in 2020 to 52 percent of the population in 2021, World Bank data shows.

The African Development Bank said despite the Covid-19 setbacks that compounded the five-year recession by 2020, climate change-induced floods also affected the country, and evidently increased output and prices of oil were not enough to offset the effects.

Korotoumou Ouattara, World Bank resident representative for Congo said a new people-centred model could be the answer.

"Congo’s oil-driven growth model has run its course. In order to achieve its aspiration for a more diversified and inclusive model, it is crucial for Congo to strengthen its policy ambition and accelerate efforts to transition to a people-centred, diversified economy," she said. – NEWS24.