The World Bank
DRC Foundational Economic Governance Reforms DPO series for Green, Resilient and Inclusive Development
(P177460)
Program Information Document
(PID)
Concept Stage | Date Prepared/Updated: 15-Mar-2022| Report No: PIDC33735
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The World Bank
DRC Foundational Economic Governance Reforms DPO series for Green, Resilient and Inclusive Development
(P177460)
BASIC INFORMATION
A. Basic Project Data OPS TABLE
Country Project ID Project Name Parent Project ID (if any)
Congo, Democratic Republic P177460 DRC Foundational Economic
of Governance Reforms DPO
series for Green, Resilient
and Inclusive Development
(P177460)
Region Estimated Board Date Practice Area (Lead) Financing Instrument
AFRICA EAST Jun 15, 2022 Macroeconomics, Trade Development Policy
and Investment Financing
Borrower(s) Implementing Agency
Ministry of Finance Ministry of Finance
Proposed Development Objective(s)
Supporting the Government's program of reforms to address the country key economic governance challenges by
strengthening the governance of public finances and ensuring sustainable management of natural resources while
addressing climate change.
Financing (in US$, Millions)
FIN_SUMM_PUB_TBL
SUMMARY
Total Financing 250.00
DETAILS -NewFin3
Total World Bank Group Financing 250.00
World Bank Lending 250.00
Decision
The review did authorize the preparation to continue
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The World Bank
DRC Foundational Economic Governance Reforms DPO series for Green, Resilient and Inclusive Development
(P177460)
B. Introduction and Context
Country Context
DRC, the largest country in Sub-Saharan Africa, with a population estimated at 89.5 million1 people, is a deeply fragile
country. DRC has a long history of conflict, political upheaval and instability, and authoritarian rule, which have led to a
grave, ongoing humanitarian crisis. The most common thread through time is the quest of certain vested parties to exploit
and benefit from DRC’s immense natural resources. DRC borders nine countries, and external interference has regularly
contributed to conflict and instability. DRC has been unable to convert its ample natural and human resources into
sustainable economic growth and shared prosperity. Due to abundant and diverse natural resources, a strategic location
at the center of Africa, and a large and young population, DRC has considerable economic potential. However, the legacy
of colonization, the lack of good governance, weak fiscal institutions, mismanagement of natural resources, and
protracted conflict and violence have all contributed to limited progress in building human capital and infrastructure and
resulted in economic underperformance and high levels of poverty.
The DRC complex political context has hampered implementation of reform initiatives over the last 10 years, but there
is now an opening for a different trajectory. The peaceful transition to power after the December 2018 election was
followed by a period of strained cohabitation when the former president’s party held the majority in Parliament. A new
coalition was formed in late 2020 and a new Government was established in April 2021, opening the way to move forward
on critical reform agendas.
DRC’s economy recovered from the COVID-19 pandemic owing to a favorable performance in the mining sector and a
recovery in the non-mining sectors. After a slowdown to 1.7 percent in 2020, economic activity is expected to have
rebounded in 2021, with GDP growth estimated at 5.7 percent. The mining sector was a key driver of growth – copper
and cobalt production rose by 9.1 and 6.8 percent, respectively, as domestic production capacity increased with the
launch in mid-2021 of the Kamoa-Kakula mining project. The easing of COVID-19 restrictions, and higher revenues from
the mining sector, which also benefited from rising prices, supported growth of non-mining sectors by 4.7 percent in
2021 compared to a 1.3 percent contraction in 2020. Both internal and external positions improved supported by a
positive trade balance together with the IMF Special Drawing Rights (SDR) allocation. Fiscal consolidation was achieved
with a better performance in domestic revenue collection despite higher public expenditure.
Relationship to CPF
This DPO series is closely aligned with the Country Partnership Framework (CPF) FY22-26 adopted in February 2022, as
it contributes to each of the three focus areas: (i) Strengthen stabilization efforts for reduced risk of conflict and violence;
(ii) Strengthen system for improved service delivery and human capital development; and (iii) Strengthen economic
governance for increased private sector investment. The 2021 RRA has identified governance failures as a major driver
of fragility in DRC. Efforts at strengthening governance are cutting across the three CPF pillars and are at the core of the
new DRC CPF. In addition, reforms supported under the DPO series aim to improve service delivery, with a focus on
infrastructure (power, water, roads, telecom) and social sectors (education and health). Reforms also focus on ensuring
sustainable management of natural resources and addressing climate change, with a focus on the extractive sector and
forests. The new CPF considered resuming the use of DPF in DRC, if there is an adequate macroeconomic and policy
framework and government track record and commitment to a substantive policy reform program.
1 World Bank (October 2021): MPO (estimate, the latest census took place in 1984).
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The World Bank
DRC Foundational Economic Governance Reforms DPO series for Green, Resilient and Inclusive Development
(P177460)
C. Proposed Development Objective(s)
The proposed development objective of this DPO series is to support the Government's program of reforms to address
the country key economic governance challenges by strengthening the governance of public finances and ensuring
sustainable management of natural resources while addressing climate change.
Key Results
Key results expected from this DPO series include: deployment of the national network of government account;
digitalization of DGRAD (the non-tax revenues authority) operations; public disclosure of audited financial statements
and annual reports for strategic SOEs; competitive recruitment of leadership of SNEL (power utility), REGIDESO (water
utility) and FONER (national road fund); liberalization of the telecom sector; effective benefit-sharing in the extractive
sector; new Nationally Determined Contribution (NDC) submitted with increased commitments to address climate
change; compliance of forest concessions with Forest Law.
D. Concept Description
The operation will support the Government of DRC’s effort to achieve more sustainable and growth, which is fully
aligned with the 2019-2023 PNSD and with the World Bank green, resilient and inclusive approach to development
(Green, Resilient and Inclusive Development, GRID). In addition, the operation supports the implementation of several
sectoral strategies recently approved by the DRC authorities: the 2021-2023 EITI roadmap approved in March 2021; the
2022-2028 Public Finance Reform Strategic Plan, approved in November 2021; the DRC Letter of Intent to the Central
African Forest Initiative (CAFI) for 2021-2030, also approved in November 2021.
The DPO series will be anchored on three pillars. Pillar 1: Strengthening core PFM functions. Policy areas include: (i)
Deploying the national network of government accountants throughout the territory to strengthen expenditure
management; and (ii) Strengthening domestic revenue mobilization. Pillar 2: Strengthening SOE governance and
removing State monopolies. Policy areas include: (i) Increasing SOE transparency; (ii) Strengthening the corporate
governance of SOEs; (iii) Completing the liberalization of the telecom sector through the removal of the State monopoly
on long-distance fiber optic cables. Pillar 3: Ensuring sustainable management of natural resources and addressing
climate change. Policy areas include: (i) Ensuring benefit sharing in the extractive sector; (ii) Supporting climate change
mitigation and adaptation; (iii) Addressing deforestation and forest degradation; (iv) Improving the governance for
sustainable forest management.
E. Poverty and Social Impacts, and Environmental, Forests, and Other Natural Resource Aspects
Poverty and Social Impacts
Reform measures supported under the DPO are expected to benefit the poorest and most vulnerable groups directly
and well as indirectly. None of the prior actions nor their expected outcomes supported by the DPO series are expected
to have significant negative impacts on poverty and shared prosperity. Strengthening Public Financial Management
systems through the pillar 1 may have indirect positive impacts on poor and vulnerable households. Reforms improving
transparency and strengthening the corporate governance of SOEs under the pillar 2, as well as the liberalization of the
telecommunications sector would have a direct and indirect positive impact on well being. The sustainable management
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The World Bank
DRC Foundational Economic Governance Reforms DPO series for Green, Resilient and Inclusive Development
(P177460)
of natural resources envisaged in pillar 3, conducted with strong citizens’ engagement and accountability mechanisms,
are expected to promote development and poverty reduction. Efforts to address forest degradation and deforestation
can result in physical and economic displacement of some small-scale farmers and concession/farm workers currently
operating in the targeted areas and involved in the slash and burn practices. However, the guidelines included in the
Resettlement Policy Framework (RPF) prepared under REDD+ will guide the mitigation of these potential risks, and
particularly those related to vulnerable groups and Indigenous People.
Environmental, Forests, and Other Natural Resource Aspects
DRC has taken significant steps to establish a modern legal and institutional framework for managing the
environmental and social risks of development investments and activities within its border. Several prior actions under
consideration across Pillar 1 and Pillar 3 are likely to have a positive impact on the country’s environment, forest and
natural resources. Two prior actions under consideration in Pillars 2 and 3 will likely lead to more future investments,
and will require environmental and social assessments
.
CONTACT POINT
World Bank
Guillemette Sidonie Jaffrin
Program Leader
Borrower/Client/Recipient
Ministry of Finance
Implementing Agencies
Ministry of Finance
Honore Tshiyoyo
Coordonnateur CSPP
tshiyoyohonore@yahoo.fr
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The World Bank
DRC Foundational Economic Governance Reforms DPO series for Green, Resilient and Inclusive Development
(P177460)
FOR MORE INFORMATION CONTACT
The World Bank
1818 H Street, NW
Washington, D.C. 20433
Telephone: (202) 473-1000
Web: http://www.worldbank.org/projects
APPROVAL
Task Team Leader(s): Guillemette Sidonie Jaffrin
Approved By
APPROVALTBL
Country Director: Jean-Christophe Carret 28-Mar-2022
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