DOCUMENT OF
THEWORLD BANK
FOROFFICIALUSEONLY
ReportNo. 39615-ZR
DEMOCRATICREPUBLICOF THE CONGO
JOINT IDA-IMFSTAFFADVISORY NOTE
ONTHE
POVERTYREDUCTIONSTRATEGYPAPER
April 17,2007
This document has a restricted distribution and may be used by recipients only in the
performance of their officialduties. Its contents may not otherwise be disclosedwithout the
authorization ofthe WorldBank andthe InternationalMonetaryFund.
INTERNATIONALMONETARY FUNDAND
INTERNATIONALDEVELOPMENT ASSOCIATION
DEMOCRATIC REPUBLIC OF THE CONGO
Joint StaffAdvisory Noteon the PovertyReductionStrategyPaper
Prepared by the Staffs o f the International Development Association (IDA)
and the InternationalMonetary Fund(IMF)
Approved byHartwig Schafer (IDA)
andRobert Corker and Anthony Boote (IMF)
April 17,2007
I.OVERVIEW
1. The governmentofthe DemocraticRepublicofthe Congo (DRC) completedits
first fullPovertyReductionStrategy Paper (PRSP) inJuly 2006. The new government,
which was elected inNovember 2006 and took office inFebruary 2007, has confirmed its
commitment to poverty reducing strategies outlined inthe document. This note provides
comments and advice from the staffs o fthe International Development Association (IDA)
andthe International Monetary Fund(IMF)on the PRSP andplans for its implementation.
2. The fullPRSPbuildsuponthe InterimPRSP(I-PRSP), adoptedin2002, and
reflectsthe prioritiesof a countryemergingfromprolongedarmedconflicts,which
ended in2003 with the exception o f continuingviolence inthe easternprovinces. The short
but intense regrettable violence that erupted inKinshasainMarch2007 is a symptom o fthe
yet to be resolvedtensions. These conflicts anddecades o fpoor economic management led
to a dramatic drop innational living standards: per capita income collapsed from
approximately US$380 in 1960 to a little over US$lOO in2004 (in2000 constant U S dollars).
The full PRSP aims at restoringpolitical stability, consolidatingpeace, andreducing poverty
throughfostering accelerated growth. The implementationo fthe PRSP will depend, inter
alia, onthe political support that the new government i s able to muster, and on its ability to
weather the challenges posedbythe difficult political environment.
3. The PRSPsets an ambitiousdevelopmentpolicyagenda, to be implementedwith
public capital andpro-poor spendingestimated at US$3.4 billion for the first three-year
period (2006-08). Public investmenti s projected to increase from US$236 million(3 percent
o f GDP) in2005 to US$1.3 billion (13 percent o f GDP) in2008. Even iffinancing o fthis
magnitude i s forthcoming, it i s not clear that the country has the capacity to absorb such a
rapid expansion inpublic investment.
2
4. The strategy comprises five pillars: (i) promoting good governance and
consolidatingpeace; (ii) maintaining macroeconomic stability and growth; (iii) improving
access to social services andreducingvulnerability; (iv) combating HIV/AIDS; and
(v) improvingcommunity dynamics. The choice o fthese pillars is based on a numbero f
considerations, including: (a) the recent emergence o f the country from armed conflict;
(b) the state o fgovernance; and (c) the need to invest incriticalproductive sectors.
11. DOMESTIC PROCESS, POVERTYDIAGNOSIS,AND THE STRATEGY
A. Participatory Process
5. The processfor preparing the PRSPhas been genuinely participatory.
Quantitative andqualitative surveyswere undertaken inall eleven provinces, and extensive
grassroots consultations were heldwith the support o fthe National Institute o f Statistics and
ten partnernon-governmentalorganizations, with funding from development partners.
Participants comprisedcivil society, private sector, local communities, women and youth
associations, churches, and labor unions. Equally importantly, inview o f the territorial
vastness o fDRC, the geographic coverage included areas that are not often polled, such as
Ituri,Northand SouthKivu, andKatanga, whichwere affected bycivilwar andinsecurity.
The participation process also aimed at bringingthe rebel groups and political opposition
factions into the overall reconstructiondialogue and priority setting. Provincial and sectoral
summaries o f survey results were prepared as inputsto the nationalPRSP inan effort to
capture the diversity o fthis immense country andto prepare the ground for eventual
decentralization.
B. PovertyDiagnosis
6. The poverty diagnosis, which resulted from the surveys and consultations as well
as other available information, is forthright and rich in insights. The richness comes
from an ambitious series o f surveys undertaken by the government over the previous years,
including the MultipleIndicators Cluster Survey (MICS), household and labor survey (1-2-3
survey), and participatory poverty analysis. The outcomes o fthe surveys revealed that
poverty i s overwhelming, affecting more than 70 percent o f the overall population and over
90 percent inthe province o fEquateur. Its dimensions varied substantially across regions
giventhe vast size o fthe country. The surveys also helpedto detect institutional weaknesses
including poor governance and the lack oftransparency and accountability as contributors to
poverty. Areas most affected by the armedconflicts considered lack o f security to be the
most important cause o fpoverty, whereas the isolatedprovinces are most concerned about
scarce food andmeans o ftransportation.
7. The poverty diagnosis could be improved further through additional work such as
surveys on the sources o f livelihoods o fhouseholds andthe structure o f the economy, and
analytical work along the lines o fpoverty and social impact analysis (PSIA) on gender
aspects o fpoverty, which could be supported by developments partners. These would help
devise poverty reductionprograms appropriate for the target population.
3
C. Key Aspects ofthe Strategy
8. The resultsof the povertydiagnosis are reflectedinthe pillarsof the PRSP.
Particular focus was given to addressing security concerns and promoting good governance,
fostering private sector-led growth, and rehabilitating social service delivery.
9. Improvinggovernanceis acomplex andlong-termagenda. The PRSPproposes
to address it invarious ways such as security sector reforms, civil service overhaul, anti-
money launderingmeasures, procurement systemimprovements, and capacity reinforcement
programs. It will be necessary to prioritize and to specify concrete actions inorder to
achieve the objectives stated inthe PRSP. Consolidating security and enforcing property
rights by aworkingjudiciary will be essential first steps for private sector development and
growth.
10. The PRSPemphasizes the role of growthas an importantpart of poverty
reduction. Inparticular, it accords priority to rehabilitating road and energy infrastructure,
including electrification o furbanand rural areas. These sectors are expected to receive high
shares o fthe poverty reductionbudget, comparable to that allocated to primary and
secondary education (PRSP, Table 6). The stated reason i s that roadinfrastructure
maintenance has been neglected for many years, which made transportation between and
withinprovinces extremely difficult and often impossible. The energy sector development
strategy includes the rehabilitation o f Inga dam, promulgation o f anEnergy Code, and
invitingprivate participationto the sector. Inaddition to unleashing the potential for growth,
rehabilitation o froad and other infrastructureis also critical for makingsocial services
accessible to the poor. As the vastness o fthe country inevitably makes such rehabilitation
costly, the staffs believe the highallocation i s appropriate. This belief i s reinforcedby the
recent findings inthe literature that inaccessibility within national territories increases the
probability o fviolence recurring inpost-conflict countries.'
11. Thepotentialcontributionof the miningsector to economicgrowthis notedin
the PRSP. The sector is particularly important becauseit has the potentialto attract private
capital inthe near future, and to kick-start private sector-led growth. The role o fthe
government would be to provide an environment conducive to private investments,
macroeconomic andpolitical stability, and improved governance o fthe sector.
12. An essentialelement for improvingthe livingstandardsof the populationis
ruraldevelopment:over 70 percent o fthe population lives inrural areas, andthe sector
produces 63 percent o f overall output. The government has coauthored anAgricultural
Sector Reviewwith the World Bank, and developed a program aimed at diversifying
production and improvingproductivity. Increased agricultural production and trade would
helpalleviate the serious householdfood insecurity problems facingthe country, along with
information campaigns to preventmalnutritionby improving the utilization o f food by
vulnerable groups. The PRSP also recognizes forestry as a critical sector inachieving the
1Paul Collier andNicholas Sambanis "Understanding Civil War, Evidence and Analysis," Volume 1, Africa-
2005.
4
poverty, governance, and sustainable growth objectives, and spells out the fundamental
policy directions. The continuedimplementation o fthese reforms could be usedas a
progress indicator. The staffs also believe that it will be essential to continue the dialogue
among all stakeholders, and inparticular to ensure that the indigenous people andother
marginalized groups have equal opportunities to participate inmanaging forest resources, and
to access benefits. Inthe fhture, more focus shouldbeplaced on developing new models to
rewardand sustain the DRC's global environmental services such as biodiversity
conservation and carbon sequestration. The study prepared by the Bank and other
development partners could be drawn upon to develop concrete actionplansto achieve the
objectives stated inthe PRSP.2
13. The PRSPstates that accelerated and sustainable economic growth will not be
possible without a dynamic private sector engaged injob creation, development of
industries, and competitive export sector. Creating an environment conducive to private
sector development is hence an important objective, which will be achieved through:
(i) improving the investment climate for both local andinternational investors; (ii) finalizing
the labor andcommerce codes; (iii) the internaldebt dueto enterprises; (iv) further
settling
reducingthe role o f the state inkey sectors, includingby divesting state-owned enterprises
(SOEs), and increasingtransparency ofpartnership andmanagement contracts between SOEs
andprivate companies; and(v) reducingthe commercial debt through the buyback operation
with the London Club. These activities willbe accompanied by strengthening ofthe
institutional andregulatory framework. The staffs urge the authorities to observe the
comparability o f treatment principle among all creditors.
14. Improvingsocial service provision is a priority in the PRSP,demonstrated by the
proposed increase inbudgetary allocations to education and health sectors (including
spending on fighting the HIV/AIDS epidemic) from a combined 15 percent o f the State
budget in2006 to 40 percent in2008 (Table 6). The education sector strategy contains many
worthwhile objectives, but it might be difficult for the country to attain all o f them within the
defined timeframe. Duringthe PRSP cycle, the government is expected to reach a decision
on a credible financing plan and improve budget allocation for education inline with the
sector priorities, as well as take measuresto ensure that allocated funds reachtheir intended
recipients. Inthis regard, external partners appear prepared to step up their support to meet
the financing gap on the condition that the education sector financing plani s credible and
that there i s increased evidence o f improved efficiency as well as efforts to reduce
dependency on external assistance overtime. The recently completedEducationSector
Reviewand ongoing analyses focused on issues o fteacher financing anddeployment, and
school fees. They will provide guidance on how to prioritize among the manyobjectives.
The health strategy proposes to expand health care coverage by creating new infrastructure
andhrther increasingthe number of "health zones." While they are worthy goals inthe
mediumto longrun,the staffs believethat it wouldbemore effective inthe first few years to
The World Bank i s currently assisting the DRCthrough a series o f initiatives, many o f which are co-financed
by and involve collaboration with international partners. These initiatives focus on analytical work, policy
dialogue, and workshops aimed at informing decision making and setting the stage for hture collaboration. The
World Bank i s also financing ongoing services o f an expert to assist inthe legalreview of logging concessions.
5
focus on rehabilitating, reequipping, andrationalizing the existing healthfacilities network,
particularlyinrural areaswhere most o fthepoor live. Inaddition, the government would
need to form a strategy onhow to improve financial accessibility to health and education
services. The objective o fmakingthese services affordable to the poor should be weighed
carefully against the availability of funds.
D. The MacroeconomicFramework
15. The macroeconomic objectivesset for the mediumterminthe PRSPappear now
overambitious,when takinginto account the outcome for 2006 andrevisedprojections
for 2007. To achieve an average real GDP growth o f 7.7 percent for 2006-08, the strategy
identifies priority sectors for growth such as mining, construction and public works, and
trade. The development o fthese sectors i s to be sustainedby private sector investments
particularly inthe miningsector, as well as foreign-financedpublic investment, with total
public investment projectedto increase by 10percentage points o f GDP between2005 and
2008. Real GDP grew by an estimated 5 percent in2006 and i s projectedto grow by
6.5 percent i s 2007. As a result, the average growth rate for 2006-08 i s unlikelyto be more
than6.5 percent.
16. In lightof the outcome for 2006, the governmentneedsto put greater emphasis
on stabilizingthe macroeconomic situationinthe short term, andsubsequently on
preservingit andlayingthe groundworkfor growth. To achieve stabilitywill require
bringingdowninflation, whichrose to more than20 percent (year over year) inearly2007,
andbuildingup internationalreserves, which fell to only 1?4weeks o fimports at end-
February 2007. It will be necessary to exercise tighter fiscal discipline andbetter control o f
budgetexecution with the view of avoiding recourse to domestic bank credit to finance the
fiscal deficit.
17. Highand sustainablegrowthis an importantelementof the povertyreduction
strategyoutlinedinthe document. Itis feasible ifthe country takes advantage o fits
natural wealth efficiently. Inthis respect, improvements ingovernance wouldbe critical as it
wouldhelp alleviate public sector capacity constraints as well as bolster investor confidence.
However, given the level o f investment envisaged, it may be difficult to achieve the stated
objective o freducing inflation to 6 percent in2007-2008 from 21 percent in2005. It could
also runagainst the need for the central bank to buildup the stock o f international reserves to
be able to smooth out the impact o f exogenous shocks.
18. Several issues relatingto growthandsustainabilitymeritfurther analysis. These
includethe needfor: (i) definition o fthe sources o f growth and accompanying sectoral
better
policies; (ii)more in-depth discussion o f the capacity constraints inthe DRC to manage a
large increase inpublic investment; (iii) assessment o fthe country's ability to mobilize
an
substantial external financial support; (iv) an in-depthanalysis of the reforms needed to
develop the trade sector to play a stronger role inpromoting growth and reducingpoverty;
and (v) understanding o f the potential consequences o f large capital inflows on the economy,
including on: (a) the demandfor imports anddomestically-produced goods, (b) the real
effective exchange rate and competitiveness, and (c) the overall balance o fpayments and
debt sustainability.
6
19. Fiscalpolicy is designed to avoid recourse to domestic bank financing and
largely relies on external assistanceto finance the development agenda. Inthis context,
the proposedreforms are inline with the current government planbeing implementedwith
the assistance o f development partners:
e Tax and revenue administration reforms include increasingtax revenuesby
broadening the tax base and by strengthening the tax andcustoms administration. To
achieve this, the authorities intendto (i) increase excises, andlimit customs
exemptions, on oil products; (ii) introduce a VAT inthe medium term (the latter
hinges on improvements intax administration); and (iii) reduce tax exemptions.
However, greater emphasis needsto beput on increasingnon-tax revenues by
improvingthe contribution o fthe DRC's naturalresources to the budget-which
would entail a stronger fight against corruption.
e On expenditures, the challenge i s to improve the efficiency o f current spending in
favor o fpro-poor outlays without jeopardizing macroeconomic stability. Inthis
regard,the implementationo fthe public financial managementplanprepared with the
assistanceofthe Fundis a priority measure to strengthen governance and improve the
quality o fpro-poor spending. Inaddition, increases inthe wage billneedto be
compatible with preservingmacroeconomic stability, and should be approved inthe
context o f an overall civil service reform strategy. The strategy should aim at
improving the quality o f public service delivery and the effectiveness o f its
workforce-including the application o fthe censusresults to the payroll andthe
removal o f ghost workers. The new government should undertake a public
expenditure review to improve the efficiency o fpublic spending.
20. The impact of devolution on the macroeconomic framework merits greater
attention. Under the constitution, 40 percent o f government revenue collected ina province
i s to be retained at the province and an additional 10percent transferred to finance an
equalization fund for investmentpurposes. It i s essential inimplementing this that there i s
sufficient capacity at all levels o f government to preserve macroeconomic stability.
21. Monetary policy reforms should be strengthened to give a greater role to the
banking system in private sector development. The strategy proposes improvementsto
micro-finance as a way to helppro-poor growth. More emphasis should be put on the reform
o fthe bankingsystemto improve financial intermediation as this will be critical inthe long
run. The strategy couldalso includecurrent plansfor improving the operations ofthe central
bank and completing its restructuringandrecapitalization; strengthening thebankingsector
supervision function o fthe centralbank; and completing the restructuring o f commercial
banks.
22. An alternative scenario is briefly sketched out inthe PRSP. Although less
ambitious, it still requires very large external assistance. It assumes slightly lower external
financing and government capital spending. However it is unclear to what extent it is
consistent with the outlined poverty reduction objectives; which sectors will be affected by
7
the lower spending;andwhat the reformpriorities under such a scenario would be. It would
be useful to flesh out its implications inmore detail.
111. IMPLEMENTATION, MONITORING,AND EVALUATION
23. Implementation,monitoringandevaluationplansfor the povertyreduction
strategy haveyet to be defined. The Joint StaffAssessment (JSA) o fthe I-PRSP
recommended establishing implementationmechanisms, and spelling out the details o f
participatory monitoring inthe full PRSP. The PRSP presents an organizational chart o f
multi-layered implementation, monitoring, and evaluation apparatus. It describes the roles o f
the first five layers, consistingo ffive ministers, an inter-ministerial commission, anda
national coordination unit, which perform essentially supervisory and coordinating functions.
The paper states that the government intendsto put inplace participatory implementation,
monitoring and evaluation mechanisms, but their modalities andthe role o f non-
governmental entities have yet to be determined.
24. The choice of adequateprogress indicatorswill be essentialto evaluate
implementation. The PRSP provides a list o fsuch indicators inthe annex (Table 8). They
consist o ftarget expenditures and two to four measurable progress indicators for five priority
sectors (health, primary education, transport, energy, and environment), andpartially overlap
with the quantitative objectives for reducingpoverty(Table 4). The discussion inthe main
text states that wide consultations were heldto select these indicators. It would be useful to
also provide such details as why these indicators were chosen, how they contribute to
achieving the goals, what their precise definitions are, and how often they will be evaluated.
Iv. PRIORITYAREAS FOR STRENGTHENINGTHE POVERTYREDUCTIONSTRATEGYAND
ITS IMPLEMENTATION
25. To strengthenthe povertyreductionstrategythe authoritiesshould concentrate
their effortsin a number of key areas. These include (i) need to improve the poverty
the
reduction programs and undertake and design surveys to better identify the poor; (ii) the
prioritization o fmeasures identifiedby the PRSP to improve governance; (iii) the
development o fplans to attain the objectives for the forestry sector; (iv) the development o f a
strategy on how to improve financial accessibility to health and education services; (v) an
improvement inbudgetary reporting, as well as strengthening o fbudgetary controls; (vi) the
analysis o f issues relating to growth and sustainability; and (vii) the choice o f adequate
progress indicators andthe type o fmechanisms to monitor implementation. With the
assistance o f donors, the authorities shouldalso identify the areas inwhich donor resources
are or could be available.
26. The new government recentlypresentedto the Parliament its program for 2007-11,
which, consistent with the pillarsofthe PRSP, selected five priority sectors:
(i)infrastructure, (ii) employment, (iii) education, (iv) water andelectricity, and (v) health.
The governmentnow needsto develop a workingplanwith specific actions,costing,
timing, anddefinitionof the entity in chargeat least for the first year, andpreferablyfor
the first few years. The plan should be developed by the existing entities for planningand
budgeting, so as to integrate the poverty reductionprocess into the country's nationaland
8
local systems. This plan should (i) into account the realistic amount of financial and
take
humanresources available, which meansthat thereform agendaincludedinthe PRSP should
be prioritized and properly sequenced; (ii) assign priorities even among the actions included
inthisplan, so that lessurgentprograms canbecut or postponed, shouldthe available
financing fall short; (iii) clarify the links among the overall goals, the proposedprograms, the
macroeconomic framework, andthe progress indicators; (iv) develop a matrix o f goals,
programs, progress indicators, and the entity incharge, which the PRSP does not have
currently; and (v) include an external debt management strategy inanticipation o fpotential
additional space for borrowing post-HIPC/MDRI. Preparingthe working planwill also help
prioritize the needed capacity reinforcementprogram.
27. Improvinggovernance hasbeenidentifiedas the prioritybythe population,and
therefore,should be an importantpart ofthe workingplanfor the initialyears. The
government's program includeda "Governance Compact" betweenthe Government and the
population. The compact is consistent with the priorities identifiedby international partners
on governance issues. It i s advisable to concentrate inthe first years on measures aimed at
securing peace andincreasingtransparency. Improved governance i s particularly important
inpublic finance management, as the authorities currently do nothavea systematic
mechanism to track spendingafter the funds are disbursed by the Ministry o fFinance.
Increased efforts should aim at enhancing transparency and accountability, including the
improvement o fthe technical and managerialquality o f the civil service. The executionrate
o f expenditures intargeted areas i s a progress indicator: a meaningful measure would be the
arrival rate o f funds to endservice providers, rather thanthe departure rate from the Ministry
o f Finance.
28. There is also a needto formulatean actionplanfor eventualdecentralization. .
The PRSP does not reflect the transfer inthe macroeconomic framework, discuss the
devolution o fthe responsibilities from the central government, nor specify how the
equalization fundwould function. The staffs believe how the decentralization process i s
managed would have an important impact on the poor, especially on those who live inpoorer
provinces, and urge these details to beworked out as early as possible. Inthis connection,
the broadarchitecture o fintergovernmentalrelations shouldbe appropriately settledbefore
decentralization i s initiated-including clear revenue and expenditure assignments and fiscal
transfers, the timing and pace o f devolution o fpowers, and the administrative and
institutional capacity necessary at subnational levels. The staffs encourage the authorities to
first concentrate on improving implementation andmonitoring capacity o f the local
governments. The broad principles and plans to improve local capacity mentioned inthe
PRSP as well as the survey results from the provinces could serve as a startingpoint.
29. Providingan environmentconduciveto privatesector developmentis an
importantchallengeto the government. DRC rankedlast inthe world accordingto
"Doing Business indicators." The transitional government has taken some measures to
improve the situation, such as allowing the entry o fprivate competitive mobile telephone
service providers. However, more needs to be done inother sectors, such as railroads,
airports, andport management. The transition to a vibrant competitive private sector-led
economy needs to be managed inan orderly and transparent manner. To this end, the
regulatory framework must be strengthened, and inparticular, for critical sectors such as
9
miningandpower. Inaddition, financial sector development willbe animportant element
for the longterm growth o fthe private sector.
30. Arrangementsfor monitoringandevaluatingimplementationof the PRSPmust
be made as soon as possible. Efforts should aim at integrating the poverty reductionprocess
into the existingnational and local systems while addressing capacity weaknesses. The
creation o fnew entities to take over the tasks o f the existing ones i s not recommended unless
the existing ones are dismantled. The new entities create parallel structures, and often end up
with the same problems as those they replaced, becausemerely creatingnew entities does not
address the underlyingproblems that made the existing entities ineffective.
31. Meanwhile,capacityreinforcementshouldhappeninparallel. Decades o fpoor
management and conflicts are likely to have deprivedthe government officials o f adequate
experience for implementingdevelopment programs, and for collecting and analyzing
reliable statistics. Other stakeholders such as local communities, media, andnon-
governmental organizations also requiretraining inorder to fblfill their roles effectively in
implementation, monitoring, and evaluation. The staffs urge development partners to assist
the government inshaping the capacity reinforcement planthat would complement the
ongoing poverty reductionprograms, andprovide the necessary technical assistance and
financing. Itbehooves the development partners to coordinate their activities to provide the
best support andnot overstrain local capacities.
v. CONCLUSIONAND SUGGESTEDPOINTSFORDISCUSSION
32. The preparationofthe PRSPprovideda framework for holdinga national
dialogueon povertyreductionstrategy,andcoordinatingthe reformagenda. The
surveys conducted duringthe preparation stage producedvaluable information ina country
that lacks systematic andreliable data inmanyareas. The identification o f comprehensive
outcome indicatorswill require additional work. Inthe interim, intermediate outcome
indicators will need to be defined. However, the PRSP provides a good starting point to
continue the dialogue and to implementreforms so that the country's wealth can be
harnessedto improve social welfare inDRC. Operationalizingthe broad principles set out in
the PRSP will bea challenge, but is essential for achievingprogress incombatingpoverty in
the country. The IDA andIMF staffs urge the authorities to take necessary steps to address
the wide-rangingissues summarized inthe previous section.
33. Implementionof the PRSPfaces serious risks. These include: (i) insufficient
improvements insecurity and governance to create an environment conducive to private
sector investments; (ii) difficulties inmobilizing the external financing requiredto achieve
the social andpoverty reduction targets; (iii) inadequate coordination o f donor assistance-to
avoid duplication o f efforts and inconsistent programs; and (iv) inability to develop local
capacity inline with desired implementation and available financing.
34. D o the Executive Directors concur with the staffs' identification o fpriority actions?
Do they agree with the recommendations made by the staffs?
PEACE -JUSTICE - WORK
July 2006
TABLEOF CONTENTS
TABLE OF CONTENTS .................................................................... ............................ 1
ACRONYMS AND ABBREVIATIONS ............................
...................................... 6
.................................................................................................. 6
TABLES ..........................
FOREWORD ........................................... ........................
EXECUTIVE SUMMARY .................................................................... ..................10
1.1 POST-CONFLICT CONTEXT ........................................................
I.2.1.Institutionalframework for PRGSPpreparation ........................................
1.2.2.Preparation process ....................................................................................
CHAPTER 2: DRC POVERTY DIAGNOSIS ................... ............................. 16
2.1. PERCEPTIONS OF POVERTY .................................................
2.1.1.3. Absence ofpeace
clusion................................................. .......................................... 20
...................................... 21
2.2.2. Profile of absolutepoverty in the DR
...................................... 25
................................................. 27
.......................................... 21
2.3. SECTORAL AND THEMATICAL DIAGNOSIS ........... ............................. 29
2.3.I.Governance . ......................................................
........................
2.3.1.2. Adminish ance ................
2.3.1.3. Economic
2.3.2.Sectors with
..............................................................................................
.......................................... 35
1
CHAPTER 3: POVERTY REDUCTION STRATEGY ..................... 48
I.VISIONANDOBJECTIVES ....................
PILLARS OF THE STRATEGY ...................
PILLAR 1.PROMOTEGOODGOVERNANCEAND CO
INSTITUTIONS.......................................... ............................ 51
I.I.Promotinggood governance....................
51
1.1.2.Politicalgovernance........................................................................................................................................
1.1.1.Administrative governance.............................................................................................................................
54
1.1.3.Economic governanc 55
1.1.4.Improve the quality ................................ 59
I.2. Consolidatepeace and security............................................................................................................ 60
1.2.1. Demobilization, Disarmament, andReintegration.......................................................................................... 61
1.2.2. Integration and administration of
1.2.3. Securityofpersons andproperty .................................
1.2.4.Promotion of "good neighbor" re
PILLAR 2. CONSOLIDATEMACROECONOM
2.I.Macroeconomicframework andpolicies.............................................................................................. 64
2.1.1. Fiscalpolicy.................................................................................................................................................... 65
2.1.2. Monetary polic
2.1.3. External policy
2.2.Boost economic a
2.2.1. Consolidatethe sectorswith growth potential ................................................................................................ 69
2.2.2. Promotethe private sector .............................................................................................................................. 77
PILLAR 3: IMPROVEACCESS TO SOCIAL SERVICESAND REDUCEWLNERABILITY ............................ 81
3.I.Education ................................................................................................. ............................... 81
3.1.1. Universal primary education
3.1.2. Secondary education ............
3.1.4. Non-formal education..................................................................................................................................... 83
3.1.3. Higher anduniversity-level education............................................................................................................ 83
3.2.Health................................................................................................................................................... 84
3.2.1. Developmentof healthzones
3.2.2. Strengthening at the
3.2.3. Streahlining at the c
3.3. Water supply and sanitation................................................................................................................. 86
3.4. Urbanpoverty............................................ ............................ 87
3.4.1. Improve the livingconditions of the urban ................ .87
3.4.2. Improving town planning and enhancing a .................................................... 87
3.4.3. Overcome the shortageandpoor quality of housing....................................................................................... 87
3.5. Socialprotection 87
3.6. Culture, science, ogy .......................................................................... 89
PILLAR 4. COMBATHIVIAIDS......................................................................................................................... 89
4.I.Prevent and stabilize the transmission of HIV and STIs ...................................................................... 90
4.2. Speeding treatment and improving the quality of life ofpersons living withHIV/A
4.3. Attenuate the socioeconomic impact ofHIV/AIDS on the community .....................
4.4. Building the coordination and monitoring and evaluation capacity at all levels
PILLAR 5: PROMOTELOCALINITIATIVES(DYNAMIQUE COMMUNAUTAIRE).....................
CHAPTER 4: IMPLEMENTATION, MONITORING, AND EVALUATION OF THE PRS ......93
4.1. Basic principles ....... ............................ 94
4.2. Implementation. ............................................................................................................... 94
4.3. Monitoring and evaluation ................................................................................................................... 95
4.4. Implementation, monitoring, and evaluation mechanisms
4.4.2. Implementation,monitoring, and evaluationbodies
............................. 100
4.5.2. Impact monitoring ........................................................................................................................................ 101
4.5.3. Participatory monitoring and evaluation (SEP) ............ 101
4.6. Implementation constraints and risks................................................................................................. I02
2
4.6.1. ENDOGENOUS CONSTRAINTSAND RISKS ........................................................................
4.6.1.1.Political constraints and risks ..
4.6.1.2.Economic constraints and risks ........................ 103
4.6.1.3. Constraints and risks associate
4.6.1.4. Social and human constraints and risks ....................................................................................... 104
4.6.1.5. Constraints and risksfrom the lack of reliable statistics.............................................................. 104
4.6.2. EXOGENOUS CONSTRAINTSAND RISKS ................................................................................................. 104
ANNEXES .................................................................................................................. 105
A N N E X I : MACROECONOMIC FRAMEWORK TABLES, BASELINE SCENARIO...........106
TABLE 8. DEMOCRATIC REPUBLIC OF CONGO: PRINCIPAL SOCIOECONOMIC
INDICATORS, 2006-2008 ........................................................................................ 106
DOMESTIC PRODUCT AT CONSTANT PRICES, 2006-2008 ................................................
TABLE 9. DEMOCRATIC REPUBLIC OF CONGO: SECTORAL BREAKDOWN OF GROSS
107
TABLE 10. DEMOCRATIC REPUBLIC OF CONGO: RESOURCE-EMPLOYMENT BALANCE
AT CURRENT PRICES, 2006-2008 ...........108
TABLE 11.
2006-2008
TABLE 12. DEMOCRATIC REPUBLIC OF CONGO: GOVERNMENT FLOW OF FUNDS,
2006-2008 ...........................................................................
TABLE 13. DEMOCRATIC REPUBLIC OF CONGO: BREAKDOWN OF PRIMARY
EXPENDITURES B Y GOVERNMENT DEPARTMENT, 2006-2008 .............................. 111
TABLE 14. DEMOCRATIC REPUBLIC OF CONGO: BALANCE OF PAYMENTS, 2006-2008 ..114
TABLE 15. DEMOCRATIC REPUBLIC OF CONGO: INTEGRATED MONETARY SURVEY,
2006 - 2008. ................115
A N N E X 11: MACROECONOMIC FRAMEWORK TABLES, ALTERNATIVE SCENARIO.. 116
TABLE 16. DEMOCRATIC REPUBLIC OF CONGO: PRINCIPAL SOCIOECONOMIC
INDICATORS, 2006-2008 ....... ........................... 116
3
ACRONYMS AND ABBREVIATIONS
ADQ : Association de De'veloppement de Quartier [neighborhood development association]
ADV : Association de Dkveloppement de Village [village development association]
AfDB :African Development Bank
AIDS/HIV : Acquired ImmuneDeficiency SyndromeiHuman ImmunodeficiencyVirus
APNURC :Appui au Programme National d'Urgence pour le Renforcement des Capacitb
[support for the emergency national capacity building program]
APRM :Accelerated ParticipatoryResearchMethod
AT1 :African Trade Insurance Agency
BCC :Central Bankofthe Congo
BCMI :Bureau de Coordination des Marche's d 'Infrastructures
[infrastructure contract coordination office]
BUNADER :Bureau National deDe'mobilisation et deRdinsertion
[National Office for the Demobilizationand Reintegrationo f Combatants]
CADECO : Savings Bank ofCongo
CAM1 : CadastreMinier [miningregistry]
CEDAW : Convention onthe Elimination ofAll Forms ofDiscriminationAgainst Women
CENAREF : Cellule Nationaledes Renseieements Financiers [financial intelligence unit]
CEPLANUT :Nutrition PlanningCenter
CGF : Congolese franc
CIAT :International Committee inSupport ofthe Transition
CI-SNLCP :Interministerial Commission on Implementation ofthe National Poverty Reduction
Strategy
COMESA :CommonMarket for Eastern and Southern Africa
CONADER : CommissionNationale de De'mobilisation et deRCinsertion
[National Commission for the Demobilization and Reintegration of Combatants]
CPCM : Comite Permanent de Cadrage Macroe'conornique
[standing committee on the macroeconomic framework]
CPLP :Provincialpoverty reduction committee
CTSRP :Poverty Reduction Strategy Technical Committee
DBC : Distribution of Contraceptives at the Community Level
DEME :Macroeconomic ResearchDirectorate
DEP :ResearchandPlanningDirectorate
DFID :Department for InternationalDevelopment
DRC : Democratic Republic of the Congo
DTO : Treasury Management and Payment Authorization Directorate
EAD : Decentralized administrative entity
EFA :EducationFor All Program
EITI :Extractive IndustriesTransparency Initiative
ENHAPSE :National Survey ofHousingand Socioeconomic Profile ofHouseholds
FGT : Foster-Greer-Thorbecke
FNRP :NationalPoverty ReductionFund
FONAREM : National HouseholdRehabilitation Fund
FRP :Poverty Reduction Fund
GDP :Gross Domestic Product
HC : HealthCenter
HIPC : Heavily IndebtedPoor Country
HLI : Highlylabor-intensive
HPI-1 : HumanPoverty Index for developing countries
ILO : International Labour Organisation
IMF : International Monetary Fund ,
INS :National StatisticsInstitute
I-PRSP : InterimPoverty Reduction Strategy Paper
IPU :Informal ProductionUnit
MASF : Ministryo f Family and Social Affairs
MCT : Mother to Child Transmission
MDGs : MillenniumDevelopment Goals
MTEF : Medium-Term Expenditure Framework
M W F P :MaternityWithout RisMFamilyPlanning
4
NHDR :NationalHuman Development Report
NICT :New Informationand Communications Technologies
OCPI : Congolese Poverty andInequality Observatory
OGEDEP : Public Debt Management Office
PAR :Rehabilitation Support Program
PCDSP : Private Sector Development andCompetitivenessProgram
PDR : Ex-Combatant Demobilization and Reintegration Program
PEG : Government Economic Program
PEV : ExpandedVaccination Program
PHC : Primary HealthCare
PIDR :Interim Demobilizationand Reintegration Program
PIR : EnhancedInterimProgram
PMPTR : MinimumPartnership Program for Transition and Recovery
PNAG :National Program to Improve Governance
PNC : Prenatal care
PNLT :National Programto Combat Tuberculosis ,
PNMLS :National Multisectoral Programto Combat AIDS
PONC :Postnatal care
PPA :ParticipatoryPoverty Assessment
PPP :Purchasingpower parity
PRGF :Poverty ReductionandGrowthFacility
PRGSP :Poverty Reductionand Growth Strategy Paper
PROCER :Job Creation Program
PRONANUT :National Nutrition Program (former CEPLANUT)
PRONAREM :NationalHouseholdRehabilitationProgram
PRS :Poverty Reduction Strategy
PSC : Preschool care
PUSPRES :Emergency Support Program for the Economic and Social Reunification Process
REGIDESO :Water DistributionAuthority
RESEN :StatusReportontheNationalEducationalSystem
RESP :Health andPoverty Status Report
RH :Reproductive Health
RVA : Risk andVulnerability Assessment
SADC : SouthAfrica Development Community
SENAREC :National Capacity Building Secretariat
SMIG : GuaranteedMinimumWage
SNEL :Socikte'Nationale d'Electricite' [national electric power company]
SNHR :ServiceNational d'Hydraulique Rurale [rural waterworks department]
SNSA :Service National des Statistiques Agricoles [agricultural statistics department]
SOPPPOC : Opinion Poll on the Congolese People's Perception of Poverty
STIs : Sexually Transmitted Infections
UCOP : Coordination Unit for the Emergency Support Program for the Economic and Social
Reunification Process
UN :UnitedNations
UND : Unitd des NaissancesDksirables [desirable births unit]
UNDP :UnitedNations Development Programme
UNICEF :UnitedNations Children's Fund
UPPE-SRP : SteeringUnit for the Poverty Reduction Strategy Preparationand Implementation
Process
VG :Vulnerable Group
W B : World Bank
WHO :World Health Organization
5
BOXES
1. Methodolo ................................................................... 17
2. Psychologi
3. Perception
4. Perception ........................................................
5. Perception ........................................................................................................ 33
6. Perception ................................................................... 40
7. Perception
8. Perception ......................................................................................................... 42
9. Perceptionof the precariousnessof life as a widow........................................................................................................ 43
I O .Perceptionofwomen's problemsinrural a ................................................................... 44
11. Perceptionof vulnerabilityassociatedwith
12. Survivalstrategies inthe DRC...................
13. Actions andreforms targetingpublic administrationreform........................................................................................... 50
14. Actions andreforms undertakeninthejudicial system................................................................................................... 51
15. Actions andreforms underwayinrespect of corruption ..................
16. Actions andreforms undertakenwith customs adminis
17. Actions andreforms undertakeninrespect oftax administrationmodernization............................................................ 55
18. Actions andreforms undertakeninthe context ofmodernizingnontax administration .................................................. 56
19. Measuresandreformsregardingcontrollingthe managementof
21. Actions taken inthe area ofpoliticalgovernance........................
20. Actions carriedout inthe context of public procurementreform
22. Actions inthe areaof integration andimprovedadministrationofthe Army andPolice................................................ 61
23. Actions takeninthe areaofpublic debt manageme
24. Programs andprojectsunderwayinthe area of agr ........................
25. Actions takeninthe forestry sector........................
26. Programs andprojects currently underwayinthe transport sector................................................................................. 74
27. Actions takeninthe mining sector ........ ......................... .................................................................... 75
28. Actions carriedout inthe electricity se
29. Actions andreforms undertakeninthe
30. Actions taken inthe employmentsector.......................................................................................................................... 79
31, Actions takeninthe educationsector.............................................................................................................................. 81
32. Actions takeninthe health sector
33. Maindonors involvedinthe wat
34. Actions inthe socialprotectionarea ............................................................................................................................... 87
35. Actions taken inthe fight against HIV/AIDS.................................................................................................................. 89
36. MechanismsinplaceduringPEGimplementation 97
CHARTS
Chart 1.Trend ofpovertyinthe DRC .........................................................................................................................
Chart 2. Poverty andinequalitysimulationfor the DRC, 1960-2022
Chart 3. Public Financein% of GDP, 2005-2008
6
TABLES
Table 3. Sociodemo .........................
Table 4. Quantitativ s.......................
Table 5. Summary o
Table 6. Allocations ........................ 65
Table 7. Pattern of s ............................
Table 8. Democratic ....................................
Table 9. Democratic at constant prices, 200
............................ 108
Table 11. Democratic Republic of Congo: Government flow of funds, 2006-2008 ............................................................. 109
Table 12. Democratic Republic of Congo: Government flow of funds, 2006-2008.
Table 13. Democratic Republic of Congo: Breakdown of primary expenditures by
114
Table 15. Democratic Republic of Congo: Integratedmonetary survey, 2006-2008 ............................................................
Table 14. Democratic Republic of Congo: Balance ofpayments, 2006-2008 ......................................................................
Table 16. Democratic Republic of Congo: Principal socioeconomic indicators, 2006-2008 ........I116
15
Table 17. Democratic Republic of Congo: Alternative scenario-Sectoral breakdownof Gross Domestic Product
Table 18. Democratic Republic of Congo: Alternative scenario-Resource-employment balance, 2006-2008 ..................117
at constant prices, 2006-2008 ......................................................................................................................................
118
Table 19. Democratic Republic of Congo: Alternative scenario-Government flow of funds, 2006-200 119
Table 20. Democratic Republic of Congo: Alternative scenariehtegrated monetary survey, 2006-200 120
Table 21. Democratic Republic of Congo: Alternative scenario-Balance of payments, 2006-2008 ........ 121
Table 22. Profile of urbanpoverty... ................................................................................................................. 122
Table 23. Profile of rural poverty....................................................................................................................... 123
7
DRC-AdministrativeMap
8
FOREWORD
1. The preparationo fthe Poverty Reductionand Growth Strategy Paper (PRGSP) o f
the Democratic Republic of the Congo (DRC) comes three years after the adoption o f the
InterimPoverty Reduction Strategy Paper (I-PRSP). The process was carried out in an
environment marked by emergence from a devastating conflict, one o f the longest
political transitions ever in Africa. The current strategy builds upon the efforts to
normalize political life in the DRC, inwhich respect the democratic elections scheduled
for 2006 constitute an important turningpoint.
2. Accordingly, the PRGSP will provide the new Government emerging from these
elections not only with a framework for national reconciliation and the consolidation o f
peace, but also with a frame o f reference for government policy and the convergence o f
cooperationwith development partners to revitalize the economy and combat poverty.
3. This PRGSP, as a unified framework for development planning, is deliberately
modest in scope and in keeping with the short- and medium-term objectives for 2006-
2008 as well as the MillenniumDevelopment Goals (MDGs). It will permitan upgrading
o f the State's institutions and structures, the introduction o f appropriate sectoral policies
consistent with program objectives defined by the people, and capacity building with a
view to reachingthe completionpoint under the HIPC Initiative.
4. The Government is firmly committed to continuing the reforms initiated since
2001 inorder to mobilize the resources needed for the poverty reduction programs in an
environment characterized by democracy, justice, and equity.
5. The challenge before the country today is to bringthe DRC out o fthe longperiod
o f sociopolitical crisis and return it to the path o f sustainable development with justice
and wisdom.
6. The preparation o f this final PRGSP involved the participation o f all, men and
women alike, ina spirit o f consensusbuilding. Inthis connection, our thoughts go out to
the late Justin Kazadi Tambwe, the Deputy Coordinator o f the UPPE-SRP, who passed
away unexpectedly on May 16,2006.
9
EXECUTlVE SUMMARY
7. The Poverty Reduction and Growth Strategy Paper (final PRGSP) was
prepared in a difficult but much more promising context, characterized by a
number of positive effects from implementation of the actions called for under the
interim version (I-PRSP). With the support o f the international community, the country
i s gradually emerging from the conflict, and reunification and peace are being
consolidated throughout the national territory. The political process began with the
organization o f the constitutional referendum inDecember 2005 and the promulgation o f
the constitution and the election law in February 2006. Inexorably, the path toward
organizing legislative and presidential elections has been mapped out. The efforts to
emerge from the political crisis were buttressed by courageous reforms: (i) fiscal and
monetary reforms; and (ii) reforms in key sectors o f the national economy. Despite
several setbacks, which are hard to avoid in such circumstances, the reforms undertaken
by the Government brought about clear improvement in the macroeconomic
environment. Inflation has been relatively well controlled, the national currency has
stabilized, and the country has returned to positive growth rates. To consolidate these
gains and, in particular, to improve their positive spillover effects on the lives o f the
people, the Government intends vigorously to continue to intensify these reforms. This
will enable it to rein inthe effects o f cyclical and structural shocks, whether domestic or
external in origin, so as to reach the completion point o f the Heavily Indebted Poor
Countries Initiative (HIPC Initiative) in2007.
8. The process of preparing the final PRGSP was complicated and laborious,
but the Government insisted that it be carried out rigorously and systematically.
The objective pursued was to have a high quality PRGSP the contents o f which were
assimilated, internalized, and legitimized by all stakeholders working in a responsible
partnership. From the methodological standpoint, the process combined qualitative and
quantitative methods in order to: (i) conduct a poverty diagnosis; (ii) the long-
define
term vision o f development; (iii)formulate the strategy; and (iv) develop the
implementation, monitoring, and evaluation framework and mechanisms for the actions
called for underthe strategy. Participation took the following forms: (i) the organization
o f sectoral and theme-based consultations and focused studies; (ii)the systematic
involvement o f civil society organizations inthe process, inparticular inthe organization
o f participatory consultations with grassroots communities; (iii) the organization o f
qualitative and quantitative surveys; (iv) the involvement o f national experts and the
sectoral ministries; (v) the organization o f capacity buildingworkshops at the central and
provincial levels; and (vi) the participation o f the development partners.
9. The qualitative and quantitative diagnosis clearly underscores the
multidimensional nature of poverty. Some o f its dimensions are tangible and can be
quantified, while others are intangible and can only be perceived through proxies. The
results o f the 1-2-3 survey show extremely highrates o f monetary poverty (71.34 percent
o f the poor) and inequality (Gini index o f 40 percent) which vary sharply by area o f
residence (61.49 percent o f the urban poor have a Gini index o f 40 percent, while 75.72
percent o f the rural poor have a Gini index o f 36 percent), by province (the poorest
provinces are inthe easternpart o f the country), by socioprofessional group (with greater
poverty in the informal sectors), and by demographic variable (greater poverty among
young couples and the elderly). The human development indicators (education, health,
access to socioeconomic goods and services) as well as indicators on the prevalence of
HIV/AIDS, living conditions, and social protection, not only confirm the foregoing
diagnosis, but also establish that poverty in the DRC i s a generalized, chronic, mass
10
phenomenon. The diagnosis further establishes that the individual and collective factors
which explain poverty and the vulnerability o f the people are, among others: (i) family
structure; (ii)education level (of the head of household or parents); (iii) employment
status; and (iv) the province o f residence. Inview of the above, the DRC would be hard
pressed to achieve the Millennium Development Goals (MDGs) by 2015.
10. The long-term development vision (known as Vision 26/25) emerged from
the participatory process as the sole bulwark on which the PRGSP strategy should
be based. This vision contemplates building a Society o f Hope based on: (i) national
unity and territorial integrity; (ii) security, justice, equality, and the rule o f law; (iii)
work, wealth, prosperity, and sustainable development; and (iv) peace and national
solidarity. On the basis o f these fundamental values, Congolese society will move by
2030 toward double digit growthrates with an equitable redistribution o f wealth aimed at
achieving the MDGs. Four cardinal principles are set forth in this vision, namely: the
rule o f law, a decentralized governance system, a pluralist democracy, and egalitarian
democracy built fundamentally on people shaped by culture and formed by a liberating
education. The last o f these should produce free citizens capable of innovating, thinking
independently, and transforming their living conditions by taking the steps necessary for
their individual and collective development, citizens prepared to lead the country while
placing major emphasis on the well-being o f all. The objective is to pull the DRC up to
the human development level of the intermediate countries and converge toward
the Millennium Development Goals.
11. The strategy adopted b y the Government focuses on five groups of problems
identified by the people during participatory consultations in grassroots
communities and the diagnosis of monetary poverty, so as to align the PRGSP with
the prospect of achieving the MDGs. It is based on five major pillars: (i) promoting
good governance and consolidating peace through institution building; (ii) consolidating
macroeconomic stability and growth; (iii) improving access to social services and
reducing vulnerability; (iv) combating HIV/AIDS; and (v) supporting dynamism at the
community level. The strategies for reducing monetary and human poverty call for
strong and equitable economic growth and for Vision 26/25, to be fulfilled over the next
25-year generation. Such growth is particularly dependent on peaceful and secure
conditions and on good governance. Poverty reduction would entail the equitable
redistribution o f this growth, determined by political, institutional, and sectoral reforms
designed to enhance transparency and decentralization on the one hand, and to improve
access to basic social services, reduce vulnerability, and combat HIV/AIDS on the other.
12. The implementation, monitoring, and evaluation of the PRGSP require the
development and introduction of the proper institutional framework and
structures. Accordingly, in the short term, particular emphasis will be placed on
building the capacity o f various stakeholders in the areas of poverty analysis and the
planning, financing, and implementation o f priority poverty reduction programs and
projects. The strategy will be implemented using a participatory monitoring and
evaluation system organized as follows: (i) monitoring o f strategy execution; (i)
monitoring of the poverty indicators; and (iii) assessment o f the impact o f the strategy's
policies.
13. Implementation of the PRGSP is subject to both endogenous and exogenous
constraints. The factors which might inhibit successful implementation o f the strategy
pertainto security, political, institutional, economic, and social considerations.
11
Chapter I: Cantext and PreparationProcess
PRGSP
L
12
1.1Post-conflict context
14. This Poverty Reduction and Growth Strategy Paper (PGRSP) has been prepared
following the conclusion o f the National Peace and Reconciliation Agreement
(December 16, 2002) which led to the founding o f the transition institutions, including a
Government of National Unity which took office in July 2003 as well as a Parliament
and a Senatein2004, including all politicalparties as well as civil society.
15. The new Constitution adopted in December 2005 by referendum and
promulgated on February 18, 2006, as well as the legislative and presidential elections
scheduled for the second half of 2006, will round out the democratic process aimed at
restoring the rule o f law inthe Democratic Republic o f the Congo.
16. Like the peace accord, the PRGSP was prepared ina difficult economic climate
characterized by diminished economic resources, the scaling back o f international
financial cooperation, declines in investment and exports, the accumulation o f domestic
and external deficits, and the persistence o f external indebtedness, estimated at
US$10.822 billion as of December 31, 2005 (following debt relief). In 2005, debt
services payments made amounted to US$154.1 million. They will come to US$251.6
millionin2006.
17. Onthe social level, the current situation i s characterized by increasedpoverty: the
proportion o f persons living below the poverty line (80 percent in 2001 and 70.68
percent in2005) i s subject to even greater disparities. Similarly, the quality of and access
to basic social services have deteriorated. The precariousness o f the social situation i s
exacerbated by the highprevalence o f the HIV/AIDS pandemic, the destruction and lack
o f maintenance o f social infrastructures, the existence o f a large number o f injured
victims o f the conflicts (individuals displaced inthe interior as well as refugees abroad),
and a pronouncedincrease inthe number of orphans and street children.
18. Given these concerns, the Government i s convinced that only a change in its
development approach and the introduction o f a cohesive strategy for interventions
which has garnered the buy-in and support o f all the development partners and, in
particular, the beneficiaries themselves, will enable the country to emerge from this
situation of extreme poverty and spiraling conflicts. Thus, it considers it an urgent need
to capitalize on the consensual platform achieved by all the political protagonists
generated by the implementation o f the peace accord. Thus, this PRGSP is destined to
strengthen the process of consolidating peace and security, national reconciliation,
rehabilitation o f the injured, reconstruction, and economic recovery.
19. The economy has responded favorably to the political and security gains. The
economic environment has been characterized by the stability o f domestic prices and the
exchange rate as well as continuation of the economic growth which began in 2003.
Indeed, thanks to the Enhanced Interim Program (PIR), the Government Economic
Program (PEG), and the associated economic and structural reforms, inflation, which had
reached 511 percent in 2000, fell in succession to 135.1 percent in 2001, 16.0 percent in
2002, 4.4 percent in 2003, and 9.2 percent in 2004. It i s estimated at 22.6 percent in
2005. The national currency depreciated by only 10.7 percent between 2001 and 2004.
After uninterrupted drops in GDP o f 5.5 percent a year on average between 1991 and
2000, the growth rate became positive, moving from -2.1 percent in2001 to 3.5 percent
in2002, 5.7 percent in2003, 6.8 percent in2004, and 6.6 percent in2005. The current
13
account deficit, before debt relief, represented 3.4 percent o f GDP in 2005. However,
thanks to the reduction in debt service obtained from our bilateral (Paris Club) and
multilateral creditors under the Enhanced HIPC Initiative, the deficit for 2004 came to
2.0 percent o f GDP, making it possible to increase gross external reserves (excluding
aid) between2001 and 2004 from 4.7 to 6.2 weeks o f imports and goods and services.
20. The results inthe area o fpublic finance have been encouraging as well. Revenue
increased from 6.2 percent o f GDP in 2001 to 11.O percent in 2005. Over the same
period, expenditure increased from 7.9 percent o f GDP to 16.6 percent, implying an
overall deficit on a cash basis o f 0.7 percent o f GDP in2005.
21. As spectacular as these results may be, they remain both insufficient and
precarious, giventhe needs for combating poverty and the rigidities that still characterize
the Congolese economy. It goes without saying that it will be extraordinarily difficult, if
not impossible, to achieve the MDGs by 2015, and working toward them requires
double-digit growth rates for the next ten years, the implementation of pro-poor budgets,
and the continuation o f the economic and structuralreforms.
1.2. PRGSP preparation process
22. The process of preparing the final PRGSP was launched inNovember 2003 by
the Vice President o f the Republic responsible for the Economic and Financial
Commission. It involvedthe participation o f members o f the Government, heads o f local
governments, civil society organizations, the private sector, and the other vital forces in
the country, as well as the development partners. The institutional framework which had
coordinated the preparation o f the Interim PRSP was updated to take account o f the
configuration o f the Government o f National Unity emerging from the political accords.
The preparationprocess was complex andhighlyparticipatory.
1.2.1. Institutional framework for PRGSP preparation
23. With the advent of the Government of Transition, the composition of both the
Interministerial Commission on Monitoring the PRGSP Process and the National
Technical Committee was revised to reflect the new realities. The new framework
includes: (i) the Interministerial Commission on Implementation o f the National Poverty
Reduction Strategy (CI-SNLCP) responsible for reaching decisions on all questions
relating to the process; (ii)the Steering Unit for the Poverty Reduction Strategy
Preparation and Implementation Process (UPPE-SRP) responsible for day-to-day
management o f the process and all questions relating to combating poverty; (iii) the
Technical Committee (CT) made up o f the heads of the Research and Planning
Directorates o f the sectoral ministries and representatives o f civil society and NGOs,
which provides support to the UPPE-SRP in the conduct o f the process and analyzing
sectoral and thematic issues;' (iv) the Consultative Committee of Partners (CCP), a
bipartite structure (Government and donors) responsible for evaluating the PRGSP
process and mobilizing resources; and (v) the Local Technical Committees (CTLs)
' The Technical Committee is subdivided into Sectoral and Thematic Groups: (i) political governance, and
Peace,
administrative and judicial reforms; (ii)Macroeconomic framework and harmonization o f government programs; (iii)
Fiscal and economic reforms, Education; (iv) Private sector, wealth creation, jobs, microfinance, and banking sector;
(v) Rural development and agriculture; (vi) Education; (vii) Health and HIV/AIDS; (viii) Urbanpoverty; (ix) Gender,
vulnerable groups, and security; (x) Environment; (xi) Community-level dynamics and basic services; (xii) Culture,
communications, and new technologies; (xiii) Transport infrastructure; (xiv) Mines; (xv) Energy; and (xvi)
Methodology.
14
established to work on strategy preparation and implementation at the level o f each
province.
1.2.2. Preparation process
24. The PRGSP was prepared onthe basis o fthe consensual conclusions reached and
recommendations made during participatory consultations carried out with grassroots
communities, civil society organizations, the private sector, and the technical staffs of the
sectoral ministries involvedinthe process.
25. As distinguished from the case of the Interim PRSP, the participatory
consultations took place in every province of the country, including the city/province of
Kinshasa. They involved the participation o f representatives o f civil society, NGOs,
religious denominations, various women's and children's associations, sectoral technical
ministries, the private sector, community development organizations at the province and
territorial levels, the Province Governors, and political and technical leaders. All told,
more than 34,995 persons took part inthese consultations.
26. Inaddition to the findings from the participatory consultations, the PRGSP took
into account the main lines of the general reconstructionprogram o f the State as well as
the provisions o f the Sun City Peace Accord, inparticular as regards governance and the
recommendations on reconstruction and the revitalization o f socioeconomic
development.
15
16
INTRODUCTION
27. The diagnosis o f poverty in the DRC presented below i s a unique experiment o f
its kindwhen it i s borne inmind that the country i s still confronting the lack o f security,
difficult access to the provinces, and the mobilization o f entities covered by the survey.*
This hasbeen a major challenge ever since the country gained independence.
28. The exercise highlights the complex and multidimensional nature of poverty.
Poverty has cultural, economic, political, and social facets. It also has legal and human
rights aspects. The poverty study extends its scope to cover the long-term development
opportunities and vision. This complexity constitutes, at the same time, the strength and
weakness of the diagnosis set forth in this chapter. Through its effort to cover, for the
sake of realism, every facet of poverty, the diagnosis pays a heavy price in terms o f its
robustness owing to methodological and conceptual simplifications, as well as to
numerical approximations with scant basis other than the ability to trace the diagnostics
through the results o f each stage o f the process described inthe preceding chapter.
29. This linkage is discussed inBox 1 below focused on the methodology, based on
the grid from the participatory analysis, with the diagnosis extended to thematic and
sectoral analysis based on household and community-level poverty.
30. This diagnosis is based on quantitative data (1-2-3 survey), qualitative data
(SOPPPOC and the AF'P), partial data from various sources such as the MICS 2 survey
o f 2091, and sectoral consultations.
The 1984 census did not have a precise focus on the analysis o f poverty. Studies by the Bureau d'Etudes et
d'Arnknugernent Urbains (BEAU-Urban Research and Improvement Bureau) covered several large cities. The same
i s true of the studies carried out by the Institut de Recherches Econorniques et Sociales (IRES-Economic and Social
ResearchInstitute) inthe 1970s and 1980s.
17
2.1. Perceptions of poverty
31. The profile ofpoverty as experienced and described by the people incommunity-
level consultations and or opinion polls i s multidimensional. It differs according to place
o f residence and varies from province to province. Inaddition, poverty perceptions differ
depending onthe specific social group concerned.
2.1.1. Multidimensionality of the perceptions of poverty
32. The perceptions of poverty revolve around several dimensions o f the people's life
experience. Some o f these dimensions are tangible, while others are intangible. They
pertain primarily to: (i) unmet basic needs; (ii) deterioration in production factors; (iii)
the absence o f peace; (iv) the culture of impunity boosting corruption, injustice, and
exclusion; and (v) poor access to basic social services.
2.1.1.1. Basic needs unmet3
33. Having enough to eat, adequate clothing, housing, and the capacity to consult a
physician when illness strikes, are primordial needs for existence that must be met.
These are the first experiences identified and discussed by the people when they speak
about poverty. These concerns are illustrated by some comments gathered in the
Provinceso f Equateur (Bokude), Kinshasa(Mont-Ngafula), and Bandundu.
"In Bokude where I live, we eat once a day, and have a meal consisting basically of manioc
leaves, chikwangue, or corn meal. Ispend CGF 200 a day, and there are 12 of us."
"We wear Tombola-Buaka (used clothing), "said oneperson in the Musangu neighborhood in
the Commune of Mont-Ngafula in Kinshasa.
The Bandundu community reports that: "We have to go 6 kilometers to get water, and it isn't
potable because it isn't protected. "
34. The results o f the Opinion Poll on the Congolese People's Perception o f Poverty
(SOPPPOC) indicate that 79 percent of the population i s not satisfied with food
consumption levels, 81 percent is not satisfied with its housing, 82 percent indicates the
lack o f ability to pay for health care, and 84 percent o f those polled say they have
problems obtaining adequate clothing.
2.1.1.2. Deterioration of production factors: labor and capital
35. Poverty i s perceived as a situation marked by low production, the absence of
buyers, and the nonexistence of marketing channels. Mr.L.,a farmer and livestock raiser
&om Hehu(Territory o fNyiragongo inNord-Kivu), stated as follows:
"Before the 1996war, I wasproducing 45 metric tons ofpotatoes, while now (after the war) I
can produce only 4 metric tons, so I have to buy the stock I needfrom otherfarmers and then
go resell it in Goma."
36. Poverty i s further perceived as a lack of jobs, initiatives, and long-term vision
owing to the absence of enterprises able to create jobs for the labor force. Where
'The quotations are extracted from: (i)
Analyse Participativede la Pauvreti en DRC, Rapport National [Participatory
analysis of poverty (APP) inthe DRC, national report], Kinshasa, March 2006, and (ii)
SOPPPOC, analytical report,
September2005.
18
businesses do exist, they employ only a very small share o f working age population. An
unemployedmale from Kinshasa says:
"I'm unemployed. I spend my time on the street corner talking about music and soccer, and ifI've
got a little luck, a buddy willgive me CGF SO so Ican go get something to eat in the evening. "
37. Poverty i s also the lack of capital. This i s reflectedinthe inability to access credit
to start up a productive activity. The participatory analysis shows that the lack o f capital
acts as a brake on human development. The observations o f a young agronomist from
Kinshasa illustrate this point as follows:
"Ihavea degreein agronomy, but Ican'tfind ajob. Tosurvive,Iget by by raisingsmall market
garden crops, although the shortage of capital keeps mefrom growing. So I design projects for
other people. Ihave cinderblocks made and resell them."
2.1.1.3. Absence of peace
38. The conflict situation affecting the DRC for forty years has had a negative impact
on the well-being o f the people, most particularly on the psychological level. The
comments on this issue maintainthat:
"Before the 1994 war in Rwanda, life was easy. Since 1994, with the entry of the Rwandese
refugees, the village has become insecure. Before the so-called war of liberation, the situation got
worse, and the people left the village to escape the horrors of the war. The people returned in
2000, but they had lost everything." (Residents of KarangarainNord-Kim)
"In 1996,when the AFDL war started, my husbandjed and the rebels arrested me. Iwas raped in
thepresence of my children. Myfemale grandchildren were also raped in my presence, andfinally,
they took everythingfrom us." (A woman from Nord-Kivu)
"When my parents were away in mourning, I wasjumped and arrested by militiamen and their
commander. He decided to take me as his wife and had me brought to the camp where I spent the
night in his house. That's where the crime occurred. " (A 15-year-oldgirl from Orientale Province)
39. Poverty i s also identified with the continual displacements and property losses
associatedwith the conflicts.
"The people are on the move all the time, unable to return to their villages because of the lack of
security. As a result, the women have become agricultural workers making CGF IS0 a day, or
about US$0.33.Just to survive, the menfrom this village became bearers between the city and the
surrounding markets. (A Kitshangainthe Masisi ofNord-Kivu)
"
19
2.1.1.4. Impunity, corruption, injustice, and exclusion
40. The people are adamant about the culture o f impunity in which they live. It
encourages corruption, injustice, and exclusion. This culture i s regarded as a major factor
behind the suffering endured by the people.
"Unlawful taxes are created tofleece merchants. They are never told the nomenclature of the
taxes. Consequently, tax collectors take advantage of this situation to impose lump-sum
charges. (A merchant from Dimbelenge inKasai Occidental Province)
"
41. In Kamina, in Katanga Province, the prevalence of influence peddling has
resulted in the Peace Tribunal being dubbed the "Tribunal o f Misfortune." It i s
characterized by rampant corruption. People are arrested arbitrarily and convicted on the
slightest pretext, according to participants inthe participatory analysis o f poverty (APP).
Moreover, as a young man from Kinshasa complains:
"The Plateau universitaire neighborhood has always been an insecure place. Nicknamed
`Chad,' it is the site of murders, rapes, banditry, and so on. ''
2.1.1.5. Poor accessto basic social services
42. The inability to go see a physician or obtain care i s one o f the most telling
perceptions of poverty, as indicatedby a citizen of Equateur Province (Bumba). There i s
therefore a predominance o f self-medication and frantic recourse to traditional medicine.
43. The results of the opinion poll indicate that 76 percent o f households are not
satisfied with the education o f their children, while 82 percent are dissatisfied with their
health care. Accordingly, a number o f households throughout the country send only one
or two o f their children to school, quite often boys. Some are obliged to send the children
greater distances in order to continue their studies. And some parents, owing to the fact
that the schools are poorly equipped and lack qualified teachers (insufficient personnel,
underqualified or poorly trained staff, rundown school infrastructures, etc.), do not
educate their children at all.
"So my child can study in the third year of primary school, Ipay thefees of CGF 500 (US$l)
by agreeing to cultivatefive ares (20 by 25 meters) of the teacher'sfields."(Mrs.K, afarmer
inKatanga)
In one community of Orientale Province, parents send their children to a school located more
that 15 kilometersfrom their place of residence.
2.1.2. Perceptionby area of residence
44. Inruralareas, poverty isperceived as a lackofproduction factors whichpreclude
taking advantage o f existing potential. For the most part this consists o f the lack o f
money and the inability to obtain agricultural inputs and technical support. These
problems are compounded by insecurity, difficult access to drinking water, the lack o f
transport infrastructure, and the poor condition o froads inrural areas.
45. In contrast, in urban areas poverty is perceived as a lack of money, jobs,
electricity, easy-to-use means o f transportation, decent housing, drinking water, and
sanitation.
20
2.1.3. Perception by province4
46. For the Provinces o f Sud-Kivu, Nord-Kim, Katanga, Equateur, and Maniema,
poverty i s characterized by: (i) the absence o f peace and security; (ii) loss o f jobs,
the
herds, and cultivated crops; (iii) difficult access to basic social services; (iv) unhealthy
housing; (v) the inadequacy or dilapidation o f school and health infrastructures; and (vi)
injustice and the lack o f freedoms. In Bas-Congo, the people identified, among other
things, the lack of children, the lack of education, and the lack of a spirito f initiative.
47. In Kasai Oriental and Kasai Occidental, the people pointed to the lack of
electricity, inadequately balanced diets, the lack of means o f transport, and the presence
o f erosion. Incontrast, in Equateur Province, the people mentioned the inability to gain
access to agricultural inputs and technical support, the inadequacy and lack o f drinking
water, isolation, poor agricultural production, the difficulty o f accessing markets for
agricultural production, harassments from the administration and police, failed
marriages, polygamy, the work demands on women (household work, work inthe fields,
etc.), and the lack of roads.
48. InBandundu, the people are concerned about the lack of sufficient and balanced
nutrition, poor agricultural production, problems with accessing markets for agricultural
products, and erosion.
49. InKatanga, reference is made to the bankruptcy of GECAMINES, annoyances
from the administration and police, the isolation o f villages, the absence, dilapidation,
and inadequacy of school infrastructure, the lack o f peace and security, conflicts over
land, as well as cyclical community conflicts.
50. In Orientale Province, there were complaints about the lack of socioeconomic
infrastructures. Incontrast, inKinshasa the people spoke of the lack o fjobs, the absence
o f a spirit of initiative, the lack o f sufficient and balanced nutrition, and the lack o f
capital for engaging inproductive activity.
2.1.4. Perceptionby specific social group
51. Participatory consultations with certain vulnerable and at-risk groups led to the
following diagnosis: (i) for children indifficult situations, poverty i s characterized by the
death or absence o f one parent or the other; (ii) for persons living with HIV/AIDS,
poverty manifests itself in being rejected by society; and (iii)for persons with
disabilities, poverty manifests itself in a physical, mental, or social handicap. Moreover,
women specifically raised the issue o f lack of access to financing sources despite their
increasingly important role inboth the production sector and inhouseholdsurvival.
2.2. Poverty Profile
2.2.1. Subjective profile
52. The results of the participatory consultations reveal a poverty profile basedon the five
following groupings: (i) needs; (ii)productive activities; (iii) services; (iv) security
basic basic
andvulnerability; and(v) culture andfamily.
N.B.:specific traits identifiedby theprovinces.
53. For each of these dimensions, households are subdividedinto three categories depending
on the seriousness of the situation: (i) extremely poor; (ii) and fragile; and (iii) but
poor poor
stable.
54. Tables 16 and 17 in the Annex show that the poverty profiles for urban and rural areas
are similar for the following dimensions: (i) needs; (ii) and vulnerability; and (iii)
basic security
culture and family. They differ somewhat inthe dimensions relating to productive activities and
basic services.
2.2.2. Profile of absolute poverty inthe DRC'
2.2.2.1. Poverty threshold6
55. Estimates o f the food poverty line based on data from the 1-2-3 survey place it at CGF
123,070 per person per year in urban areas and CGF 82,755 per person per year in rural areas.
These poverty lines were obtained by determining the value o f the household basket o f most
widely consumed goods representing approximately 90 percent o f total household spending on
food.
56. The average nonfood expenditure of the households in this interval yields the nonfood
poverty line, namely CGF 30,195 per person per year in urban areas and CGF 14,900 per person
per year inrural areas.
57. The sums of the food and nonfood poverty lines come to CGF 153,265 per person per
year inurbanareas and CGF 97,655 per personper year inrural areas.
2.2.2.2. Poverty indexes7and characteristics
A. Overall incidence of poverty
58. For the country as a whole, the incidence of poverty (71.34 percent) is extremely
highby comparison with the other countries of central Africa. The same holds true as
regards the depth (32.23 percent) and severity (18.02 percent) of poverty.
B. Spatial disparities ofpoverty
59. Area of residence. The incidence of poverty i s greater in rural areas (75.72
percent) than inurban areas (61.49 percent). The same phenomenon occurs inrespect of
the depth and severity of poverty. People living in urban areas thus are better off than
those living inrural areas. The same pattern may be observed with regardto vulnerability
to poverty. This evidence tends to favor urbanmigration inthe DRC.
60. Disparities between provinces. The disparities between urban and ruralareas also exist
between the various provinces o f the country. Three provinces have a poverty incidence of 85
percent or more, namely Equateur, Bandundu, and Sud Kivu. The city/province o f Kinshasa (42
percent poor) i s the leastpoor inthe country, followed by Kasai Occidental and Maniema (where
The diagnosis is based on analyses conducted using data from Phase IIIo f the 1-2-3 survey.
Starting from the food poverty line, the nonfood line is derived on the basis o f the nonfood expenditures o f
households for which total food spending falls ina selected interval around that food poverty line (* 10%).
'The traditional instruments for measuring poverty (Foster-Greer-Thorbecke indices) make i t possible to quantify
three poverty indexes: (1) the incidence o f poverty (Po), reflecting the proportion o f poor people ina given population
(inpercent); (2) the depth ofpoverty (PI), whichis anindicator ofthe intensity ofpoverty, the gap separating the poor
and the non-poor, and makes it possible to estimate the financing needed to eliminate poverty in a single blow in
conditions o f perfect poverty targeting; and (3) the severity o f poverty (P2),which assesses the degree o f a society's
aversion for poverty and measures inequality among the poor.
22
the poverty incidence is less than 60 percent). KatangaProvince(69 percent) is poorer thanboth
Kasai provinces and Maniema. The same disparities may be observed in the other direction as
regards the depth and severity of poverty, the contribution to poverty, and the risk of becoming
poor.
Population Po P1 P2
National 100.00 71.34 32.23 18.02
I Area of residence I I I I
Urban 30.76 61.49 26.21 14.10
Rural 69.24 75.72 34.90 19.76
I Provinces I I I 1I1II I
Source: 1-2-3 Survey, 2004-2005 Cjoii
C.Disparities among socioprofessionalgroups
61. Poverty strikes all socioprofessional classes without distinction, but to varying
degrees. Self-employed workers and apprentices are the poorest (77 percent), followed
by manual laborers (68 percent) and semiskilledemployees and workers (71.5 percent).
The incidence o f poverty exceeds 48 percent among management and collaborative
personnel.
Self-employed worker 67.35 75.52 34.75 19.62
Apprentice 0.17 80.25 43.03 24.95
Family worker 11.54 69.40 31.96 18.11
62. This characteristic is closely correlated with the depth and severity of poverty.
The risk and vulnerability o f the socioeconomic groups are also high, although the
structure of the correlationvaries fiom one indicator to the next.
23
D. Sociodemographic disparities
63. The spatial disparities and the disparities at the level o f socioprofessional groups
also characterize the sociodemographic groups (Table 3). Poverty especially affects
households where the head o f household i s between 30 and 65 years of age (over 70
percent are poor). In contrast, there are relatively fewer poor in young households (60
percent) and old households (65 percent).
64. There are no disparities betweenhouseholds headed by men and those headed by
women. Conversely, the depth, severity, contribution to, and risk of poverty are
somewhat more favorable inthe cases headed by males. Inother words, poverty i s more
homogeneous among households headedby menthan by women.
Table 3. Sociodemographic characteristics
Source: 1-2-3 Survey, 2004-2005 (joint analysisby World Bank-Afkistat-UPPE).
65. The relationship between household size and the poverty indexes supports the
thesis that large households have a tendency to be poorer than small households. Thus,
households with 10 or more members are the poorest (incidence o f over 80 percent) and
make the greatest contribution to the poverty o f these sociodemographic groups.
However, below 10 members, the incidence o f poverty drops off significantly, down to
44 percent poverty among households with three members.
66. The relationship between the level o f education o f the head of household and the
poverty indexes supports the notionthat educationimproves householdliving conditions.
This i s confirmed for the DRC where the majority o f the poor (76 percent) live in
24
households headed by an individual with primary school education, whereas the
incidence i s less than 35 percent inhouseholds headed by an individualwith a university
degree.
67. There i s relatively greater poverty among households headed by a polygamist (75
percent) than in those where the head i s monogamous (72 percent). The incidence o f
poverty i s also high among couples living with unmarried partners (72 percent). The
households of single persons appear to be less subject to poverty (53 percent).
2.2.2.3. Inequality indexes and characteristics
68. Generally speaking, the Gini index of inequality is quite high (42 percent). This
suggests the existence o f distributive injustice, discrimination, and virtually endemic
exclusion inthe country. As inthe case of the poverty index, inequality i s characterized
by sizable disparities.
69. The two Kasai provinces and Katanga Province have the highest inequality rates
(with Gini coefficients in excess o f 40 percent). Inequality is relatively low in the
provinces of Bas-Congo and S u d - K i n The city/province o f Kinshasa is also
characterized by highinequality (39 percent).
70. The highest inequality index (45 percent) occurs inthe categories at the extreme
(households headed by a manager and/or by a family worker). The lowest inequality is
found among apprentices (27 percent) and manual laborers (37 percent). Inequalities
appear to be more pronounced among young households (53 percent) and less high in
older households. The difference between households headed by men and those headed
by women is not significant. There does not appear to be any correlation between
inequality and increasing household size, or with the level o f education o f the head o f
household or the latter's marital status; on the other hand, there i s no difference between
inequality inurban areas (40 percent) and ruralareas (39 percent).
2.2.3. Poverty trends in the DRC, 2006-2030
Based on the incidence o f poverty, the Gini index, and per capita GDP for 2005,
simulations were run for the 2006-2025 period with varying assumptions for per capita
GDP growth (5 percent, 8 percent, 10 percent, and 12 percent), a gradual decline in the
Gini index for the poor (1 percent, 5 percent, and 10percent), and the Gini index for the
population as a whole beginning in2009 (5 percent).
The first scenario uses the Gini index for 2005 for the entire period and tracks the
evolution of the corresponding growthrates (Chart 1).
25
Chart 1. Trend of poverty in the DRC
0.80,
-PO 0.05 0.08 0.10 -0.12
An examinationof Chart 1leadsto the following comments:
- With a growthrate of 5 percent ayear, the DRC will notbe able to reduce
poverty by halfby 2015, as the incidence o f poverty would decline from 71
- percentto about 45 percent;
With a growthrate of 8 percent ayear, the DRC couldachieve the first MDGin
- about 2015-2016;
With a growthrate onthe order of 10percent ayear, the DRC couldachieve that
goal inabout 2011-2013;
- With a growthrate onthe order of 12percentayear, the DRC couldachieve that
goal inabout 2011.
71. The second scenario (Chart 2) uses a growth rate of 5 percent a year,
accompanied by an income redistribution policy with a change in the Gini index. This
scenario yields the following results: (i) incidence o f poverty remains stable from
the
independence to the oil shock o f 1978; (ii) beginning in the 1980s, the incidence of
poverty rises to slightly over 80 percent inthe early 2000s; and (iii)
a downward trend i s
observed beginningin2004 and couldcontinue, reaching the 60 percent level in2022.
26
Chart 2. Poverty and inequality simulation for the DRC, 1960-2022
1-0bserued povem +Predicted poverty 1%reductionInGiniof poor
5% reductionin Gin1of poor -10% redudion in Gin1of Door -5% reducbonin Gin of total ~
72. The trend lines shown in the two charts tend to suggest that in the DRC, it i s
possible to reduce the incidence o f poverty by half by 2015 by adopting a
macroeconomic strategy hinging around double digit growth rates if the growth in
question i s accompanied by a distributivejustice strategy.
2.2.4. Determinants of poverty inthe DRC'
73. The analysis of the determinants of poverty in the DRC was carried out using adequate
econometric models: (i) regression; and (ii)
multiple categorical analysis.
2.2.4.1. Multiple regression analysis
74. The results of the regressions confirm that family structure, level of education, type of
employment, and province of residence, among others, are the key determinants of the logarithm
ofthe household assets score.
75. Family structure. A household with a large number of adults has a greater chance o f
having substantial net worth. In urban areas, one additional adult brings about a gain of
approximately 8 percent to 13 percent inthe assets score, as compared to 2 percent to 3 percent
The analysis o f the determinants o f poverty is carried out using adequate econometric models. The results o f this
analysis make it possible to suggest certain policies which might help with poverty reduction. Inview o f the fact that
the analysis o f the determinants o fpoverty withdata from the 1-2-3 survey has yet to be carried out, use was made o f a
proxy representing the household's assets score (possessions or net worth), and the fact that the household has only
one meal a day, to capture living conditions. The explanatory variables o f the estimated models are: (i) household size
and composition (number o f children, number o f adolescents, number o f adults, marital status o f head o f household,
type o f union between the head and hisher spouse or partner, gender o f the head of household, age o f the head o f
househould and hisher spouse/partner); (ii) characteristics o f the head o f household and hisher spouse/partner in
the
respect o f education and employment; (iii) locality o f residence and migratory status o f the head of household; (iv)
the
land holding (variable not included in measuring the dependent variable represented by the household assets score).
First, a linear regression was performed using the logarithm o f the assets score as dependent variable. Then, a
categorical (prohit) regression was performed to explain the fact o fhaving only one meal a day.
27
inrural areas. This result is not surprisinginasmuchas adults have greater needfor capital assets
and also have greater resources available for procuring such assets. However, it is likely that
householdsize is inverselycorrelatedwith consumptionper capita.
76. Level of education. The status of the head o f household and hisker
spouse/partner has a positive impact on well-being. Households headed by an illiterate
individual have 15 percent gains in wealth in urban areas. Also in urban areas, the
corresponding gain for the spouse/partner i s 8.5 percent. In rural areas, the gains from
literacy are small and statistically significant only for the spouse/partner. In respect o f
literacy, the higher the level o f education, the better the living conditions of the
household. Incomparison with other similar countries, however, the returns on schooling
are low inthe DRC. This may be explained by the fact that the formal private sector has
disappeared and wages in the public sector have declined in real terms. This leads to
poor gains from education.
77. Employment. Households in which the head of household is unemployed or has
left the labor market in urban areas are better off than households in which the head i s
employed. This suggests that only those households that have achieved a significant level
o f capital accumulation can afford the luxury o f forgoing work (needy heads o f
household are prepared to work at any trade just to survive). This findingmay also result
from the fact that well-off heads o f household, while declaring themselves unemployed,
are engaging in clandestine and hence highly remunerative economic activities. In
addition, if analysis i s limited to the subsample o f households in which the head o f
household i s working, it i s found that farmers have a tendency to have poorer living
conditions than wage earners and self-employed individuals. This findingi s equally valid
for the head of householdand for hisher spouse/partner.
78. Province of residence. Taking all the explanatory variables into account, among
the urban areas, households in the provinces of Bas-Congo and Kinshasa tend to have
higher living standards. Households in Bas-Congo are also more likely to have good
living standardsamong ruralhouseholds.
2.2.4.2. Categorical analysis
79. Probit analysis o f the fact o f eatingjust one meal a day provides yet another view
o f the precariousness o f living conditions.
80. Family structure. Inrural areas, one additional child (of between 5 and 14 years
o f age) increasesby about 2 percentage points the likelihoodthat the householdwill have
only one meal per day. Inurban areas, for each additional adult, the likelihood o f eating
once a day declines by 4 percentage points. Households headedby women are less likely
to have only one meal per day.
81. Level of education and employment. The level o f education o f the head o f
household has no significant impact on the number of meals comumed daily in the
household. In urban areas, however, the level o f education o f the wife has a positive
correlation with the number o f daily meals. Households in which the head is self-
employed are less prone to have just one meal (6 to 7 percentage points) by comparison
with households headed by a farmer. This conclusion also holds true for households in
which the spouse/partner is self-employed.
82. Province of residence. Kinshasa households have a better situation inrespect o f
food than do households in the other provinces in the country. The majority o f rural
28
households have a highprobability o f having only one meal per day (with the exception
of the provinces o fBandundu and Maniema).
83. Assets score. There is a strong positive correlation between the assets score and
the number o f meals per day. Households inthe first quintile (by assets or wealth score)
have an extremely great probability o fhaving a single meal per day.
2.3. Sectoral and Thematic Diagnosis
2.3.1. Governance
84. The DRC is in a situation characterized by fragile peace, insecurity, and poverty
increased as a consequence of the conflicts. It must address the issue o f the multiple
issues o f governance, which the participatory consultations also identified in political,
administrative, and economic terms as major determinants o fpoverty.
2.3.1.1. Political governance
85. For the past decade, the DRC has been in a spiraling crisis marked by armed
political conflicts which severely undermined its domestic and external stability. This
situation was characterized by the dysfunction of the State apparatus, negative economic
growth, and a deterioration in social conditions attributable to massive internal and
externaldisplacement of the people.
86. During the same period, militias and foreign armies were also present, each
contributing to exacerbating the country's security situation to such an extent that the
DRC was runningthe risk of Balkanization.
87. During the same period, there was a dramatic humanitarian situation, with an
estimated 200,000 refugees on Congolese soil and 380,000 Congolese refugees abroad in
2004. There were an estimated 2.4 million displaced persons internally, in flight from
areas of conflict, and somewhere between 1.5 million and 3.0 million people lost their
lives. The sharp increase in population in the affected areas exerted extremely great
pressure on already inadequate resources, making living conditions for both resident
populations and the newly arriving people extremely difficult.
88. Ithas beennotedthat the policy makers and the Government do not have a strong
democratic culture or great attachment to the general interest, and lack the ability to
resist external and clientist pressures. The State i s confronted by the lack o f efficient
institutions for ensuring the settlement of disputes by peaceful means. Moreover, it has
no appropriate mechanisms for preventing political crises and armed conflicts. The
political governance system suffers from a centralization o f power reflected in a
development planning system with very little involvement o f the beneficiaries in
defining policies, internalization, and ownership. This is also the origin o f inefficient
implementation o f the programs selected.
89. An additional constraint on good political governance stems from inadequate
achievement of the objectives o f the transition, namely: effective reunification o f the
national territory, enhancing security in the country by establishing an integrated army,
demobilization o f former combatants and their reintegration into civilian life,
consolidation o f national unity, the restorationo f a climate o f trust among the Congolese,
and the rebuildingo f the capacities of the communities severely tested by the conflicts,
inparticularwomen, girls, andchildren.
2.3.1.2. Administrativegovernance
90. The image o f Congolese public administration among users i s extremely
negative. The provision o f basic public services not only fails to meet the quality
standards and timeliness required, but has also become a source o f corruption. Access to
these services i s not guaranteed everywhere throughout national territory. An elementary
right, such as the issuance of birth or death certificates, is also not guaranteed,
particularly for people living in remote areas or those who lack sufficient resources to
access that right.
91. Civil servants and State employees have been neglected for several decades,
which i s at the root o f the current state o f public administration. The wages paid are
paltry, career management is characterized by clientism, physical working conditions are
depressing, andjob descriptions and duties are poorly defined.
30
92. Despite the growing number o f labor organizations, they have little capacity to
bringing about positive change in their situation, much less that of the public
administration. Infact, these organizations are often subservient to the public authorities,
who often have a means o f selecting leaders ina nontransparent manner. The Congolese
State, while cognizant o f the inefficiency o f public administration, has still not rectified
the situation despite reforms intended to manage staffing levels, redefine jobs, and
improve the status o f civil servants, the management o f careers, and compensation
matters.
93. Thejudicial system is recognized for its inefficiency, upto the level o f officers of
the courts. While the data available are scant, it may be observed that the sector has
experienced a significant increase inextrajudicial settlements, interms o f court decisions
not enforced and mistrustof thejudicial system.
94. Inaddition, massive violations of the principle of equality of all before the law,
poor management o f human resources and the careers o f officers o f the court, and the
absence o f training programs and public awareness campaigns on the operation o f the
judicial system are all among the flaws underminingthe justice sector.
95. These flaws have an impact primarily on vulnerable persons, who have a right to
quality justice for all in accordance with the principle o f the equality o f all before the
law. However, they concern even more particularly the victims o f the conflicts who have
been dispossessed o f their property, incorporated into armed groups by force, and who
quite properly expect some compensation. The women and children living in the areas
affected by the conflicts, persons without resources and unable to enforce their rights,
persons lacking the education needed to follow the workings o fjustice, are all so many
victims whose rightshave beenviolated.
2.3.1.3. Economic governance
96. The rehabilitation needs o f the macroeconomic framework o f the DRC run up
against the dysfunctional economic structures which impede the consolidation o f
macroeconomic stability and growth, and considerably limit the possibilities for reducing
poverty. The shortcomings at the level o f the economy may be perceived in the high
inflationrates as well as the deterioration inthe current balance o fpayments.
A. Fiscalandmonetarypolicies
97. The macroeconomic situation remained relatively stable during the 2002-
2005 period thanks to improved implementation of prudent fiscal and monetary
policies, but still remains precarious. Year-on-year inflation, which had risen to 511
percent in2000, declined successively to 135.1 percent in 2001, 16 percent in2002, 4.4
percent in2003,9.2 percent in2004, and 21.3 percentin2005.
98. Despite this performance, macroeconomic stability i s still fragile and dependent
on security conditions which place great pressures on spending. In 2004, owing to
additional military spending during the third quarter, the Government experienced
problems controlling other current expenditure, triggering a rapidincrease inbase money
followed by a sharp depreciation of the national currency and the resurgence o f inflation
in2005.
31
A.l. Fiscalpolicy
99. The execution of the financial operations of the State improved with the
implementation of the Government Economic Program (PEG), but still remains
dependent on political and security conditions inthe country. After reachingthe high
levels recorded between 1990 and 2000, the overall deficit (on a cash basis, including
grants) was contained at 1.6percent of GDP between 2001 and 2005. Given the
insufficiency of resources and the inability to compress most essential expenditure, as
well as the conflicts, the State hadproblems financing its deficit. The increased recourse
by the State to monetary financing proved to be an alternative solution for several years.
Accordingly, advances from the Central Bank increased, rising from -0.1 percent o f GDP
in2001to 1.6percent ofGDPin2005.
100. Total revenue (including grants) increased, rising from 6.5 percent o f GDP in
2001 to 13.1 percent in2005, with an average tax revenues o f 5.2 percent between 1997
and 2006, as well as the increases in taxes and royalties paid by the oil companies
(following the increase in world market prices) and the modernization o f the tax
administrations. Despite this performance, the level of domestic resources is low given
the urgent needs to reduce poverty. One o f the major constraints affecting resource
mobilization i s the low efficiency and returns o f the tax system.
101. Expenditure increased from 8.2 percent of GDP in 2001 to 15.3 percent o f GDP
in2005 as compared to anaverage levelof 11.O percent ofGDPbetween 1997and2000,
following the problems experienced with controlling expenditure, in particular on
sovereignty (military and institutional spending) and centralizedpayments o f utilitybills,
where overruns work to the detriment of appropriations for the social sectors. Capital
expenditure and poverty reduction expenditure remained insignificant owing to the
political situation prevailing in the country, which brought to light the problem o f the
administrations' absorptive capacity as well as delayed disbursements o f external
resources.
A.2. Monetary and exchange policy
102. Since 2002, monetary policy has been prudent; however, it remains heavily
dependent on fiscal policy. Monetary policy has been accommodative throughout the
past decade. The Central Bank o f the Congo has had problems containing the growth o f
the money supply (42.5 percent a year on average between 2001 and 2005). Indeed, the
monetary financing o f the fiscal deficit resulted in an increase in base money. In
addition, these deficits led to a loss o f confidence on the part o f economic agents, who
sought refuge in foreign currencies, thus explaining the continuous pressures on the
exchange rate.
B.Externalpolicy
103. Since 2002, the Government has pursued a cautious borrowing policy, but
the DRC nonethelessranks among the most heavily indebted countries in the world.
Efforts to normalize the country's relations with external creditors and the good
performance achieved in the context o f implementing a number o f economic and
structural reforms in 2001 made it possible to reach the decision point under the HIPC
InitiativeinJuly 2003.
32
104. Despite these efforts, the public debt burden weighs heavily on public finances
and the balance o f payments, and appears to be a constraint that is difficult to overcome
and threatens to mortgage the development o f the country. In 2005, the outstanding
external debt (US$10.882 billion) and debt service, representing 6.9 percent o f exports
and 12.9 percent o f tax receipts, continue to pose an onerous burden on public finances.
2.3.2. Sectorswith growth potential'
105. For over a decade, the DRC had negative growth rates, essentially attributable to
the scant contribution o f the sectors with growth potential. After uninterrupted real
declines in GDP o f 5.5 percent a year on average between 1991 and 2000, the growth
rate became positive, moving from -2.1 percent in 2001 to 3.5 percent in 2002, 5.7
percent in 2003, 6.6 percent in 2004, and 6.5 percent in 2005, thanks to the structural
reforms inevery sector of the national economy.
106. As spectacular as these results may be, they remain both insufficient and
precarious, given the needs for combating poverty and the dysfunctions observed in
several of these sectors with growth potential.
2.3.2.1. Rural development and agriculture
107. Rural development. Nearly 80 percent o f the people live in rural areas and are
principally engaged in agriculture, fishing, and stockfarming. However, this population
lives in a precarious situation and absolute poverty, despite the immense potentials
available inthe sector. Indeed, it bears noting that only 17 percent o f the population has
access to safe drinking water and 1 percent to electricity, while 64 percent o f the people
live in rammed earth houses. In addition, 70 percent of the roads and trails accessing
agricultural areas are inan advanced state of deterioration.
108. The rural sector's role as a development pole i s severely handicapped by the
conflict, which resulted in the abandonment of farm operations and massive population
displacements owing to the permanent lack of security. Moreover, productivity suffered
because o f the advanced soil deterioration in the absence o f ecosystems, thereby
aggravating the problems of food security. The rural development sector i s also
synonymous with isolation and the destruction o f basic social services, attributable
principally to the absence of specialized State structures.
A study on the sources of growth inthe DRC was conducted in July 2004. See BernadinAKITOBY and Matthias
CINYABUGUMA (2004), Sources of Growth in the DemocraticRepublic of the Congo: A Cointegration Approach.
InternationalMonetaryFundWorking Paper (July). This study will befurther developedinthe courseof implementing
the PRGSP.
33
109. Agriculture. The agricultural sector is currently suffering from low productivity
resulting in food insecurity, increasedimports o f primary commodities, and a decline in exports
o f cash crops. Despite favorable natural conditions, the agricultural sector has for a number of
years been reduced to subsistence farming. Approximately 97 percent o f the arable land has a
crop season spanningmore than eight months o f the year. Moreover, the country has about 135
million hectares o f agricultural land, or 34 percent o f the national territory, o f which only 10
percent have been improved. As a result, 16 millionpeople are suffering from hunger. The FA0
estimates that almost 73 percent of the Congolese people are living with food insecurity.
Agricultural exports now represent only about 10 percent o f GDP, as compared to 40 percent in
1960. For some twenty years the sector has been experiencing problems of various kinds, in
particular with market access, moving products from the field, conservation, and the production
o f qualityseeds. This haspreventedthis sector from efficiently contributing to economic growth.
Over the same period, there has been a reduction of the agricultural labor force because o f the
conflicts and endemic disease.
2.3.2.2. Forestry
110. The forestry sector i s characterizedby: (i)haphazard exploitation of biodiversity, owing
to the weakness o f the institutions in charge o f the forests, conservation, and the protection of
nature; (ii)
failure to apply the Forestry Code andthe Law on the Conservation ofNature; (iii) the
freezing o f forestry concessions for speculative purposes owing to political clientism, and the
low level o f the area tax; (iv) failure to comply with the regulations in force for the commercial
exploitation o f forests and protected areas; and (v) the exclusion of local communities from the
managementand sharingo f the resourcesgeneratedby the forest.
111. The DRC ranks Grst inAfrica from the standpoint o f the size o f its forests and,
more importantly, inpreservation o f the global environment. The forests are essential to
the survival and development o f at least 40 million Congolese. Within this population,
special mention should be made o f the indigenous peoples living at the edge o f the forest
principally from the natural products from the forest's biodiversity, used for their food,
housing, and health, and for wood-based energy (80 percent o f all the energy consumed
inthe country).
34
112. The DRC is among the ten countries with the greatest megabiodiversity in the
world, with 480 species o f mammals, 565 species o f birds, 1,000 species o f fish, 350
species o f reptiles, 220 species of batrachians, and over 10,000 angiosperms, o f which
3,000 are endemic. This rich capital has not been spared by the various conflicts and
their devastating effects on the fauna and flora. Thousands o f hectares o f forests have
been degraded, resulting inloss o f biodiversity. The protected areas have been subject to
thievery, smuggling, andpoaching.
2.3.2.3. Transportinfrastructure
113. The qualitative and quantitative insufficiency o f the supply o f transport services,
accentuated by the poor condition o f transport infrastructure, i s the DRC's main priority
problem. Indeed, it constitutes an obstacle to sustainable economic growth and does
nothing to facilitate trade or the people's access to other basic social services.
114. The transport network i s made up of 16,238 kilometers of navigable waterways, 5,033
kilometers of railways dating for the most part from the colonial era, 145,000 kilometers of
national and regional roads and secondary rural roads, 7,400 kilometers of urban thoroughfares,
and 270 airports throughout the country, including five international airports (in Kinshasa,
Lubumbashi, Kasangani, Goma, and GbadolitC). This transport system in the DRC no longer
providesthe economic and social sectors with infrastructures and services conducive to trade of
all kinds or whichimprove the mobility ofpersons andgoods.
115. Urban transport i s characterized by the chronic failure to satisfy constantly
growing demand, this because o f operating conditions and the condition o f
infrastructures.
116. Inruralareas, outside the areas servedbythe SNCC andONATRA (rail andboat
transport), services are basically provided by underequipped private operators. As inthe
urban areas, there i s a persistent gap between the supply o f and demand for transport
services, a gap explained by the impassibility if not to say the disappearance o f most
secondary and tertiary roads, the inadequacy o f interconnections between the various
transport networks in order to facilitate fluid traffic flows from areas o f production
toward the urban centers, and the absence o f dredging and buoying on the waterways.
117. The public enterprises which have the monopoly on operating the mass transport
infrastructures are neither high-performance nor competitive owing to the insufficient
amount o f financial resources allocated to making the necessary investments and
maintaining existing infrastructure and equipment. Productivity per employee and the
rate of availability of railroad locomotives (SNCC and ONATRA) are, respectively,
34,000 traffic units (compared to 487,000 TU inCameroon) and 42 percent (compared to
78 percent inGabon and 80 percent in Cameroon). The average cost o f an economy class
air ticket betweenthe DRC and cities inEurope i s US$1,218, as comparedto US$824 for
the neighboringcountries.
118. Because o f the lack of modern handling equipment at the main seaport inMatadi,
where a third o f the dozen piers are no longer inuse, vessels remain there for six days on
average (compared to three days in Douala) for port operations, and a twenty-foot-
equivalent container unit (TEU) handled there costs US$984.20. The functioning o f the
Matadi/Kinshasa railroad (CFMK) i s so poor that containers unloaded at the port take
over 22 days to reach Kinshasa. Consequently, the transport sector accounts for 24.3
percent o f the total cost o f goods imported via that port.
35
119. The disastrous situation o f the transport system in the DRC results from an
environment lacking sensitivity to efficient management inwhich the stakeholders o f the
sector operate. This environment i s an impediment to the proper functioning o f existing
enterprises and the creation o f new ones, and i s characterized by an anachronistic
regulatory framework which provides no incentives, the permanent lack o f security o f
persons and goods, difficult access to the financial markets, and, inparticular, the lack o f
a cohesive policy governing the sector.
2.3.2.4. Mining
120. The DRC has the second largest reserves worldwide of copper and cobalt (10
percent o f the planet's entire reserves). GECAMINES' cobalt reserves represent 80
percent o f the global total. The DRC i s also the world's largest producer o f cobalt. In
1992, the DRC's share of world copper production was 2.5 percent, o f cobalt 45 percent,
and o f zinc 0.5 percent. Export proceeds in 1990 amounted to about US$l billion.
121. GECAMINES was the main mining enterprise in the country, and in 1980
provided about 66 percent o f the State's budgetary revenue. Itplayed an important social
and economic role for many SMEs working in its periphery. For over 30 years, the
company was the main driver o f the economy. It was listed among the largest employers
in the DRC. In 1990 it employed 35,000 people, of whom 91.8 percent were line
personnel. Itprovided the livelihood o f over 258,000 persons.
122. Now, except for the expanded activities in artisanal gold and diamond mining,
industrial mining production has collapsed in its entirety." The copper production o f
GECAMINES dropped from 465,000 metric tons at a price o f US$2,855 a ton (in 1990)
to 19,000 metric tons at a price o f US$1,800 a ton (in 2002), with serious consequences
inthe economic andsocial areas.
123. With the bankruptcy o f GECAMINES, Katanga Province underwent a profound
socioeconomic transformation. The entire population o f the Katanga mining region,
which was dependent onthat enterprise, was plunged into absolute poverty overnight.
124. The restructuring and deregulation o f the mining sector initiated throughout the
country in2004 have led to the expropriation o f small farmer landholdings to the benefit
o f other mining sectors and mining concessions, to widespread fraud, and to
unconscionably one-sided contracts.
2.3.2.5. Electricity
125. The rich hydrography o f the DRC gives it a hydroelectric potential estimated at
100,000 MW, or 13.0 percent of global hydroelectric potential. Total installed capacity i s
evaluated at present at 2,516 MW, or 2.5 percent o f the total potential, and possible
average production at 14,500 GWh. Actual production at present i s only 6,000-7,000
GWh. Hydroelectric production accounts for almost all the capacity (96 percent). The
remainder consists primarily o f low-power thermal power plants, most o f which are
located in isolated areas. The Inga dam on the Congo River i s the primary source of
hydroelectric energy production. It currently has two plants with a total capacity o f 1,775
MW (Inga 1, with six generators totaling 351 MW, and Inga 2 with eight generators
totaling 1,424 MW).
loThe DRC has vast mining potential, including copper, cobalt, zinc, cadmium, diamonds, gold, tin, tungsten, and
manganese.
36
126. Despite their strengths, the Inga power plants taken together are working at only
40 percent o f capacity. A substantial proportion o f this protection i s intended for export,
thus leaving local demand unmet. As a result of this situation, the rate of access of the
people to electrical power i s 1.O percent inrural areas, 30.0 percent inthe cities, and 6.0
percent nationally, while the average for Sub-Saharan Africa i s 24.6 percent.
2.3.2.6. Private sector
127. Despite its weaknesses, the private sector i s the principal source o f wealth and
job creation. The private sector has evolved for some three decades in a particularly
difficult environment. Indeed, since the 197Os, the combined effects on the economy o f
the collapse o f copper prices and the oil crisis, as well as the suicidal measures of
Zairianization and radicalization taken by the regime inpower, contributed to halting the
development o f the productive sectors by introducing a climate o f mistrust, especially
among expatriate economic operators, andhence triggering capital flight.
128. The process o f democratization inthe 1990s once again plungedthe country into
a disorderly process o f multi-party politics and the proliferation o f labor unions, leading
to frequent strikes and a climate o f widespread insecurity.
129. The plundering o f 1991 and 1993, the wars o f 1996 and 1998, and the armed
conflicts also contributed to the destruction of plant and equipment, with the corollary o f
discouraging foreign investment and drying up official development assistance, the
primary source o f finance for public investment. Inthe same period, investment declined
from 13 percent in 1990 to 4.4 percent in 2000. This caused job losses and lower
incomes following the closure o f a large number o f businesses, thus accentuating
unemployment and poverty inthe country. In2005, the labor force participation rate was
63.1 percent nationally, 50.8 percent in urban areas, and 68.1 percent in rural areas."
The predominance o f jobs in small family agricultural enterprises underscores the
fragility o f the labor market and the difficult living conditions o f households.
130. The formal SMEs must deal with an unfavorable political and economic climate
as well as a poorly adapted and poorly applied regulatory framework. Inthis situation,
they are verging on exhaustion and their activities have declinedconsiderably.
131. The share o f the informal economy is continually on the rise in creating wealth
andjobs, to the point where the informal sector now represents a dominant share of the
Congolese economy.
132. The secondary sector i s quite underdeveloped and characterized by the
substantial presence o f the State, thus marginalizing the private sector. Most companies
are State-owned or mixed, often with majority equity holdings by the State. Despite the
ongoing privatizationprocess (PMPTR program), the State remains the major operator in
most economic sectors such as energy, mining, forestry, communications, water supply,
transport, and construction.
133. Most SMEs and SMIs were created with a view to taking advantage o f the
opportunities afforded by a protectionist environment. As matters now stand with respect
to globalization, deregulation, and regional integration, these SMEs and SMIs suffer
from a lack o f competitiveness vis-&vis foreign products because o f supply difficulties
INS, 1-2-3 Survey, preliminary results.
37
and the narrowness o f the national/local market. Exports are the exception to the rule and
represent but a minimalproportion o f national, regional, and worldwide output.
134. Similarly, the financial sector, which had been expected to support this private
sector, has been unable to fulfill its financial intermediation function. Indeed, economic
instability and the dysfunctional nature o f the financial system itself have led to the
gradual marginalization o f this sector, thus striking a fatal blow to its financial
intermediation function. This financial disintermediation, as evidenced by the
insufficient mobilization o f bank deposits, appears to be the final brushstroke in the
picture o f disintegration o f the Congolese economy in general and the private sector in
particular. The fact that the banks attracted insufficient liquidity over the past decade i s
attributable to several factors, including the unattractive deposit interest rates (negative
interms of inflation), the mandatory reserve requirement, the credit ceilings imposed on
banks, and the uneven geographical distribution o f banks. This contributed to the decline
in the national currency, scaled back the significant influence of real investment
expenditure by private enterprises, and reducedthe accumulation of capital necessary for
economic growth. Revitalization o f the financial system o f the DRC is thus a necessity
ifpovertyis tobereduced.
2.3.3. Social sectors
135. The development o f the social sectors in the DRC is faced with structural
difficulties associated with poor governance and the repeated conflicts that have
occurred. The education, health, water supply, and sanitation sectors, as well as social
security, are inan advanced state of deterioration and loss.
136. The general trends show a mixed view o f the sector, even as the demand for
social services interms o f schools, health centers, water supply, sanitation, and housing
i s considerable in view o f the needs o f the constantly increasing Congolese population,
the stagnation o f the nonmonetarized productive sector, and the runaway increase in
poverty.
2.3.3.1. Education12
137. The gross enrollment ratio in primary school has declined sharply, from 92
percent in 1972 to 64 percent in 2002. Insecondary school, it i s estimated at 29 percent
in 2001/2002 as compared to 26 percent in 1977-1978, with an internal efficiency
coefficient o f 36 percent. In addition, there has been: (i)deterioration in the school
survival rate (25 percent) while the school completion rate i s only 29 percent; and (ii) a
low level o f supervision and the existence of inequalities in gross enrollment ratios by
gender (72.0 percent for boys and 56.0 percent for girls) and by place o f residence
(school admission rate o f 71.6 percent in urban areas and 43.6 percent in rural areas).
Moreover, postponed schooling affects more than 16.0 percent o f boys as compared to
12.0 percent of girls in 2001. These deficiencies stem from the inability o f the
educational system to address the needs identified.
138. In2002, a World Bank report entitled "Status Report on the National Education
System" in the Democratic Republic o f the Congo (RESEN) identified four major
problems that undermine access to and the quality o f education inthe DRC, namely: (i)
relatively poor coverage at the primary level, with sizable inequalities in terms o f access
and uncontrolled expansion at the secondary and higher education levels; (ii)serious
Vocationaltrainingwill be the subjectof an in-depthstudyto be conductedduringPRGSPimplementation.
38
deterioration in the quality o f education at all levels; (iii)cumbersome and outmoded
a
system o f school administration; and (iv) an extremely low spending level and an
inefficient and inequitable financing system.
139. Primary education. The primary education system is characterized by: (i) rapid
population growth; (ii)the large number o f children not attending school; (iii) low
population density, a large number of residences that are scattered and difficult to access,
children living in forest areas, and disadvantaged groups; (iv) underqualified teachers
and the shortage o f instructional materials; and (v) instruction in a foreign language and
the highcost o f private education.
140. Secondary education. The following shortcomings have been identified: (i)
social inequality regarding access; (ii) large number o f small schools; (iii)
a outdated
curriculums; (iv) a lack o f qualified teachers in some disciplines; (v) limited resources
for operation and equipment, and the shortage of books; and (vi) pedagogical materials
and the highcost of private education.
141. Higher and university-level education and scientific research. Research and
development, which is called upon to be a leading force inthe country's development, i s
undergoing an acute crisis as it has not been included among the DRC's current
priorities. The following dysfunctions have been noted: (i) social inequalities interms o f
access; (ii)outdated curricula and the multiplicity of courses; (iii) limited number o f
the
qualified teachers, laboratories, and libraries; and (iv) the highcost o f private education.
2.3.3.2. Health
142. As matters currently stand, the extent to which meeting the Millennium
Development Goals for the sector is falling short to an unprecedented degree.
Retrospective surveys on mortality have shown that about 126 children out o f 1,000 die
before reaching their first birthday, and 213 out of 1,000 fail to reach age 5.l3Maternal
mortality i s also high, with 1,289 deaths for every 100,000 live births (MICS 2, 2001).
Some 97 percent of the Congolese population i s exposed to endemic malaria. The
prevalence of fever among children under 5 is 42.0 percent, which corresponds to a
number of episodes ranging from 6 to 10per childper year. It is estimated that 150,000
to 250,000 children under 5 years o f age die from malaria each year. In addition, the
DRC is one o f the 22 countries most affectedby tuberculosis worldwide, with an annual
incidence o f TPM+ o f 160 cases per 100,000 inhabitants. About 23.6 millionpersons are
exposed to onchocerciosis inthe DRC, o f whom more than half (14 million) are infected.
The geographic coverage i s 67.34 percent, while the therapeutic coverage i s 50.12
percent. Of the 300,000 to 500,000 cases o f trypanosomiasis in Africa, half are found in
the DRC (150,000 to 250,000 cases).
143. Approximately 10 percent o f children are underweight at birth. Malnutrition and
mortality rates among children under age 5 are higher among the poor. Acute
malnutrition has increased among children under 5, rising from 12 percent to 16 percent.
Itaffects 20 percent of children inthe poorest quintile as compared to 8.0 percent inthe
wealthiest quintile. The prevalence o f chronic malnutrition has been largely unchanged
over this period. According to the MICS 2 survey, the rate of breast-feeding is generally
highat 95.0 percent. However, the proportion of children who are exclusively breast-fed
for the first six months o f life i s low: 29.0 percent o f children under age 2 were
exclusively breast-fed until age 4 months, and 24.0 percent until age 6 months.
l3
MICS 2,2001.
39
According to the same estimates, 4.2 million children under age 5 suffer from
malnutrition inthe DRC.
144. An examination of the trend of the health indicators listed above shows that the
country i s exposed to a resurgence o f some epidemics that had formerly been controlled
or eradicated. They pertain primarily to: measles, whooping cough, plague,
poliomyelitis, bacterial dysentery, cholera, and monkey pox. This incomplete list should
be augmented by diseases that have emerged more recently, such as HIV/AIDS and the
hemorrhagic fever associated with the Ebola virus.
145. Alongside these trends, the health sector has weaknesses o f two kinds in: (i) the
availability and use o f quality health services; and (ii) the spatial organization o f
services.
146. Use of health services. According to the Health and Poverty Status Report
(RESP) on the DRC, the average rate of use of health services is approximately 0.15
consultations per personper year.14 Regardingthe use o f hospital services, the number o f
hospital admittances, which was 35 per 1,000 inhabitants inthe 1980s, dropped to 15 per
1,000 inhabitants in2001. In2001, the proportion o f children age 12-23 months who had
received all their vaccinations was only 29 percent (MICS 2). By way o f illustration,
41.0 percent o f children who received the first dose o f DTC vaccine did not receive the
third. Inrespect of maternal and reproductive health, the use of health services showed
the same trend in recent years. The prevalence of contraceptive use was 4.4 percent in
2001 (MICS 2). Only 46.1 percent o f pregnant women received prenatal care from
trained medical personnel. Inthe same year, the proportion o f pregnant women for whom
childbirth was attended by trained medical personnel was 23.7 percent. By way o f
comparison, the proportion o f pregnant women assisted in childbirth by unqualified
personnel (relatives, friends, or without assistance) was close to 40 percent. The
percentage o f mothers excluded for financial reasons ranges from 7 percent to 30
percent, depending on the case.
147. Organization of health services. The health system in the DRC is organized in
the form o f a three-level pyramid, with the levels being: the Health Zone (HZ), the
General Referral Hospital (GRH), and the Health Center (HC). Inthe 1980s, the DRC
was one o f the first countries to undertake reforms based on primary health care
integratedinto HZs. Since 2003, the number o f H Z s has increased from 306 to 515. This
new HZ map poses a number o f problems, in particular: (i) increased needs for the
human and infrastructure resources (General Referral Hospitals and HZ Central Offices,
Health Centers, etc.); (ii) a decline in the functionality o f the Zones resulting from the
new distribution; and (iii) mismatch between the demand for quality health care
the
services andthe proliferation o f nonviable HZs, etc.
148. While they are fragmentary, the available data on human resoures in the health
sector indicate: (i) a reduction in professional quality; (ii) proliferation o f educational
a
and university institutions offering medical training at a cut rate; (iii) a lack o f decent and
motivating working conditions; and (iv) inequitable distribution o f the scarce qualified
personnel, the number o f which is unstable. The share o f the State budget devoted to
healthhas dropped significantly, reaching a proportion o f less than 1percent. A tendency
to withdraw from the sector has been observed on the part of the development partners.
This situation has caused deterioration inthe health system and ledhouseholds to assume
l4Ths rate was measured using a sample representing about 54.0 percent of the country's total population. This
average rate (0.15 consultationsiinhabitanVyear) corresponds to less than one consultation perperson every 6 years.
40
almost the entire financial cost o f health services in the absence o f a well-organized
health insurance system. Since 2002, there has been an increase in the financing o f the
health sector, partially attributable to the financing o f certain projects in the sector
focused on AIDS, malaria, and tuberculosis. However, efforts must still be made to
improve the capacity to absorb the resources mobilized inthe sector.
149. Narrowly focused studies carried out principally in Nord-Kivu (year to be
indicated) have shown that the costs o f health services tend to further impoverish the
people. Indeed, 24.0 percent of patients sold property and 18.0 percent went into debt in
order to cover health care costs. InManiema, a study conducted by one NGO (year to be
indicated) determined that 30.0 percent o f patients sold property and 15 percent went
into debt to cover healthcare costs.
2.3.3.3. Water and sanitation
150. The abundance of water resources inthe DRC stands incontrast to the low level
o f access to drinkingwater. The available statistics show that approximately 22.0 percent
o f the population (12.0 percent in rural areas and 37.0 percent in urban areas) have
access to drinkingwater. This availability i s spread unevenly throughout the country. For
example, in the Banalia Health Zone (Orientale Province), only 3.0 percent o f the
inhabitants have access to drinkingwater. InKindu (Maniema Province), 91.O percent of
the water supply sources for the people are not protected. A survey covering 36 health
areas has shown that in Ituri (Orientale Province), 65.0 percent o f the springs and wells
usedby the people are not protected.
151. The poor access to drinkingwater stems primarily from the inappropriateness of
the existing institutional framework and the inadequacy o f the financial resources
allocated to the sector. The armed conflicts aggravated this already precarious situation
through the destruction o f existing facilities. For example, 18 REGIDESO centers were
looted and completely destroyed during armed conflicts in the eastern part of the
country. Inrural areas, 60 percent of the existing water works are no longer operational
for lack o f maintenance by their users and owing to the ineffectiveness o f the
participatory approach and the network for distributingreplacement parts.
41
152. As regards sanitation, at the level o f the people the situation is basically one o f
households' inability to access an adequate system for the evacuation o f solid and liquid
waste. The surveys conducted in preparing for the general status o f health (1999)
revealed that some 17.0 percent o f households have hygienic latrines and 25.0 percent
properly evacuate household waste. Inaddition, the MICS 2 survey indicates that the
rate o f hygienic evacuation o f waste water was 9.1 percent in2001. The various surveys
conducted and the results o f epidemiological analyses indicate that over 80.0 percent o f
the instances of disease are attributable to poor environmental conditions. Garbage i s
tossed into the streets, natural needs are met innature, youth are not made aware o f the
benefits o f cleanliness, there are no landfills, drainage works are not inuse, waste water
runs along the road, there i s no structured system o f any kind for the removal o f special
waste (biomedical waste, plastics, scrap), and there i s no control o f atmospheric
pollution. This i s a situation attributable to improper management o f sanitation and the
lack o f organization o f the system at the levels o f the public and private sectors alike.
The public agencies responsible for sanitation lack the human, material, and technical
resources required for effective, efficient sanitation close to where people live. Inview o f
the foregoing, the Government has now undertaken to rank sanitation, one of the
determining factors for sustainable development, among the priorities o f the strategy.
2.3.3.4. Urbanpoverty and housing
153. The DRC has an annual housingshortfall estimated at 240,000 units. Congolese villages
are inthe throes of aself-perpetuatingprocess of destruction.The destructionof the physical area
(through erosion) is compounded by that of the environment, resulting fi-om poor town
management associatedwith transportproblems,the poor management of solid and liquidwaste,
andthe various forms ofpollution.
154. There i s uninterruptedgrowth of shanties around the major urban centers on abandoned
land (land subject to erosion, hillsides, areas subject to dirt slides and flooding) in which the
vulnerable population is concentrated. Indeed, based on surveys conducted in 1999, there are
396,620 substandard structures throughout the country, of which 94.6 percent are dangerously
built siuctures and 5.4 percent are buildings erected on sites that are at risk. Should current
trends continue, there will be 5,211,288 such shanties throughout the countryby 2010.
155. According to the survey on 'the perception of poverty, 81.0 percent of households
reported dissatisfaction with their housing. Katanga and the two Kasai provinces have a high
proportion of households dissatisfiedwith housingconditions (88 percent on average), followed
by Equateur, Bandundu, and Bas Congo provinces (71 percent on average). The proportion of
households living inextremely overcrowdedconditions is 76 percent for the country as a whole,
according to the same source. This overcrowding is reflected in grassroots communities by
42
practices referred to as sleeping as "Sulomon" (in the front room) or as "sentinelle" (sleeping
outdoors owingto the lack o f space indoors).
156. The community configurations are characterizedprincipally by the following traits: (i)
land usage is generally on unimproved spaces, with no form of assistance and laclung any
necessaryassociatedinfrastructure; (ii) occurrence of disasters attributable to the use o f sites
the
at risk: floods, sand silting, erosion, and landslides; (iii) insufficiency o f resources for improving
urbanmanagement; (iv) the glaring absence of public or private property improvements; and (v)
the absence of a suitable framework and mechanisms for the construction and maintenance of
basic technical equipment and community infrastructures.
157. The breakdown in living conditions i s associated with the successive wars which struck
inthe easternpart of the DRC inparticular, and with the population migrations which ensued.
Additional factors are the failure to observe existing regulations, the insufficiency o f associated
measures, the inadequacy o f development and territorial improvement policies and programs, the
lack of development policies or programs for rural areas, the ineffectiveness o f education policy
inrural areas, the inadequacyof specific policies andprograms ontheuse of open space, andthe
absence o fpolicies for the managementandtreatment o fwaste.
158. Thus, only 9 cities have water distribution networks that are in proper operating
condition and only 13 cities have ahaphazardly functional electricity grid.
2.3.3.5. Social protection
159. The DRC does not, at this writing, have a clear national policy in the area o f social
protection. The activities targeting vulnerable groups are carried out by various stakeholders (the
State, nongovernmental organizations, churches, grassroots communities, and associations of
vulnerable groups). They are deployed ina framework not characterizedby concerted agreement
and cover only a very small proportion o f the vulnerable population, above all inurban areas.
160. The shortcomings of the social protection system in the DRC are illustrated inparticular
by: (i) extreme fragility of vulnerable persons in respect of various risks; (ii) access to
the poor
basic social services, especially on the part o f elderly persons who represent 3 percent of the
population; (iii) ever greater number o f children in difficulty, among which there are nearly
an
40,000 street children; 10.7 percent o f all children are orphans (and 34 percent o f these are
orphaned by AIDS); 2 percent o f children are living with some form of disability; 15,000
childrenhavebeenconscripted into various armed forces before the age of IS; and 26 percent of
girls are adolescent mothers; and (iv) there is a large number of victims o f sexual violence who
havenot been attendedto."
l5
The report on the incidence of sexual violence (UNFPA, 2005) records that, duringthe period from January to July
2005, there were 3,810 cases of sexual violence recorded in eight provinces.
43
161. There are a number of factors at different levels which explain the weakness and
inefficiency of the social protection system in the DRC. These include in particular: (i) low
the
share of the State budget allocated to social protection; (ii) limited capacities of the social
the
assistance structures; (iii)
limited involvementof families and grassrootscommunitiesinthe care
of vulnerable persons; (iv) the absence of social safety nets for the vulnerable; and (v) the
ineffectiveness of the general and special social security systems in force, in particular the
nonoperationalstatus ofthe socialsecurity systems inplace.
2.3.3.6. Gender
162. The sociopolitical situation prevailing in the DRC in recent decades has had a
negative impact on gender concerns. It i s at the root o f family dislocations and o f the
precarious situation in which Congolese women live at all levels. There has been a
drastic shift inthe role o f women: they are heads of household inmany families owing to
the death o f their spouse from armed conflict or HIV/AIDS, forced to enlist in combat
militias, serve as comfort women for soldiers, or engage in prostitution. There has also
been a loss in terms o f agricultural productivity, as women constitute 52 percent o f the
labor force inagriculture and account for 75 percent o f food production.
163. Today in the DRC, unstructured employment occupies a great majority of
women, who are engaging in survival activities in order to counter the rise o f poverty
owing to the low level o f wages paid in formal employment dominated and the lack o f
monetary resources ingeneral.
164. The conclusions of the participatory consultations further indicate that the rights
o f women are violated; there is discrimination in every area o f life: rights, education,
health, access to resources, etc. In terms o f the inequality o f access to education for
women as against men, there are early dropouts among girls owing to pregnancies, early
marriages, and certain traditions which prompt parents to disregard the education of
girls.
165. The situation o f women's economic dependence on their husbands' income i s at
the root o f the violence directed toward them. Physical abuse and spousal sexual
violence are commonplace. Sexual violence has contributed to the propagation o f the
HIV/AIDS pandemic inthe conflict zones. Such violence has continued even inthe post-
conflict period throughout the country.
44
166. Women are still in a minority within the State institutions and structures,
including in: the Government, the Parliament, public and private administration, the
trade unions, cooperatives, professional organizations, and the grassroots communities.
Indeed, the Biographical Guide to women supervisors and leaders produced by the
MASFand UNICEF in2002 shows that the rate ofrepresentation of women inpositions
o f power, estimated at 10 percent for the country as a whole, is only 5 percent in
comparisonwith male representation for the city o f Kinshasa.
2.3.4. HIV/AIDS
167. The HIVIAIDSepidemic in the DRC i s infull swing, with aprevalence rate estimated at
4.5 percent (PNLS, 2004). The number of infected persons was 2.6 million in2004, as compared
to about 700,000 in 1995. Of these, about 780,000 were in the advanced stage of the disease.
This number represents an increase by a factor of 3 in 10 years in the estimated number of HIV
positive individuals as of 1995, which in absolute terms predicts a worsening of the situation.
The number of deaths (children and adults) is verging on 110,000, for an average of 305 deaths a
day. One result is that the number of children orphanedby AIDS is currently estimated at about
700,000 countrywide.
168. Prevalence inthe 14-19 year old age bracket is of great concern: the rate is 3.6 percent
or two percentage points above the WHO norm(1.6 percent). According to that agency, this may
leadto an exponentialpropagationof the epidemicinthat age bracket, and even inthe population
as awhole.
169. According to the PNLS (2002), the estimated percentage o f males in the 20-29
age bracket (the one most affected) who are infected with the virus i s 8 percent, while
that for women inthe same bracket is 14 percent. The epidemic i s increasingly affecting
women and youths. The surveys conducted in the areas not affected by the armed
conflicts (2003) and in the eastern part of the country affected by the conflicts (2004)
show seroprevalence rates of 4.1 percent and 4.7 percent, respectively. The disease
affects every age group, and women more than men. Mother-to-child transmission o f the
disease is on the rise, accounting for 8 percent o f cases.
Box 11. Perception of vulnerability associated with HIV/AIDS
In Mbattta Ngztnp, personv living with HIIYAIIX rkink that the inobiliiy to work, thepqrhological
stigma, and their rejection by sociery makes thent even more vulnerable [Bas-Congo].
Source: APP Report,2005.
I
170. Persons suffering from AIDS must often deal with health and funeral expenses
even as they sustain income losses owing to their loss o f work (stigmatization), inability
to work, or treatment costs (US$360 a year). In order to overcome these problems,
affected households are obliged to sell their tangible assets (livestock and agricultural
45
equipment, furniture, and means o f transport) because there i s no adequate policy for
covering the costs o f care.
171. The lack of income forces girls and women into prostitution in order to survive;
they thus constitute one o f the groups most vulnerable to HIV/AIDS. The monetary
poverty experienced by the affected households forces them to spend progressively less
on health and to devote 85 percent o f their income to food. Consequently, 61 percent o f
these households turn to traditional healers and sometimes to self-medication, thus
makingit difficult to identify and monitor those affected.
172. The surveys show that, in large measure, the population i s rather well informed about
STIs and HIV/AIDS (over 95 percent). However, knowledge about the various means of
HIV/AIDS prevention and transmission remains low among the people. In fact, while the
majority has heardabout and knows the lethal consequences of the disease, genuine knowledge
about transmissionmechanisms and prevention is uneven. Such knowledge is more widespread
among the more educated women (15.0 percent) than among those who have no education (7.0
percent). Women from urban areas (13.0 percent) are better informed, through information and
prevention campaigns, than are women from rural areas (9.0 percent). This low level of
education explains the persistence of unfavorable cultural practices and taboos which have an
influence on HIViAIDS transmission, such as levirate marriage, sororate marriage, polygamy,
loss of inheritance,etc.
173. The insufficient sense of ownership of the fight against HIV/AIDS by specific high-risk
groups (sex workers, youths, men in uniform, truck drivers, airmen and artisanal miners of
precioussubstances, displacedpersons, etc.) limits the measuresto preventHIVtransmission.
174. HIViAIDS now constitutes an extremely serious threat to economic development.
Indeed, it spares no age group, including nursing infants. It attacks men and especiallywomen,
one of the major production factors in an economy largely driven by the primary sector. It thus
constitutes an impediment to national development. Up to the age of 39, the number of AIDS
cases is higher among women than among men.The low compensation level in conjunction with
the inefficiency of the social security system tends to increase considerably the expenses
associatedwith caring for PersonsLiving with HIV/AIDS (PLWHAs). With annualincomesjust
shy of US$lOO a year per capita, the annual cost of anti-retroviral (ARV) treatment of US$360
per person represents a burden, putting care out of the reach of the majority of affected
householdsandthe family solidarity network.
175. The situationdescribedabove has had hannfuleffects on the levelsofprevention o f HIV
and STI transmissionat the community level, on improving the quality of life of persons living
with HIV, on attenuating the socioeconomic impact of HIV, and on strengthening the
coordinationandmonitoring/evaluationcapacityat all levels.
2.3.5. Community-leveldynamics
176. The 40 years o f conflict and poor governance, together with the glaring absence
of decentralized State structures, have created a void that grassroots organizations have
filled in order to promote income-generating activities, support the financing o f
education, and create health associations and solidarity groups. However, the lack o f
State support for this dynamic has resulted in: (i) the low level o f participation o f
community-level organizations in planning and decision-making; (ii)the absence o f
promotion and legal recognition o f community development organizations; (iii) the low
level o f intervention capacity o f community development organizations; and (iv) limited
capacity to support the initiatives o f grassroots communities, particularly those o f
women and youths.
46
177. The low productivity o f community-driven activities i s associated with the poor
organization o f supplying inputs and productive equipment, the poor dissemination o f
improved techniques, formulas, and modem production standards, the lack o f
participatory actiodresearch and dissemination o f local know-how, the poor access to
the savings and loan system; the inadequate training o f leaders in project management,
the limited income and purchasing power levels, and the lack o f investment in basic
infrastructure and services.
47
Chapter 3: Poverty ReductionStrategy
48
178. This poverty reduction strategy reflects the threefold logic o f emerging from conflict, a
26/25 vision o f medium- and long-term development, and the socioeconomic reconstruction of the
country.
179. This strategy i s aimed principally at restoring peace and security both at home and
outside the national borders and re-establishing the rule o f law, on the one hand, and at
revitalizing and consolidating the economy on a sound basis, taking into account the Millennium
DevelopmentGoals (MDGs) and the Government Economic Program (PEG), on the other hand.
1. VISION AND OBJECTIVES
180. The conclusions o f the participatory consultations identified, in addition to the
unavoidable efforts to achieve national reconciliation, peace, and security and to restore the rule
o f law, the need to meet the conditions for promoting good governance and combating poverty.
They also indicatedthe value of accompanyingthese actions by focusing on combating the factors
behind poverty as a prerequisite to bringing the cycles of violence that have characterized the
recent history of the country to a definitive end.
181. The development and implementation o f the Poverty Reduction Strategy will depend on
carrying out priority programs and projects which, inconjunction with the medium- andlong-term
development vision, will make it possible to base the future o f the DRC on the following cardinal
values and fundamental orientations:
A Democratic Republic of the Congo that is at peace with itself under a restored rule
o f law;
A subregional context that is peacefulandconducive to economic integration;
Poverty that is inthe process o fbeing eradicated;
Consolidatednational unity and territorial integrity;
A people with access to the essential basic social services: education, health, hygiene
and sanitation, and safe drinkingwater;
Youth benefiting from a highlevel o f quality education and with access to jobs;
A dynamic, diversified, andmodemagricultural sector;
An industrialized economy that is competitive and fully integrated into the dynamics
o f regional and global trade;
Populationgrowth that is under control;
Institutions predicated on transparent and decentralized management o f powers and
resources.
182. The ultimate goal being pursued by the Government under this strategy i s sustainable
and effective improvement over a three-year span inthe living conditions o f the people for a 25-
year generation (the 26/25 Vision), by targeting the main causes o f poverty as identified in the
diagnosis. The table which follows shows the main quantitative objectives o f that strategy, and the
action priorities resulting from them have been accorded priority in the budget choices and
resource allocations set forth inthe MTEF.
49
Table 4. Quantitative poverty reduction objectives (expressed as percentages unless otherwise indicated)
Curretit 2006 2007 2008
Real GDP mowthrate 6.5 7 7.7 8.4
End-of-perrod inflation rate (CPI) 21.3 8 6 6
Infant-child mortality rate 1/ 126 111 104 89
Maternal mortality rate 21 1,289 1,276.2 1,079.1 944.2
Gross primary school enrollment ratio 64 64.1 70.8 80
Rate o fHIV/AIDS prevalence 4.5 <4.5 c4.5 <4.5
Rate o f access to safe drinkingwater 22 22 24 26.9
Rate o f access to sanitation 3/ 9 9 11.5 15
m:Standing
Incidence o fpoverty 70.68 <70 <70 <70
Committee on the Macroeconomic Framework (CPCM).
I/Mortalityrateofchildrenunderage5per1,000livebirths.
2/ Maternalmortality rateper 100,000live births.
3/ Includes access by the people to satisfactory living conditions.
183. To achieve these objectives, the Government undertakes to pursue a strategy based on
five major pillars, each of which has a clear focus and action plan that will be adjusted inlight o f
changes in the environment, the availability o f resources, and the progress made with
implementation. These are:
Pillar 1:Promotegood governance and consolidate peace (through strengthenedinstitutions);
Pillar 2: Consolidatemacroeconomicstability and growth;
Pillar 3: Improveaccess to socialservices andreduce vulnerability;
-~ and
Pillar 4: CombatHIV/AIDS;
-~ (dynarniguecommunautaire).
Pillar 5: Promotelocal initiatives
184. The choice of these pillars bears witness to the Government's resolve to develop a
poverty reduction strategy that i s both ambitious and realistic inthe medium term, and consistent
with the MillenniumDevelopment Goals.
50
111. PILLARS OF THE STRATEGY
Pillar 1. Promote good governance and consolidate peace through
strengthened institutions
185. To address the urgent need to establish a climate o f good governance, the Government
undertakes to carry out a program known as the National Program to Improve Governance
(PNAG), the primary aim o f which will be to provide the DRC with institutions which function in
pursuitof the general interest for sustainable development. This program will tangibly reflect the
implementation o f this pillar and will be built around three main axes, namely: (i) the promotion
o f administrative, political, and economic good governance; (ii) the consolidation o f peace and
security; and (iii)improvement o f the statistical system.
I.I. Promotinggood governance
186. Over the past thirty years the management o f public affairs inthe DRC has suffered from
deep-seated dysfunctions that have nearly paralyzed the State structure. In the context of this
poverty reduction strategy, the Government intends to base an aggressive policy on management
o f the commonweal in administrative, political, and economic terms on the observance of a
restored rule of law. The conclusions of the participatory consultations highlighted this need to
promote governance inthese areas.
1.1.1. Administrative governance
1.1.1.1.Publicadministrationreform
187. The Government recognizes that a comprehensive reform o f public administration i s
necessary in order to improve its quality and the capacity o f ministries and public agencies to
provide services with a view to enhancing their efficiency and performance. There i s a twofold
objective pursued in the context o f the strategy: controlling the wage bill and staffing levels, and
gradually improvingthe quality o f the services rendered by public administration.
188. To achieve this strategy, the Government plans to: (i) complete the ongoing census o f
the civil service and the army; (ii) finalize the retirement program; (E)implement the Simplified
Transitional Procedure (PTS); and (iv) streamline positions, staffing, and jobs in public
administration by defining a new and more appropriate organic framework.
189. Based on the recommendations of the audit on the management procedures for the
State's personnel expenditure, it has been decided to implement a Simplified Transitional
Procedure (PTS) in the short term and, in the medium and long terms, introduce an Integrated
51
Financial and Administrative Management System (SIG) aimed at controlling budgeted staffing
levels and controlling the wage bill.
190. The PTS will make it possible to build on the census, incorporating its results as they
become available, and to contribute to the retirement program by taking account of and providing
security for the staff groups deemed redundant.
191. The SIG will be introducedto: (i) and update the data gathered duringthe census;
secure
(ii) thePTSdatabasewiththecensusdata;and(iii)
merge improve the management o f the civil
service.
1.1.1.2. Reformof the judicial system
192. The Government will rehabilitate the justice system primarily through the publication by
end-2006 o f the final version o f the action plan for strengthening thejustice system.
193. Accordingly, the Government undertakes to take the following actions: (i) implement a
sectoral policy on justice and the priority actions in the judicial area; (ii) continue the
establishment of commercial tribunals inKinshasa and Lubumbashi; (iii) finalize the DRC's entry
into OHADA; and (iv) organize the official signing ceremony for the act launching the mixed
committee for monitoring thejustice framework program and establishing its secretariat.
1.1.1.3. The fight against corruption
194. In order to halt the rampant corruption prevailing in the DRC, the Government will
pursue a strategy built around the following points: (i) strengtheningo f the independence
effective
o f the justice system; (ii)reforms o f the laws and regulations on tax and customs benefits or
incentives to promote their simplification, transparency, and systematization in order to eradicate
corruption; (iii)the introduction o f incentive mechanisms conducive to combating corruption,
with emphasis on those which reward the integrity and improve the working conditions o f public
employees while making them subject to controls and penalties; (iv) definition o f a private sector
development policy and promotion o f an environment favorable to the private sector;
(v) continuing tax reforms promoting growth and equity, including information and education
mechanisms familiarizing taxpayers with their rights and duties inthe tax area, to ensure that the
tax system i s perceived as a neutral and effective tool for income redistribution and equitable
development; (vi) strengthening of the audit and control mechanisms applicable to State revenue
and expenditure; (vii) the reform of public procurement; and (viii) periodic review o f public
expenditure (PER), etc.
52
195. The Government will take the following actions: (i) conduct a public information
campaign on the anticorruption law and the code o f good conduct for State employees;
(ii)continue the audits begun in the public enterprises and financial administrations in Kinshasa
and in the provinces; (iii) speed up the reform o f the judicial system to ensure that justice i s
genuinely independent; (iv) adhere to the timetable for the reform o f public procurement;
(v) create a financial intelligence unit (FIU) on money laundering; (vi) combat fraud at the
borders by simplifying procedures and strengthening controls in order to reduce undervaluation;
(vii) improve transparency in the forestry and mining sectors; and (viii) complete the drafting of
the future public procurement code and the evaluation of professional capacities in the
procurement sector.
1.1.1.4. Combatingmoney laundering
196. Inimplementationofthe law to combat money launderingandthe financing ofterrorism
and in order to take specific action against these phenomena, the Government undertakes to
establish the National Financial Intelligence Unit, known by its French acronym CENAREF. A
draft decree establishing this unit has already been prepared and will be submittedto the Council
o f Ministers for adoption.
1.1.1.5. Humanand institutionalcapacity-building
197. Successful implementation o f the PRGSP will require building the capacity for
managing public affairs at all levels: macroeconomic, sectoral, and decentralized. This also
encompasses administrative capacities and the capacities of the grassroots communities, civil
society, and local NGOs so that the various stakeholders and beneficiaries can participate and
contribute effectively to the implementation, management, and monitoring o f development
activities inthe DRC.
198. The crisis has had a devastating impact on human resources in the country. The DRC
lost a sizable number o f skilled individuals, who may have been killed duringthe violence, left the
country out o f fear for their physical safety, or simplify have fled the poverty and lack o f future
prospects that characterized the country.
53
199. The Government will endeavor to train and enhance the human resources already in
place, but also to motivate, incentivize, and retain the personnel thus trained, including by
adjusting wages upward in both the public and private sectors. Such increases in wages could
have a beneficial impact by promoting the return o f skilled persons who became expatriates for
economic reasons. It will be necessary to develop a culture o f excellence, in particular by
ensuring that promotions are based on competence and individual merit. The draft law on the use
o f national expertise will be adopted, and implementing measures will be issued to promote the
contribution made by Congolese nationals to developmentprograms.
200. Similarly, the institutional capacities o f the various structures need to be strengthened as
well. All the institutions involvedinthe economic management o f the country needto buildtheir
capacities. The planning and management tools, as well as the databases, must be improved.
Operating procedures and systems should be improved and adapted to new situations, making use
o f new information and communications technologies to this end.
1.1.2. Political governance
201. In September 2004, a seminar on decentralization in the DRC was organized by the
Political, Administrative, and Legal Committee of the National Assembly inpartnership with the
World Bank, in the context o f which the following objectives were set for the decentralization
process: (i) enabling the people to participate in public life and in the design o f development
policies inthe areas o f concern to them; (ii) relieving the Central Government o f implementation
tasks, enabling it to focus on the definition o f major orientations; (iii) bringing administration
closer to those being administered; and (iv) simplifying administrative procedures and promoting
a culture o f inclusive participation in order to strengthen the development o f the decentralized
administrative entities (EADs).
202. To this end, the Government will grant some resources to the provinces so that they can
devise their own development programs, inparticular inthe social areas (education, health, water
supply and sanitation, and housing), basic infrastructure, etc. Inthis connection, the Government
has begun to prepare provincialPRGSPs to support local development.
203. The capacities o f grassroots communities to implement the provincial strategies will be
strengthened by: (i) the introduction o f viable mechanisms for planning and control by and for the
people; (ii) the promotion o f local leadership; and (iii) enhanced accountability through training
and information. The participatory approach will strengthen the role that must be played by civil
society organizations, localNGOs, and religious groups, namely to assist the people inidentifying
their own needs and selecting appropriate solutions.
204. This way o f approaching development will increase the people's sense o f ownership at
the grassroots level o f the projects undertaken in their favor. To this end, the emergence o f
Neighborhood Development Associations (ADQs) or Village Development Associations
(ADVs) as genuine focal points for local initiatives will be encouraged. In addition, the
institutional capacities o f the Provincial Poverty Reduction Committees (CPLPs) and Territorial
Poverty Reduction Committees (CTLPs) will be strengthened. All these initiatives will serve as
anchors for the decentralizationpolicy.
205. Strengthen the role of women in development. The participation o f women in the
development process as regarded as a decisive factor in all poverty reduction and development
strategies. Economic recovery cannot occur without clearly taking the gender dimension into
account in order to guarantee their full participation. Indeed, women constitute more than
52 percent o fthe active labor force.
54
206. The objectives pursued are aimed at: (i) promoting improved living conditions for
women; (ii) ensuringthat women are treated equally with men interms o f access to educationand
production factors; and (iii) applying the legal and regulatory provisions adopted by the new
Constitution and the new Labor Code to enhance the personal, moral, and material well-being o f
women.
207. More specifically, the Government will: (i) measures to ensure equal access to
take
education on the part of girls and boys; (ii) provide on the job training to women with jobs;
(iii) facilitate access to credit and production factors; (iv) improve maternal and child health;
(v) promote the sociopolitical inclusion of women throughtheir participation inlocaldevelopment
institutions; and (vi) protect women against violence o f any kind within the family and in society
generally. Specific and targeted measures will be taken for women suffering from the harmful
misdeeds associated with the armed conflicts (rapes, forcible conscription into militias, and
prostitution). Moreover, the Government will take measures to promote a culture o f equality and
respect for gender inthe press, at school, and inthe world of work.
1.1.3. Economic governance16
208. To improve the steering o f the economy and introduce a unified framework for the
preparation and discussion o f macroeconomic projections, the Government will formalize,
through the signature of an interministerial order by the Ministries of Planning, o f Budget, and of
Finance and Economy, the Standing Committee on the Macroeconomic Framework
(CPCM) reporting directly to the Minister o f Planning.17 The Standing Committee on the
Macroeconomic Framework will be responsible for preparing the macroeconomic framework
serving as the basis for devising and preparingpublic budgets and economic and social programs,
as well as for the Poverty and Social Impact Analysis (PSIA) o f economic policies. In addition,
the establishment o f this structure should make it possible, on the one hand, to facilitate the
circulation o f the statistical information needed for the macroeconomic framework exercises and,
on the other hand, internalize the Forecasting and Simulation Instrument (IPS) developed by the
Macroeconomic Research Directorate (DEME) of the Ministry of Planning with support from the
APNTJRC project o f the UNDP. The structure will be made up o f all the structures concerned by
the macroeconomic framework effort.
1.1.3.1. Continuedpublicfinance reforms
209. The Government undertakes to continue the public finance reforms initiated in 2002
under the Government Economic Program (PEG) with a view to: (i) improving revenue
mobilization capacities through the modernization o f tax instruments and tax administrations;
(ii) improving the quality and composition o f expenditure; (iii) strengthening the management o f
the wage bill and the civil service; and (iv) enhancing the transparency o f State operations.
A. Revenuemobilization
A.l. Customs and Excise Office(OFIDA)
210. The principal measuresto be taken to modernize customs administrationare:
Establishmentof a ceiling onthe quantity ofpetroleumproductseligible for exemption;
The measures listed represent the Government's commitment through 2006. As the PRGSP is a dynamic document, later
measures will be integratedas the Government Economic Program is implemented.
The CPCM has been producing most macroeconomic projections since May 2005, and thus is operational. An interministerial
decree has been drafted and signed by the Minister o f Planning, and is before the Ministers o f the Budget, Finance, and Economy
for signature.
55
.... Transformation of OFIDA into a Directorate-Generalof Customs under the Ministry of
Finance;
Computerizationof the Kinshasa-Est customs office;
Increase in the excise tax on petroleum products by CGF 10 per quarter and reduction in
petroleumproduct exemptions;
Maintenance of the nominal value of the excises on petroleum products (after the CGF 10
increasementionedabove);
Increasesinselectedexcise taxes inorder to boostrevenue;
.. Application of the customs code and increase in the share of imports subject to preshpment
inspection;
'' Creationof acomputerizedoffice inKasumbalesa;
Completion of the constructionand outfitting ofthe Kasumbalesacustomspost;
Strengtheningof the customs posts on the eastern borders of the country by introducing one-
' stop shops;
Adoption and applicationof the revisedcustomsprocedures manual for one-stop shops;
Gradual alignment of the reference prices (PMFs) with world market prices in order to
increasethe revenue from the excise taxes onpetroleumproducts; and
Application of the presidential decree making OFIDA the sole collector of duties and taxes at
the one-stop shops createdat customsposts.
A.2. Directorate-General of Taxes @GI)
211. The Government will take the following measures: (i) generalization o f the use o f the
taxpayer number and updating o f the taxpayer file; (ii) introduction o f the VAT; (iii) full
collection o f the turnover tax and the other taxes on telecommunications; (iv) initiation o f the
work to introduce the single identification code for all DGI taxpayers; (v)prohibition o f
discretionary exemptions; (vi) DGI implementation o f the technical assistance recommendations
on tax administration and a collection plan in order to reduce tax arrears by at least CGF [101
billion; (vii) implementation o f the contract on preshipment inspection o f imported goods
concluded with the BIVAC; and (viii) strengthened tax administration through the opening, in a
first phase, of three new tax centers (CDIs) in Matadi, Lubumbashi, and Goma, with a view to
improving the tax management o f SMEs. The CDIs o f the other provinces will gradually be
56
opened and accompanied by Comprehensive Tax Centers (CISs) in order to improve the revenue
collections o fthe Government.
A.3. Directorate-Generalof Administrative and GovernmentPropertyRevenue @GRAD)
212. The following actions are contemplated: (i) completion o f the establishment of the
DGRAD; (ii) organization o f the awareness-building campaign on good tax citizenship to
coincide with the anti-fraud campaign throughout the country; (iii) strengthening the role o f the
DGRAD in the collection of nontax revenue, ensuring that all the interministerial orders
transferring responsibility for the collection o f duties and taxes for the Treasury are effectively
applied; (iv) revision o f the previously earmarked revenue allocations of the former BPOs and
other collection entities to include among expenditure only the transfers negotiated with the units
concerned on the basis o f their forecast budgets; (v) improved identification o f the duties and
taxes collected by the DGRAD; (v)transfer back to the EADs of 40 percent o f the area tax
collected duringthe 2003 exercise; and (vi) launch of the forest zoning process and completion o f
the prior consultations with adjacent localities.
213. In addition, the Government undertakes to re-evaluate the system for transfers back to
the financial administrations. In order to reduce discretionary incentives, the Government will:
(i) therecommendationssetforthinthestudyonstreamliningexemptions; (ii) an
adopt finalize
audit report by the Inspectorate-General o f Finance and the Audit Office on the exemptions
granted under the investment code through end-2004; and (iii) review the agreements signed with
MIBA and SENGAMINES (cessation of activities) and strengthen the administrative controls for
limitingcustoms and tax exemptions to those providedby law, with the elimination of unjustified
exemptions.
B. Budgetexecutionand transparency
214. The Government will continue the reform o f public expenditure through: (i) improved
control o f expenditure management by strengthening the expenditure chain; and (ii) greater
transparency and trackability o f operations through the introduction o f a double-entry government
accounting system.
57
215. The Government will pursue the following objectives in the area of budget execution
and monitoring: (i) increasing pro-poor expenditure, in particular the operating appropriations o f
the Ministries o f Educationand Health, while reducing the nonpriority expenditures o f institutions
and ministries; (ii) accelerating and improving the capacity to implement projects financed by
HIPC resources; (iii) support from externalpartners, completing the censusesinall provinces
with
and military regions; (iv) validating and publishingthe results (starting with the provinces already
completed), and applying them to the payroll as soon as available; (v) improvingthe execution o f
capital expenditure; (vi) implementing a new, simplified payroll system; and (vii) strengthening
the capacity to implement poverty reductionprojects.
216. Inthiscontext, the followingmeasuresarerecommended:
Monthly reconciliation of the gap betweenTOFE data and the monetary statistics, withm 20
days;
Monthly submissionto the Government of the executionof the cash flow planby function
andby administration, as well as the projectedplan for the following month;
Grantingno increase incivil service compensationinthe form of increasedbonusesuntilthe
census hasbeencompletedand applied;
No recruitment will be carried out (and no personnel ID number assigned) until the civil
servicecensus hasbeencompletedandthe results applied;
Clarification of the automatic debiting of Treasury accounts betweenthe Ministry of Finance
and the BCC, and strengthened management of the General Treasury Account and its
subaccountswith the BCC by the Treasury;
In 2006, maintenance of the centralized payments expenditure for fuel at the level of the
2005 program, while increasing budget appropriations for water, electricity, and
telecommunications;
Application ofpublic biddingprocedures for fuel purchases;
Report on the streamlining of the number of parties eligible for water and electricity
allowances;
Limitation of the wage bill to 4.7 percent of GDP (or CGF 180 billion) by granting no
increase inwages andbenefits in2006;
Strengthen the management of the military payroll, with assistance of experts from the
development partners;
Comply with budget appropriationsin accordance with the rolling expenditurecommitment
planfor eachministry;
Monthly review of the expenditureconlmitmentplanto ensure that expenditureis consistent
with the anticipatedlevel of Staterevenue and the monetaryprogrammingobjectives;
58
Limitation of recourse to budget advances and application of the related procedures, in
particular the rule on granting new advances only if the use of amounts previously
transferredhasbeendocumented;
Observance of the budgetary ceilings on the expenditures of military and political
institutions;
Submissionto the Council ofMinisters, at the endof eachmonthbeginninginApril 2006, of
areport on travel costs and related expenditureand on the use of the budgetary advances of
eachministry during the precedingmonth;
Completion by September 2006 of a financial audit of the expenditure financed by the
savings generatedby the HIPC Initiative in2003-2005 and deposited to a subaccount at the
BCC; and
Submissionto the National Assembly, within 30 days following the endof eachquarter, of a
quarterlyreportonbudgetexecution.
1.1.3.2. Continuedpublic procurementreforms
217. The objectives sought in the context o f the public procurement reform are to: (i) combat
corruption and the lack o f transparency inthe management o f public procurement; and (ii) put an
end to the withholding o f information andrecourse to single-sourcingby intentionally breaking up
contracts and undervaluing when providingcontract estimates.
218. The new public procurement code i s based on the following pillars: (i) modernization o f
the legal framework and contract award procedures, using standard international tools;
(ii)buildingstaff skills alongside a high-performance private sector; and (iii) transparency based
on internal and externalaudits as well as measures to combat corruption.
219. To enable private enterprises to be competitive and gain access to opportunities for
contract awards, the Government plans to build enterprise capacities by: (i) improving access to
information on contract opportunities; and (ii) training enterprises inthe technique and procedures
o f successful contract bidding.
1.1.4. Improve the quality of statistics
220. To support the developmentplanningprocess and decision-making, it is essential to have
quality statistics. To that end, the Government will strengthen the institutional capacities o f the
statistical system. For this reason, the DRC joined the General Data Dissemination System
(GDDS) ofthe IMFinApril 2004.
221. The Government undertakes to devise and implement a National Strategy for the
Development of Statistics (NSDS) inpartnership with the IMF, the World Bank, the AfDB, and
the PARIS21 Consortium, and on the basis o f the scheduled audits (UNECA primarily) and
clearly identifiedpriorities.
222. Pending the outcome of this strategy, the following short-term actions should be
continued: (i) strengthening o f the human, material, and financial resources o f the national
59
statistical system (NSS), especially those NSS components that must produce the indicators
needed for monitoring and evaluating the PRGSP. In this context, the I N S should receive
particular attention; (ii)creation within the Ministry o f Planning o f a structure for centralizing,
storing, analyzing, and disseminating information on the monitoring o f the PRGSP;
(iii)participation in the Economic and Statistical Observatory for Sub-Saharan Africa
(AFRISTAT), which can provide the NSS with a portion of the methodological and technical
assistance it requires; (iv) continued cooperationwith the development partners, who are uniquely
able to finance the massive statistical operations from which results are necessary in order to
produce the essential indicators for monitoring poverty reduction policies; and (v) strengthened
supervision o f financial institutions in order to prevent any systemic risk o f illiquidity and
insolvency.
223. Institutional aspects. Significant work is envisaged with a view to improving the
institutional aspects o f the agencies generating statistics, in particular for buttressing the
coordination between the producers and users o f statistics. To this end, the Government should:
(i) andadoptaStatisticsLaw, definingthestructureoftheNationalStatisticalSystem
devise
(NSS) as well as the respective rights and obligations o f the agencies o f the NSS and the suppliers
o f statistical data; and (ii) create a High Council on Statistics (CSS) with responsibility for
organizing concertation between producers and users o f statistics and improving the coordination
o f the various producer bodies in order to ensure statistical production that i s more efficient, free
o f redundancies, and adapted to requirements.
224. Inorder to provide qualitative and quantitative information onpoverty for each entity, a
number o f actions o f national scope are envisaged inthe demographic, economic, social, sanitary,
environmental, and ecological areas: (i) preparation o f the second population census (the first
dates from 1984); (ii) o f the General Census o f Population and Housing (RGPH) every
conduct
ten years; (iii) conduct o f regular surveys such as the Demographic and Health Survey (EDS),
MICS survey, and 1-2-3 survey; and (iv) conduct o f an agricultural census.
225. Coordination among the data producer and user structures (INS, DEME, BCC, IRES,
Poverty Observatory) will be at the core of the strategy for implementation, monitoring, and
impact analysis not only o f the PRGSP, but also of the MDGs, and Vision 26/25.
1.2. Consolidate peace and security
226. The implementation of the poverty reduction strategy calls for stabilization o f the
political, economic, and social environment, absent which any development effort would be in
vain. In this spirit, the Transitional Government has set the following priority objectives:
(i) reunification o f the country and territorial administration; (ii) demobilization and
the
reintegration of the army, police, and security services; and (iii)the reintegration and reinsertion
o f persons displaced within and outside the country, and the conduct o f free, transparent, and
democratic elections.
227. Despite the progress made inthe transition process, the sociopolitical situation remains
fragile because of the acuteness of the social crisis and the persistence o f tensions inthe eastern
part o f the country. Efforts need to be continued to speed up the reunification o f the army and the
police with the support o f the international community. Similarly, the disarmament o f the foreign
armed groups and militias operating in the eastern part o f the country must be continued in a
sustained manner inorder to secure that part of the country.
60
1.2.1. Demobilization,Disarmament, andReintegration
228. The Government has prepared, with the cooperation o f development partners, the
National Program for the Disarmament, Demobilization, and Reintegration of ex-combatants
(PNDDR). The Program i s aimed principally at: (i) reducing the risks o f participation by ex-
combatants in armed actions, by facilitating their socioeconomic reintegration into the host
community and ensuringtheir recovery o f lost resources; (ii) reincorporating ex-combatants into
viable economic activities and satisfactory social conditions, in a context o f conflict prevention;
and (iii) contributing to national development through job creation and the poverty reduction
strategy.
229. The persons targeted to benefit from reintegration support are the demobilized adult ex-
combatants, child soldiers, female ex-combatants, andhandicappedex-combatants.
230. Adult ex-combatants. The actions listed below have been included in the PNDDR:
(i)awareness campaigns among those eligible for demobilization or integration, and in the
communities that will be hostingthem, and among the authorities who are to carry out supervisory
responsibilities for the process; (ii) regrouping; (iii) disarmament; and (iv) transfer to the
orientation centers with a view to demobilization and reintegration, or with a view to integration
(sent to reassignment centers). To carry out these actions successfully, the Government intends to:
(i)strengthen the capacities o f the Military Integration Structure (SMI) and ensure close
collaboration with CONADER; (ii) periodically appraise the results o f reintegration; (iii) exert
pressure on those who refuse to submit to the census or to turn in their weapons; (iv) move the
orientation centers and reassignment closer together, and limit their operation to approximately
two months; (v) increase the presence o f the SMIinthe orientation centers; (vi) broadenthe range
of supervisory structures, to include localNGOsinparticular; (vii) sharply increase the number of
heavily labor-intensive projects inall areas; and, finally, (viii) neutralize the negative forces.
231. Reinsertion of former child soldiers. The program will basically aim at providing
assistance, including: community welcome preparation by the cooperation bodies, direct support
to families, direct support to child soldiers without families, education, vocational training, youth
activities (including job opportunities), health care, psychosocial support services, and HIV/AIDS
prevention services.
232. Reintegration of female ex-combatants. The program offers them the same I
opportunities for equitable economic reintegration as are received by their male counterparts.
Special attention i s devoted to their specific needs o f women and to their security and social
integration. To this end, the PNDDR calls for the following actions: (i) the provision of
information to female ex combatants on their rights during reintegration, with insistence on the
fact that these rights are in every respect comparable to those o f their male counterparts;
(ii)awareness campaign inthe host communities on the dynamics of economic reintegration and
safeguarding the benefits from reinsertion allocated to them; (iii) conduct o f support activities and
participation o f female ex-combatants through their grouping in associations; and (iv) care o f ex-
combatants in the maternal and infantile health care program as well as the program to prevent
and combat STIs andthe HIV/AIDSpandemic.
61
1.2.2. Integrationand administration of the Army andthe Police
233. The creation o f a republican army and police force that are reunified and devoted
exclusively to service in protecting the nation was identified in the context o f the agreements
emerging from the inter-Congolese dialogue. The establishment o f a national army and police
force that are restructured and integrated i s one o f the key components o f the conflict resolution
process inthe DRC, and o f stabilityinthe subregion as well.
234. The Seminar on Security in the DRC (EUSEC)recommended the following priority
actions: (i)census o f all the administrative personnel of the FADRC; (ii) streamlineduse o f all the
administrative personnel; (iii) training innew technologies; (iv) improved wages; (v) planning for
incentive bonuses; (vi) organization o f staffing audits; (vii) introduction o f a combined
computerized management system at the central level, using individual change notices (AIMS)to
be sent by the unit directly to the Major General (EMG); and (viii) creation o f a computer network
at the central levellinkingthe EMGto the Ministry o f Defense.
235. Inaddition, a EUSEC audit mission was carried out incooperation with the Congolese
authorities, focusing on the existing dysfunctions inthe payrolland quartermaster's administration
within the Ministry o f Defense and the Armed Forces of the DRC. An 18-month technical
assistance program has been defined.
236. The Payroll and Quartermaster Administration Program within the FADRC places
emphasis on integrated brigades, the strategic aim o f which i s to command the loyalty o f the
militarypersonnel from these brigades andreduce the number of exactions from the people.
237. This program recommends the following actions: (i) developing and refining a
transitional status that simplifies certain aspects, inparticular compensation; (ii)
development o f a
unified database on all military personnel, identified by means of biometric data and updated in
accordance with change notices and/or through electronic data transmission. This database will
make it possible to track the careers o f individual military personnel; (iii)issuance o f an identity
card which would be presented in order to obtain payment; (iv) establishment o f a "financial
management" body at the level o f each integrated brigade, which would report solely to the
Budget and Finance Directorate of the Ministry of Defense; the physical payment o f the military
payroll would be carried out inperson by a member o f this directorate; and (v) organization o f a
training cycle for the heads o f this new system in order to improve their skills and performance.
The Government has undertaken and intendsto intensify the same reform and integration actions
62
with respect to the national police in order to improve its effectiveness throughout the national
territory.
238. The ultimate objective o f the program is to restore pride and cohesion to military service
in the army and the Congolese police, as well as to their families. This involves: @resumed
functioning o f an officer training system; (ii) refurbishment or construction o f housing;
(iii)restoration o f the medical support system for soldiers and their families; (iv) education for
their children; and (v) more rapid reunification of military personnel and police officers and their
families, once the situation so permits.
1.2.3. Security of persons and property
239. Enhanced security will result from the effective reunification o f the country and the
restoration o f State authority over the entire national territory. The Government set the first
milestones by establishing the Transition Territorial Authority. To be effective, the securitization
operation should be accompanied by the rapid deployment o f security and intelligence services
throughout the territory and the training o f specialized units o f the armed forces, police, and
security services.
1.2.4. Promotion of "good neighbor" relations inthe subregion
240. To promote and maintain "good neighbor" relations in the Great Lakes subregion, the
Government undertakes, on the one hand, to engage in intensive diplomatic activities aimed at
concluding nonaggression agreements consistent with the spirit of regional integration and, on the
other hand, to place at the borders specialized entities to control migratory flows and organize air,
land, lake, and sea surveillance of movements at the borders.
Pillar 2. Consolidatemacroeconomicstability and growth
241. The poverty reduction strategy depends first and foremost on robust and sustainable
economic growth, based on a stable macroeconomic framework and policies. Inthe fiscal policy
area, the Government intends, on the one hand, to control public expenditure while working to
ensure that the quality and composition o f expenditure will guarantee meeting the objectives set
forth in the MTEF, and, on the other hand, to increase public revenue by implementing reforms
and rapidly extending the coverage o f those already initiated. Monetary policy will remain
prudentover the period, built around strengthening the independence o fthe Central Bank.
242. The sectors with the greatest potential for economic growthhave been identified and will
receive support interms o f investment on the basis o f studies conducted with assistance from the
development partners, inparticular with a view to: (i) diversifying the export-oriented agricultural
subsectorsafter ensuring renewed vitality inagriculture, stock farming, and fishing; (ii) promoting
the development of microcredit and microenterprise; (iii) adequately supervising the exploitation
o f forest potential; (iv) defining a multimodal transport policy by May 2007, with support from
the development partners, with principle focus on the Port of Matadi and the main access points;
(v) finalizing the implementation of the mining sector reforms and beginning the restructuring of
the public enterprises inthe sector; and (vi) speeding up the completion o f the ongoing studies on
the electricity subsector (legal and regulatory framework), as well as making better use of the
potential o f the Inga site.
243. The exploitation o f natural resources should take account o f the environmental
dimension and o f transparency norms through the regular publication o f data on the activity levels
o f the various stakeholders. Implementation of the Extractive Industries Transparency Initiative
(EITI) will provide a focal point for experiences and their extension to other sectors.
63
244. The opportunities generated in all sectors with growth potential can be fully exploited
only with the support and participation o f the private sector, for which the business climate will be
improved by, among other things, clearly defining the regulatory standards and strengthening
legal and judicial security. In addition, the reforms to be undertaken in respect o f the State
portfolio should open up new economic opportunities for the private sector and promote the
recovery o f the sectors concerned.
2.1. Macroeconomicframework and policies18
245. In the absence of robust and sustainable economic growth, poverty reduction efforts
would be for naught. Robust growth i s sustainable only in a stable macroeconomic environment
accompanied by cohesive sectoral reforms andpolicies.
246. A macroeconomic framework which takes all these reforms, policies, and priorities of
the Government into account for the next three years i s presented below. It i s built around the
following axes: (i) the consolidation o f stability and economic growth; (ii) implementation o f
the
programbudgets; and (iii) the continuation o f the economic and structural reforms."
247. In quantitative terms, the specific goals set for the 2006-2008 period are as follows:
(i)sustained growth inproduction, which will reach 7.7 percent on average thanks to an inflow o f
external project finance; (ii) an average inflation rate o f 6.5 percent thanks to prudent fiscal and
monetary policies; and (iii) an external current account deficit (excluding grants) that will deepen
to 13.9 percent o f GDP on average following an increase in imports as compared to exports
resultingfrom a greater absorption.
Table 5. Summary of the Macroeconomic Framework, 2006-2008
ZOOS 2006 2007 200%
En. Pmj. Proj. Pro].
RealGDP growthrate 6.5 7.0 7.7 8.4
Inflationrate(end-of-period) 21.3 8.0 6.0 6.0
Growthinthe money supply (M2) 24.6 14.0 14.7 15.5
Currentbalance, includinggrants -3.4 -4.2 -6.1 -5.8
Currentbalance,excludinggrants -8.4 -10.1 -14.9 -16.6
Tax revenues 11.6 12.3 13.2 14.0
Total expenditure 15.8 24.3 26.9 29.0
Budgetbalance, excluding grants -4.2 -12.0 -13.7 -15.0
Gross investment 14.1 18.1 23.7 26.1
Source:Standing Committee on the Macroeconomic Framework(CPCM).
'*This macroeconomic framework (see Annex I)s provisional and could be changed in some respects following ongoing
i
discussionsbetweenthe Governmentandthe MF. The budgetaryframework refers to the 2006 BudgetLaw. The GDP growthrate
andinflationrate are projectedto be 6.5 percent and9.5 percent, respectively, in2006.
l9An alternative macroeconomic framework is provided in the annex (see Table 16)inthe event that the inflow of
external resources expected to support investments compatible with the desired growth fails to be mobilized. The
projections indicate that contraction in anticipated resources would reduce the growth rate by about 0.8 basis points
per year over the 2006-08 period. The adjustments made following a scaling back of the ambitions of the priority
ministries would reduce public investment and current expenditure by 1.3 percent of GDP and 0.4 percent of GDP,
respectively, in comparison with the baseline scenario, bringing the budget appropriation of these ministries from
41.9 percent in 2006 to 55.5 percent in 2008, as comparedto 58.6 percent of GDP inthe baseline scenario Imports of
goods and services would be reduced by 0.5 percent of GDP, while the pace of exports would rise by 2.4 percent of
GDP; thus the current deficit would increase to a lesser extent than under the baseline scenario (2.6 percent o f GDP
on average over the period).
64
2.1.1. Fiscalpolicy
248. The fiscal policy for the next three years will remain prudent and should contribute
to the consolidation of macroeconomic stability through increased resource mobilization and
improved control over public expenditure, while ensuring a more streamlined allocation of
resources in favor of the social sectors, mainly health, basic education, HIV/AIDS, water
supply and sanitation, and road infrastructure. Financing the strategies in the sectors with
growth potential will necessitate improving government revenue by strengthening tax
administrationand introducing tax reforms, continuing efforts to combat corruption and fraud, and
increasing the contribution of the miningand forestry sectors.
2.1.1.1. Customs, tax, and nontax revenue
249. The tax revenues are projected to amount to 13.2 percent o f GDP over the period,
compared to 11.6 percent o f GDP in 2005, thanks to continued efforts to improve transparency
and to combat fraud in the administrations responsible for the collection o f tax and nontax
revenues, as well as to a policy to broadenthe tax base."
2.1.1.2. Public expenditure
250. The total expenditure of the State i s expected to increase significantly, from 15.8 percent
o f GDP in2005 to 29 percent of GDP in2008, principally owing to increases inpublic investment
in the priority sectors. The objectives relating to expenditure control will be pursued through a
prudent wage policy (an average increase from 4.69 percent of GDP in 2006 to 4.71 percent o f
GDP in2008), infavor o f an increase ininvestment against own resources, which would increase
from 0.6 percent o f GDP in2005 to 1.8 percent o f GDP at the end o f the period. The Government
will improve the increased used o f the resources made available by debt relief under the HIPC
Initiative, and will strengthen the mechanisms for monitoring the use o f them. Common
expenditures will be maintained at the 2006 level during the period (0.6 percent of GDP).
251. To improve the quality of expenditure, an indicative comprehensive Medium-Term
Expenditure Framework (MTEF) was produced and made it possible to make intersectoral
allocations in favor of the ministries identified as having priority (Table 6).'l Because the
objective o f the MTEF is a streamlined allocation o f the resources that are available and can be
envisaged on the basis o f the overall expenditure that the macroeconomic framework was able to
identify using the TOFE, indicative ceilings were assigned to each sector, with priority accorded
to the sectors directly associated with the strategic axes o f the PRGSP. It should be noted that the
quantitative work inthe HIV/AIDSand Rural Development, Agriculture, and Forestry sectors will
be finalized during implementation. Trade-offs between the sectors were made on the basis of:
(i) rolesoftheministries,whichgenerallycorrespondtothestrategicaxesandprioritiesofthe
the
PRGSP; (ii) the availability of sectoral studies; and (iii) expression o f the need for additional
poverty reduction expenditure. On the above basis, the MTEF places special emphasis on the
following actions: (i) improvement o f road infrasmctures; (ii) improved access to basic
education; (iii) improved access to primary health care; (iv) improved supply o f safe drinking
water and access to sanitation; and (v) the fight against HIV/AIDS.
252. The priority ministries involved inthese actions should, according to the MTEF, receive
budget allocations representing, in2006, 2007, and 2008, respectively 41.9 percent, 55.9 percent,
and 58.5 percent o f all expenditure appropriations after subtracting interest payments on the debt.
These allocations, bypriority ministry andyear, are as follows:
2o The tax and customs reforms supporting this increase are described under items 1.1.3, Economic governance, on the
mobilization ofresourcesby OFIDA, the DGI, andthe DGRAD.
21The MTEF will be fine-tuned and revised accordingly during the periodic evaluations of the Poverty Reduction and Growth
StrategyPaper.
65
1Table 6. Allocationsto the priorityministries(in percentage ofprimary expenditures)22
priority ministries 1 I
Actions Appropriations
2006 1 2007 1 2008
Public Health Improvedaccess to primaryhealth care and the fight
against HIV/AIDS 7.5 12.3 12.9
Primary, Secondary, and Improvedaccess to basic education
Vocational Education 12.2 15.5 16.7
Public Works and
Infrastructure Improvedroad infrastructures 11.2 15.8 16.3
Energy Improvedaccess to safe drinking water 10.0 10.2 10.3
Environment Improvedsanitation 0.9 2.1 2.3
TOTAL 41.9 55.9 58.5
Source: StandingCommittee on the Macroeconomic Framework
253. Overall, there is also growth in the expenditure o f these ministries, though it has not
been possible to completely reverse the short-term trend of the primacy o f the other ministries
taken together.
254. Health. Implementation of the strategy in this sector is reflected in a pronounced
increase in budgetary expenditure, whose share in primary expenditure i s projected to increase
from 7.5 percent in2006 to 12.3 percent in2007 and 12.9 percent in2008. Inaccordance with the
strategy, this effort will be distributed unequally between current expenditure and capital
expenditure.
255. Primary, Secondary, and Vocational Education (EPSP). In keeping with the
Government's budget arbitrage, the budgetary allocation would increase from 12.2 percent in
2006 to 15.5 percent in2007 and 16.7 percent in2008. Capital expenditure i s projected to expand
more rapidly than operating expenditure owing to classroom rehabilitation factors.
256. Public Works and Infrastructure (TPI). Growth in the budgetary expenditure on
infrastructure will increase its share from 11.2 percent in 2006 to 15.8 percent in 2007 and
16.3 percent in 2008. Capital expenditure in this sector will expand more rapidly than current
expenditure owing to the needs for the reconstruction and rehabilitation o f dilapidated
infrastructure inthis sector.
257. Energy.The share of this sector inprimary expenditure will increase from 10percent in
2006 to 10.2 percent in 2007 and 10.3 percent in 2008. Capital expenditure will account for a
significant share by comparison with current expenditure owing to the rehabilitation o f water
treatment centers.
258. Environment.The budget allocation for this ministry will improve from 0.9 percent in
2006 to 2.1 percent in 2007 and 2.3 percent in 2008. Capital expenditure will account for a
significant share by cornparison with current expenditure owing to the installation o f an adequate
system for the evacuation o f solid and liquidwaste.
2.1.1.3. Financingofthe budgetdeficit
259. The budget deficit (cash basis), includinggrants, will be contained at 2.7 percent of GDP
on average over the period, takinginto account the need to reduce bank credit to the State inorder
to assist the BCC inthe conduct o f monetary policy.23
22 Pending the clear definition of a correspondence table leading to a functional nomenclature that can be used as a geniuine
PRGSP implementation instrument, the budget framework uses allocation in accordance with the administrative classification
currentlyusedinbudgetmanagementinthe DRC.
Chart 3. Publicfinances in percent of GDP, 2005-2008
Publicfinances
260. The financing o f this deficit i s projected to come from external budgetary loans and
grants on the order o f 0.5 percent of GDP in2006, 1.4 percent o f GDP in2007, and 1.3 percent o f
GDP in2008, as well as external financing for investment projects on the order o f 9.7 percent o f
GDP in 2006, 9.9 percent o f GDP in 2007, and 11.2 percent o f GDP in 2008. However, there
would be financing gaps on the order o f 2.2 percent o f GDP in2006, 1.8 percent o f GDP in2007,
and 1.9 percent o f GDP in2008. To cover the fiscal deficit inits entirety, the Government intends
to purse discussions with its development partners in order to mobilize additional budgetary
support and avoid recourse to financing from the banking system.
2.1.2. Monetary policy
261. The monetary policy remains prudent, and will accord priority to price stability in the
context o f a floating exchange rate regime and the preservation o f positive and flexible interest
rates. The government should continue to support the independence o f the BCC, which has sole
responsibility for monetary policy. The objective will be to maintain the average inflationrate for
the period at around 7.4 percent. It is thus anticipated that broad money will increase, in annual
average terms, by 14.7 percent, namely through increases o f 14 percent in 2006, 14.7 percent in
2007, and 15.5 percent in2008. To accommodate the monetary policy, the State will refrain from
advances from the BCC, which will make it possible to free up liquidity in amounts compatible
with demand from the private sector. Net foreign assets are projected to increase by US$77
million in 2006, US$44 million in 2007, and US$43 million in2008, as compared to an increase
o f US$21 millionin2005. Inaddition, the monetary policy objectives will be widely disseminated
among the public inorder to bolster credibility, and the BCC should report regularly on monetary
policy implementation.
2.1.3. Externalpolicy
262. In the context of the PRS, the debt sustainability indicators are expected to improve
considerably inthe mediumterm thanks to improved exports and debt relief under the Enhanced
HIPC Initiative. The current balance i s projected to record an average deficit on the order of 13.9
percent o f GDP over the period, largely attributable to the increases in capital goods imports and
the insufficient levelofnational savings.
263. The Government undertakes to pursue a prudent borrowing policy. It will
strengthen its contacts with creditors and scrupulously fulfill its external debt service
commitments until the DRC reaches the Completion Point o f the HIPC Initiative and can benefit
23This deficit does not take into account the impact of the decentralizationas defined in the Constitutionpromulgated on February
18,2006 and of apossible restructuring of the BCCbalance sheet.
67
from bilateral and multilateral external debt cancellations. This will enable it to free up additional
resources for financing its development programs. In addition, any borrowing contracted (or
guaranteed) by the public sector, including by the BCC and the decentralized administrative
entities (EADs), will observe the level o f concessionality defined inthe Technical Memorandum
on Execution o f the Government Economic Program. Major efforts will be made to mobilize
external financing inaccordance with the State's development objectives and economic policy. As
regards management o f the external debt, the DMFAS program will become operational at the
Public Debt Management Office so as to enable it to centralize information on the public debt,
produce reliable data on that debt, and carry out a sustained analysis o f the sustainability o f the
external debt by end-2006.
2.2. Boost economic activity and growth
264. As the diagnosis revealedthat a double digit rate of real economic growth over a long
period i s essential in order to reduce poverty significantly, the Government's objective i s to carry
out suitable economic policies and take the steps necessary to achieve such a rate as rapidly as
possible.
265. After registering growth o f 6.5 percent in 2005, the Congolese economy is expected to
consolidate this path by staying the course with growth o f 7.0 percent in 2006, 7.7 percent in
2007, and 8.4 percent in 2008. When examined against the average population growth rate
projected for the same period, projected at 3.0 percent, it is determined that real per capita
incomes should increase by 3.4 percent on average over the period. These growth targets are
predicated for the most part on the anticipated dynamism o f activities in construction and public
works, trade and transportation, as well as a diversification o f and increase in the products from
the primary sector, including Mines and Forests (Table 7). Moreover, an upward trend in
agricultural production has been forecast in anticipation o f the effects o f implementing an
effective agricultural policy. The average rate o f production growth from agriculture, livestock,
and fisheries i s projectedto be 3.4 percent, as compared to 1.4 percent in2005.
266. Changes in the shares contributed by the various sectors to real GDP should reflect the
continuing gradual transformation of the economy. According to the projections shown below, the
share o f the primary sector will be reduced, declining from 53.7 percent in2006 to 52.7 percent in
2007 and 51.7 percent in 2008, compared to 54.6 percent in 2005. The share o f the secondary
sector i s projected to increase from 12.2 percent in 2005 to 12.7 percent in 2006, 13.4 percent in
2007, and 14.1 percent in 2008, while the contribution o f the tertiary sector would increase
slightly from 31.1percent in2005 to 31.5 percent in2006, 31.8 percent in2007, and 32.1 percent
in2008.
68
Table 7. Patterno f sectoral growth and sectoral contributions to real GDP growth, 2006-2008
2004 2006 2008
I/ 21 I / 21 I/ 21,
Primary sector - 2.3
4.0 - - - - - 3.r
4.5 2.5 5.3 2.9 5.7 -
6.4
Agriculture, forestry, hunting andfisheries 0.6 0.3 1.4 1.2 3.0 1.2 3.4 1.3 3.9 1.5
Extractive industries 16.4 2.0 9.3 1.3 12.3 1.7 12.4 1.8 12.8 1.9
Secondary sector 20.5 2.2 - 1.1
9.3 -1.4
11.1 -1.7
13.8 -1.9
14.4
Manufacturing industries 24.0 0.9 13.3 8.0 0.4 8.4 0.4 8.9 0.4
Electricity, water supply -7.4 -0.1 2.7 0.0 12.0 0.1 12.4 0.1 12.9 0.1
Constructionandpublic works 22.5 1.3 20.6 0.7 13.0 0.9 17.4 1.3 17.9 1.4
Tertiary sector - - 9.0
6.5 2.0 - - 2.7 - 2.6
8.4 - 2.8
8.8 - 310
9.3
Wholesale andretail trade 5.7 1.o 9.2 1.4 8.0 1.4 8.4 1.5 8.8 1.6
Transportationandcommunications 11.3 0.6 12.7 0.6 12.0 0.6 12.4 0.7 12.9 0.8
Market services 8.1 0.5 7.9 0 2 7.5 0.4 7.8 0.4 8.4 0.5
Nonmarket services 11.6 0.2 0.7 0.2 5.0 0.1 5.4 0.1 5.9 0.1
Imputedproduction ofbanking services 195.9 -0.3 10.7 0.3 5.0 0.0 5.0 0.0 5.0 0.0
Import duties andtaxes 11.5 0.2 0.7 0.1 10.0 0.2 7.5 0.2 7.5 0'2
GDP at marketprices __
6.6 - 6.5
6.6 - - 7.0
6.5 7.0 - 7,7
7.7 - 8.4
8.4
Source: StandingCommitteeonthe MacroeconomicFramework (CPCM).
1/ Percentagechange from precedingyear.
21Contribution of sectors to real GDP growth.
267. To meet the challenge o f poverty and put the economy o f the DRC back on the path o f
sustainable growth, the Government undertakes, in the context o f the PRGSP, to take priority
actions aimed at revitalizing economic activity by supporting the sectors with growth potential so
as to put an endto the poverty spiral.
2.2.1. Consolidate the sectorswith growth potential
2.2.1.1. Agriculture and rural development
268. Agriculture accounts for almost 63 percent of GDP and provides the livelihood o f over
70 percent o f the population. That i s why this sector has, alongside others, an important place in
the national program for economic recovery and poverty reduction. The strategies aimed at
revitalizing the productive structure of the rural world are predicatedprimarily at recovery inthe
agricultural, livestock, and fisheries sector.
A. Recoveryinthe agricultural, livestock, and fisheries sector
269. A sector recovery program has been developed by the Government with participation
from the various development partners. The objective i s to restore and exceed the pre-crisis
production level. Poor production in the primary sector i s borne out by food insecurity,
malnutrition, the shortage o f quality seeds, price increases, and the underdevelopment o f
processing, farm product conservation, and fisheries.
69
270. The actions to be taken in the short term involve: (i) reactivation o f the seed centers;
(ii)strengthening the mobilization and supervision measures for the rural road, focusing them on
modern crop methods; (iii) revitalizing the livestock sector by boosting the restorationof the herds
decimated during the conflict period; (iv) restoring the diversification o f cash crops;
(v) strengthening support for producers through the distribution o f inputs and dissemination o f
applied research; and (vi) the development and organization o f agricultural markets, and
development o f the fisheries sector.
271. In the medium term, the actions will focus on: (i) support for private initiatives
(economic agents, cooperatives, etc.), particularly as regards supervision, supply, and marketing;
(ii)support for the Community Development Committees (CDCs), Village Development
Associations (ADVs), and cooperatives so as to make them genuine economic agents and
gradually change the traditional farming systems.
272. Strategy inthe agricultural sector i s also aimed at diversifying production and improving
yields. The final results sought are restoration of food self-sufficiency, the production of
marketable surpluses, and improved yields. The gains in question could be invested in other
income-generating activities and contribute to increasing nonagricultural employment in rural
areas.
B. Boostingincomes inrural areas
273. In the short term, increasing the monetary incomes of rural families will inevitably
involve cash crops, principally coffee, tea, cotton, and potatoes. These crops, production o f which
70
has fallen to almost nothing, will benefit from reactivation and sustained promotion efforts in
order to make a significant contribution to poverty reduction and improving the well-being o f
rural families.
C.Diversification of the agricultural export subsectors
274. The development of the agricultural export subsectors will, of necessity, involve the
development o f nontraditional products that are readily exportable and have a high commercial
value. Inthe case at hand, these are market garden and fruit crops. For this to occur, inthe short-
term it will be necessary to introduce a production and distribution plan for market garden seeds
and plans for fruit production, to train supervisors and line personnelinthe sector, and to organize
and guide producers' associations.
D. Increased livestockproduction
275. The aim o f improving livestock and fisheries production i s to overcome the protein
deficiencies of the population and, in so doing, also reduce the rates o f malnutrition and
nutritional deficiency diseases. Priority will be accorded to rebuilding the heard and to genetic
improvement o f the breeds.
276. An integrated program for rebuilding the herd will be established, and would include
highlyprolific short-cycle small livestock inorder rapidlyto achieve resultsthat can help improve
the living standards o f rural families. Inaddition, this type o f livestock farming lends itself well
to agro-sylvo-pastoral integration. Increasing rural family incomes also entails the promotion o f
crafts, making it possible to create nonagricultural jobs and reduce imports. To develop this
subsector, it is proposedthat actions be takeninterms o f training, supervision, and financing. The
support should begin in particular with the organization and creation o f groupings and
associations o f artisans, extending loans, rehabilitating units destroyed during the conflicts, and
creating a rural development support fund.
277. For heavy livestock, the focus will be on improving local breeds by crossing them with
highlyproductivebreeding stock.
278. Breedingcenters will be set up and managed by the communities, with training provided
by veterinarians from the extension services.
279. The intensification o f livestock productivity will not occur unless the animals have
proper feeding conditions: forage and concentrates. Accordingly, forage crops will be encouraged.
The seed subsector should also incorporateforage crop seeds.
280. To gain as much as possible from intensive livestock farming, the prevention and
treatment o f the most frequent and most harmful diseases must be supported. It goes without
saying that the State and the development partners will have to provide considerable support in
the short term for these stock-rearinginputsas well as for various types o f care.
E.Fishery development
281. Fishery has been neglected heretofore, despite the considerable potential thanks to the
Congo River. Initiatives taken by the people are already underway, and support will be necessary
in order to develop production. The first activity would be to supervise those active in fishery,
modernize fishery equipment and materials, and facilitate access to credit. In the long term, the
actions to be takenwill focus on introducing fishprocessing and conservationtechniques inorder
to reduce the losses sustained inperiods o f overproductionor duringtransport.
71
F.Promotion of microcredit andmicroenterprise
282. Insynergy with the rural development strategy and the improved productivity analyzed
above, it will be important to pursue a voluntarist program o f diversification and rural sector
finance.
283. The latter will entail the promotion and support o f microcredit systems and the
promotion o f individual and collective production units in the form o f microenterprises. In
addition, the development o f rural credit could provide improved access to agricultural inputs.
However, it must be noted that the financing instruments available in rural areas are quite weak
and rudimentary.
284. Inaddition, this financing will make it possible to promote rural saving, which remains
low. This will involve promoting savings and loan institutions and their establishment in rural
areas. It would hence be advisable to develop flexible and suitably adapted mechanisms for
extending credit. The NGOs and community development committees will be called upon to this
end.
G.Environmental protection
285. To protect the environment so as to consolidate the necessary link between safeguarding
the environment and the pursuit o f development, the Government will implement a strategy
focused on the following priority actions: (i) conducting an ongoing public awareness and
education program on safeguarding the environment; (ii) implementing the strategy on the
conservation o f biodiversity, in particular through the protection and restoration o f plant cover;
(iii) ofthenaturalforestsandexpansionofafforestedareas;and(iv)implementationof
defense
the United Nations Framework Convention on Climate Change, the protection and conservation
o f water and water resources, and maintaining environmental health, as well as the prevention o f
natural disasters.
286. Institutional mechanisms and appropriate incentives will be put in place to promote the
involvement of the private sector and other non-State bodies in environmental management and
preservation.
2.2.1.2. Forests
287. Some 40 million o f the poorest Congolese depend upon the forest for their food,
materials, energy, and medicine. As the Government i s cognizant of the potential o f the forestry
sector and the role it can play inrevitalizing the economy and combating poverty, it has set itself
the objective o f restructuring this sector in order to guarantee its sustainable exploitation and
make it one of the principal income sources in the country. Among other things, this will entail:
(i) regulationand streamlining ofthe granting of forestry concessions; (ii)
better promoting
controlled industrial exploitation that can create newjobs and generate incomes through trade in
wood, charcoal, and a wide range o f non-timber products; and (iii) abutting and local
involve
communities inthe management andprotection o f forests and the environment inorder to enhance
their rights and improve their living conditions thanks to the benefits that will accrue.
288. These objectives will be sought pursuant to an agenda based on the following axes:
a. Rebuilding institutions. This will entail strengthening the institutional capacities of the
adrmnistrationswith responsibility for forests andthe conservationof nature (training,
professionalretraining, compensation, equipment,technicalassistance, infrastructure
rehabilitation, etc.);
72
Ensuring theparticipation of all stakeholders.All partiesmust be involved, bothwithin the
country and abroad, inasmuchas the Congolese forest is subjectedto awhole array ofvaried
and sometimesdivergent expectations. These include, among others, the governmental
authorities,civil society (NGOs,local communities), the private sector, local entities
(provincesandterritories), internationalcooperation(cooperationagencies, donors,
internationaldevelopment NGOs);
Promoting localforest management methods.This entails assistanceto small, family- or
community-basedforestry enterprises, which contributeto poverty reduction, andthe
development of community-level forests by acknowledgingthe rights of communities
themselves to manage the forests which they havetraditionally inhabitedandutilized;
Preserving biodiversity and environmental services.This includesthe rehabilitation and
expansionofthe network ofprotectedareas (parks) andthe preservationof the biodiversity
outsidetheprotected areas (fauna).
289. The forestry sector offers enormous potential benefits which can make an immense
contribution to reducing poverty thanks to the incomes and new jobs it can generate and the
subsequent improvement in the living conditions in grassroots communities. Supervising this
sector must be at the core o f the poverty reduction strategy o f the DRC, and this process must
entail the implementationo f the forestry code o f 2002.
290. More specifically, the following actions should be taken: (i) strict application o f Decree
No. 05/11/116 o f October 24, 2005 and o f all the implementing measures o f the Forestry Code
and the Law on the Conservation of Nature; (ii) inclusion o f the national forestry policy in the
regional strategy for management of the forests inthe Congo Basin; (iii) regulation o f exports of
forestry products; (iv) establishment and enforcement o f public bidding procedures, with
exceptional amicable procedures being limited to the forests o f grassroots communities;
(v) introduction of appropriate taxation which provides incentives (2006-2008); (vi) adoption of
the main implementing provisions for the Forestry Code, focused on sustainable development and
control, local consultation procedures, and the mechanisms for allocating forests; (vi;) recruitment
o f a third-party observer tasked with assisting the administrationinits monitoringmissions inthe
field to combat illegal forest exploitation; (viii) permanent retrocession to local entities o f 40
percent o f the forestry area tax and effective use o f this funding pool for building basic
infrastructure; and (ix) training, information, and awareness-building among local communities,
73
forest operators, and the management personnel o f the Protected Areas, and participation in the
activities o f the Conference o f Ministers o f the Central Africa Forests Commission (COMIFAC).
291. Inaddition, the organizedparticipation of grassroots communities inforest management
i s essential to maintaining and safeguarding biodiversity. To this end, the Government intends to
heighten communities' awarenessby encouraging them to organize as part o f the establishment o f
a rural forestry strategy framework.
292. The forestry strategy i s also includedinthe context o f the COMIFAC Convergence Plan,
and incorporates its negotiationmechanisms.
2.2.1.3. Transport
293. The economic recovery o f the DRC involves the rehabilitation o f the transport
infrastructure (road, river, lake, and air transport) as a sector which supports growth and
contributes to the mobility o f persons and goods.
294. To ensure that this sector regains its role as a driving force for the economy ina country
the size o f a continent, objectives have been identified inthe "Transport Policy Framework o f the
DRC and 2003-2015 Action Plan, namely:24(i) ensure the integration o f the economic entities of
the country in order to make them complementary and thereby contribute to poverty reduction
through the rehabilitation, modernization, and interconnection o f all transport networks;
(ii) guarantee optimal conditions for operational safety by observing the standards recommended
by the competent international organizations; (iii) the transport needs of the people at
meet
competitive prices, with increased involvement o f the private sector through partnerships to be
promoted with the public sector; (iv) promote administration o f the national territory by favoring
the mobility o f the unitsresponsible for ensuring the security o f goods and persons, a sine qua non
condition for strengthening national unity and promoting socioeconomic development; and
(v) work toward the regional integrationadvocatedby the African Unionand the New Partnership
for Africa's Development (NEPAD), while implementing the recommendations o f the
organizations o f which the DRC i s a member.
295. The priority actions to be undertaken to achieve the objectives of this sector are:
(i) oftheinstitutional,judicial,andlegalframeworktobringituptodateandadaptitto
revision
24 The Transportation Policy and its Action Plan were adopted at a workshop organized by the Ministry of Transportation with
supportfrom the WorldBank.
74
the national and international environment; (ii) promulgation o f a law on privatization and public-
private partnerships to enhance the profitability o f enterprises in the sector and mobilize private
financing; (iii)establishment of a transport regulation agency to ensure compliance with the rules
o f equitable competition and monitor the execution o f the reforms, in particular the concession
agreements (PPP); (iv) the restructuring o f public enterprises, to be preceded by studies o f the
social plans to safeguard social peace in the enterprises and take workers' interests into account;
(v) strengthening the human and institutional capacities of the public agencies in the sector,
providing effective motivation for the implementation of the reforms and monitoring the
execution o f same; (viii) application o f the standards and recommendations o f international
organizations (ICAO, WMO, etc.) and regional organizations (COMESA, SADC, etc.) o f which
the DRC is a member; (ix) consideration of the environmental impact of transport;
(x) systematizing the technical inspection o f vehicles and aircraft; (xi) rehabilitation and
modernization of transport infrastructures (roads, rail, navigable waterways, airports) to improve
services to users; and (xii) development and implementation o f high-performance means o f
protecting roadassets.
296. Inaddition, future interventions inthis sector will involve 14,771 kilometers ofroads in
the next three years (7.3 percent in2006, 42 percent in 2007, and 50.7 percent in2008), and will
revolve around the following strategic axes: road paving, rehabilitation, and maintenance. Paving
will involve 699 kilometers o f roads (2.1 percentin2006, 34 percent in2007, and 63.9 percent in
2008). Rehabilitation will cover 6,478 kilometers o f roads (11.9 percent in 2006, 40.6 percent in
2007, and 47.5 percent in2008). Finally, the Government undertakes to maintain 7,594 kilometers
o f roads (3.7 percent in2006,43.9 percent in2007, and 52.4 percent in2008).
2.2.1.4. Mines
297. Inthe context ofthis policy, the Government hasinitiated anumber ofreforms targeting
the restructuring o f the public enterprises, including those in the mining sector. The injection o f
private capital, the resurgence of production, and improved management are the core components
governing the implementationof this policy.
298. These reforms were reflected concretely by the promulgation o f a new Mining Code as
well as the establishment o f the structures which ensure proper application o f that code (Mining
Registry, mining planning unit, etc.) The new law i s aimed at attracting new investment, taking
the global market situation of the sector into account.
299. The mining sector i s expanding in the area o f artisanal gold and diamond mining,
whereas the industrial production o f copper, zinc, cobalt, and gold are in sharp decline. Recent
discoveries of new deposits of precious stones call for a special strategy coupled with rigorous
integratedmanagement of these nonrenewable resources, as regards boththeir extraction and their
processingso as to obtain the maximum added value.
300. To bring this about, a number of actions will be taken, including: (i) strengthening the
management capacities of the enterprises active inthe sector, so as to improve the exploitation o f
precious substances and promote a competitive mining industry; (ii) dissemination of the mining
code, mining regulations, and other laws; (iii) building SAESSCAM's capacities for supervising
and promoting small mining operators; (iv) encouraging and promoting microcredit in favor o f
artisanal mining operators; (v) with regard to GECAMINES, completing the audit o f partnership
agreements to make it possible to adopt the definitive restructuring strategy; (vi) operationalizing
the mining title validation commission; and (vii) completing the operational audit o f CAM1 in
order to proceedwith its restructuring.
75
301. The strategy advocated by the Government in this sector also involves streamlining the
exploitation of mining resources, providing sustainable support for economic growth and
effectively contributing to improving the social conditions o f workers in the sector and the
Congolese people as a whole.
302. Implementation o f this strategy will enable the mining sector to play its primary role in
support o f the economic and social development o f the DRC.
2.2.1.5. Electricity
303. As energy is one o f the main keys to development, the Government's objective in this
sector i s to ensure broad access by all social groups and national grassroots communities to
reliable electrical energy, with a view to increasing access to electricity to 60 percent and
ultimately to the entire national territory by 2025.
304. To achieve this, the Government intends, with assistance from interested partners, to
carry out activities with regard to the electrification or urban centers and exports, and rural
electrification.
76
305. Electrification of urban centers and exports. Actions inthis area involve: (i) priority
investments aimed at rehabilitating and improving the reliability o f existing infrastructures, and
developing new infrastructures; (ii) promoting the development o f the Inga site and building the
associated transport networks to permit the export o f surplus electricity in the context o f
subregional cooperation; and (iii) mobilizing the funds necessary for regional integration projects
inthe context ofregional and subregional organizations (NEPAD,UPDEA, SAPP, PEAC, EAPP,
NBI,etc.).
306. Rural electrification. The following actions are contemplated: (i) preparation o f a
national rural electrification program and the establishment o f an execution structure and
timetable; (ii) development o f the use o f other alternative primary energy forms for the production
o f electricity (new and renewable energy sources, solar, wind, biogas); (iii)more rapid
implementation o f the institutional reforms in the subsector, in particular through the following
activities: (a) finalization o f the ongoing studies on the institutional reforms (COPIREP and the
study on PMURR financing); (b) promulgation o f the Electricity Code and regulations; (c)
increased use o f public-private partnerships for certain projects; (d) strengthening the requirement
of good governance in the management of public and private stakeholders; (v) the creation o f
energy cooperatives in rural and semi-urban areas; and (vi) improving technical and commercial
management through program contracts and performance contracts based on self-financing and
development objectives adapted to the MillenniumDevelopment Goals (MDGs).
2.2.2. Promote the private sector
307. Combating poverty and promoting sustainable economic growth will be unsuccessful in
the absence o f a dynamic partnership between the State and the private sector. This will entail
puttinginplace incentive policies intendedto improve the business climate and reform the public
enterprises inorder to promote and support the national and internationalprivate sector.
308. The objective is to institute a business climate conducive to promoting the growth o f
competitive enterprises capable o f creating new jobs. This involves: (i)improvement of the
investment climate for both national and foreign investors (legal and regulatory framework, tax
regime for enterprises); (ii) finalization of the labor code and the commercial code; (iii)settlement
of the domestic debt to enterprises; and (iv) reduction of the commercial date through the London
Club's debt repurchase operation. In addition, it will be necessary to strengthen or create the
institutions and instruments necessary for economic regulation.
77
2.2.2.1. Improvethe businessclimate
309. The increase in production, agricultural processing, marketing, and the promotion o f
microcredit and microenterprise as well as rural credit, cannot occur unless the private sector i s
fully playing its role as a driver of the economy. The private sector will therefore be called upon
to assume greater and greater importance, with the role o f the State being to regulate the overall
system. The main efforts will focus on the revitalization of the private sector, State disengagement
from the productive system, industrialization o f the country, and promotion o f the services sector,
tourism, and regional integration.
310. The Government is convinced that accelerated and sustainable economic growth can be
achieved only by a dynamic and diversified private sector turned toward job creation,
development o f the industrial fabric, and exports. This i s why the Government's medium- and
long-term development strategy will consist o f making the private sector the motor o f growth. To
this end, five specific orientations have been identified: (i) short-term emergency actions will
include: (a) settlement of the State's domestic arrears; (b) the introduction o f support mechanisms
for economic operators that have incurred damages through reconstruction activities; and (c) the
rehabilitation o f the production infrastructures, thoroughfares, and marketing channels destroyed
duringthe crisis; (ii) improvement o f the business environment and security, while taking care to
promote the competitiveness o f the private sector; (iii)reform of the legal and regulatory
framework, including reform o f the tax regime, public enterprise reform, and State divestment;
(iv) strengthening of the incentives for increased private investment; and (v) improvement inthe
capacities o f the financial intermediation system to guarantee effective support for wealth
creation.
78
2.2.2.2. Public enterprise reform
311. Aware o f the need for a public-private partnership for revitalizing the economy, the
Government has developed a strategy for reform o f the public enterprise sector. The aims o f these
reforms are to: (i) ensure that public services are provided sustainably and on a commercial basis,
calling as necessary on the assistance o f the private sector in various forms (partnerships,
concessions, partial or full sale o f shares); and (ii)
reduce the quasi-fiscal costs resulting from the
poor management o fpublic enterprises and or from their organization.
312. To enable the Government to define and adopt the restructuring plan for public
enterprises, a public enterprise reform steering committee (COPIREP) has been established to
prepare and carry out the reforms relating to public enterprise restructuring following a diagnosis.
Inaddition, COPIREP assistedthe sectoral working parties indevelopingtheir strategic plans for
public enterprise restructuring inthe mining, transport, energy, telecommunications, and banking
sectors. These restructuringplans are based on the principles of: (i) restoring the regulatory role of
the State; (ii) returning private initiative to its role as the driving force in growth and
development; and (iii) achieving the broadest possible consensus o f all participants at multiple
levels.
313. To promote the public-private partnership, the Government submitted to Parliament for
adoption four draft laws on: (i) the transformation o f public enterprises; (ii) divestment; and
State
(iii)application o fthe provisions governing public enterprises and public entities.
314. Inconjunction with these draft laws, a study has been conducted on the reclassification
o f the public enterprises eligible for transformation into public entities or commercial companies,
and forwarded to the Government for adoption.
315. Inaddition, the studies on the restructuring strategies for several target enterprises are
being prepared. These studies are based on the principle o f promoting public-private partnerships,
and concern GECAMINES, RVA, SNCC, ONATRA, LAC, City Train, COHYDRO, SNEL,
REGIDEO, and OCPT.
2.2.2.3. Improvefinancialintermediationand promotemicrofinance
316. The Government has carried out a vast program o f reforms o f the national financial
sector in order to ensure that this important sector o f the economy plays its true role in financing
growth and poverty reduction. Despite these efforts, the banking system i s experiencing a problem
with the dysfunctional nature o f the financial intermediation function in terms o f financing
medium- and long-term loans. Furthermore, access to credit and/or production factors, one o f the
effective means o f bringingthe poor into economic channels, still remains quite difficult.
317. The vision in the banking and microfinance sector i s to establish, by 2010-2015, an
efficient national payment system in which transactions take place rapidly and allow the
circulation of capital within the country or to foreign countries.
318. The objective pursued i s to consolidate and modernize the mechanism for the conduct of
monetary policy so as to ensure price stability and improve the penetration o f banking services in
the Congolese economy. The priority actions advocated are: (i) relaxation o f the conditions to be
met for creating banks, whose minimum capital has been set at US$1.5 million; (ii) buildingthe
purchasing power o f the national currency through a prudent monetary policy and broadening o f
the money market; (iii) continued actions to restructure bank and nonbank financial institutions,
recapitalize the Central Bank, and create a financial market buttressing a diversified and efficient
payments system; (iv) introduction o f special incentive mechanisms for networked banks interms
79
o f the tax system, the allocation o f foreign exchange, etc.; (v) redeployment o f the Central Bank
throughout national territory, expansion o f the investment code benefits to investors in the
banking sector, and implementation o f policies providing incentives for the creation o f banksnear
where people live; and (vi) the modernization o f computer andtelecommunications equipment.
2.2.2.3. Promote employment
319. One o f the most pressing challenges that the Government must address is the adoption of
policies that will enable the economy to absorb the youths arriving on the labor market. The
problem i s particularly acute owing to the rapid increase in the working age population in
conjunction with the severejob shortage. Raw data indicate that the working age population inthe
DRC, that is, those between the ages of 15 and 63, is 80 percent of the total. This category is
engaged inagricultural activities insmall family farms and the informal sector.
320. The overall objective i s to promote employment for all and to increase the incomes o f
the people inorder to improve their living conditions.
321. To reach this objective, the Government's strategy revolves around the four following
priority axes: (i) development o f the national policy on promoting jobs and vocational training;
(ii) thecapacitiesoftheinstitutionsandpublicandprivateorganizationsresponsiblefor
building
promotingjobs and combating poverty, so that these bodies will become capable o f playing a role
in promoting employment both centrally and decentrally (social partners and civil society
stakeholders); (iii) equitable expansion o f job opportunities and opportunities for income-
generating activities for the poor; and (iv) strengthening of the existing social protection systems
and their extensionto workers inthe informaleconomy andtheir families.
322. Develop the national policy on promoting employment and vocational training. The
Government undertakes to take the following actions: (i) the priorities and objectives o f the
define
employment and vocational training policy; (ii) organize and conduct workshops to prepare and
validate the national policy paper on employment and vocational training; and (iii) strengthen the
legal framework as well as social dialogue mechanisms.
323. Buildthe capacities of the institutions andpublic and private agencies charged with
promoting employment and combating poverty. The Government will take the following
actions: (i) assess the needs for vocational skills, and revise and/or develop plans aimed at
enhancing the capacities o f stakeholders (Ministry o f Labor, NGOs, civil society organizations,
and workers' and employers associations); (ii) equip and finance the structures responsible for
promoting employment; (iii) organize information and training workshops on jobs; (iv) establish
an ongoing national database on employment and poverty; (vi) promote research and the
gathering and analysis o f data on employment and poverty; and (vi) create an environment
conducive to institutional vitality.
80
324. Expand pro-poor job opportunities and income-generating activities on an
equitable basis. The Government's efforts will be focused on: (i) development of various
the
subsectors, in particular in the areas of agriculture, rural development, construction, and the
environment, with a view to improving skills to create greater possibilities and equal opportunities
for men, women, and youths to find suitable employment; (ii) promoting cooperative
entrepreneurship, including formulation of the program to create decent rural and peri-urban
employment and self-employment; (iv) promote labor-intensive approaches and methods, and
disseminate them to the administrations, in particular in the context o f executing reconstruction
works and sectoral projects; (v) introduce microcredit for financing micro, small, and medium-
sized enterprises; (vi) promote employment and vocational training, including by establishing
training, education, and employment programs and projects in favor o f disadvantaged groups,
adapted to the needs o f the group (youth, women, the disabled, etc.); and (vii) strengthen the
partnership with the private sector.
325. Strengthen the existing social protection systems and extend them to workers in the
informal economy and their families. The Government undertakes to take the following actions:
(i)reformo f the current social security systemby developing the legal framework for operation o f
mutual associations and encouraging decentralized and innovative social security systems; and
(ii)promotion o f professional security and health coverage for vulnerable workers, in particular
those engaged inthe agricultural sector andthe informal economy.
Pillar 3: Improve access to social services and reduce vulnerability
326. After thirty years o f conflicts and poor governance, the social situation inthe DRC, like
its economy, i s in the doldrums. Indeed, the systems for health, education, and access to drinking
water and a healthy environment, when coupled with nonexistent social protection, mandate
energetic, urgent, and balanced actions. The rehabilitation o f basic infrastructures and the
restoration of quality services to a growing population call for the establishment o f an aggressive
policy in the sector in partnership with community organizations, NGOs, religious groups, and
civil society, which are already extensively involvedinthis sector.
327. The Government's objective in this area i s to restore and exceed by 2015 the
performance levels achieved before the crisis. Forthright steps must be taken in particular in the
areas o f education, health, socialprotection, water supply, and sanitation.
328. Access to basic services should be considered from a twofold perspective: the
availability o f high quality services, and effective access to those services within the limit o f the
financial possibilities or purchasingpower o f the beneficiary population groups. The actions to be
taken by the Government and its partners will address these dual requirements. Of necessity, this
entails the establishment o f suitable social safety nets infavor o f the poorest.
3.1. Education
329. The general objective pursued in this sector i s to establish, inthe short term, a legal and
regulatory framework conducive to achieving the Millennium Development Goals (MDGs). This
basically entails revision o f the framework law on national education which proclaims free and
mandatory basic education, and the State's obligation to ensure on a priority basis its operation, a
strengthened public-private partnership, the decentralizationo f management, and language policy,
as well as components associated with social linkages and ethics.
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330. To this end, specific actions are envisaged for universal primary education, secondary
education, higher and university education, nonformal education, and the streamlining and
strengthening o f educationalsystem management.
3.1.1. Universalprimary education
331. The objective i s to increase the gross enrollment ratio from 64.1 percent in 2006 to
80 percent in 2008 and to 100 percent by 2015. Interms of equity, the aim will be to reduce the
enrollment gap between boys and girls by half.25 It will also be necessary to determine the
associated measures that can simultaneously improve the enrollment profile and internal
efficiency inprimary education.
332. Universality and equity. The Government intends to take the following actions:
(i) adjustment and systematic application of class size o f 40 pupils;26(ii) systematic practice o f the
dual-shift system in urban and peri-urban areas; (iii) use o f the multi-grade system in rural areas
beginning inthe 2008/2009 academic year; (iv) annual rehabilitation of 10 percent o f classrooms,
and outfitting them with school furniture;27 (v) organization and development o f special programs
at the primary school level for children who have never attended school or who dropped out
before the fourth grade; (vi) organization o f apprenticeships and vocational training for youths
who have not attended school so as to integrate them into production channels; (vii) introduction
o f local languages as the language o f instruction at the basic level, with appropriate adjustments in
the methodology for assessing educational gains; (viii) gradual reduction o f the school fees paid
25The gross enrollment ratio of girls is expectedto increasefrom 56.2 percent in2006 to 75.6 percent in2008. Inturn, the gross
enrollment ratio ofboys would rise to 83.9 percent in2008 as compared to 72.3 percent in2006.
*'
26EFA Action Plan, p. 46.
DRC Ministry of Primary and Secondary and Vocational Training (EPSP), Anriuuire stutistique [statistical yearbook], 2001-
2002, Table 6, Kinshasa, August 2005.
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by families; and (ix) continuation of the information and awareness campaign to familiarize
parents and communities o f the benefits o f educating all children incooperationwith development
partners.
333. Quality. The regulatory and instructional measures envisaged to improve system quality
and achieve these objectives include: (i) strengthening the instructional supervision o f teachers by
recruitingadditional teachers;" (ii) establishing school canteens (nutritional aid); (iii)distributing
basic textbooks to pupils; (iv) building capacities through continuing training and retraining of
teachers; (v) providing furniture to the schools; and (vi) providing instructional materials to all
public primary schools.
3.1.2. Secondary education
334. The objective i s to broaden the base of secondary school to enable more students to
complete eight years of study, restrict access to the second cycle, and improve the quality of
instruction. The gross enrollment ratio (and principally that o f girls) i s expected to increase from
23 percent to 33 percent by 2015, thanks to the following actions: (i) maintenance o f the current
rate of transition from primary school to the first cycle o f secondary school, so that all children
can receive eight years o f schooling; (ii) improvement in the school guidance system so as to
identify individual potentials and focus on tappingthem fully later on; (iii) refurbishment
gradual
o f 4,936 classrooms beginning in 2007, at the rate o f 25 percent a year; (iv) an increase in class
size from 30 to 40 pupils per class to make it possible to reduce gradually the number of
secondary schools and thereby to free the resources needed to improve the physical environment
o f the facilities; (v) reduction in the grade repetition rate from 20 percent to 16 percent by 2008
and 10 percent by 2015; and (vi) the development o f technical and vocational education to train
skilled midrange supervisors.
3.1.3. Higher and university-level education
335. The objective is to provide quality education to all students of the universities and
advanced institutes, to promote research and development in order to match scientific and
technological training with the socioeconomic requirements of the company, and to identify
priority subsectors to be professionalized. The main activities planned to this end concern:
(i) adaptation of the supply o f education to social demand, taking the socioeconomic realities o f
the country into account; (ii) a 30 percent increase inrural girls' access to higher and university-
level education by 2015; (iii) construction o f five universitycampuses by 2015 (JSindu, Mbuji
the
Mayi, Goma, Kabinda, and Mbandaka) and the rehabilitation o f the existing universities and
advanced institutes; (iv) utilization o f access to higher education through distance learning;
(v) awarding selective scholarships to enable the children o fpoor families, and especially girls, to
gain access to advanced studies; (vi) increase in the number o f qualified faculty, in accordance
with a continuing and doctoral training plan; (vi;) improved working conditions for academic and
scientific staff; (viii) improvement by 2008 in the scientific and administrative supervision ratio;
and (ix) introduction o f a credible instruction quality control system.
3.1.4. Non-formal education
336. Literacy training. The Government undertakes to develop a national literacy training
policy with the objective o f significantly reducing the gap between the literacy ratios o f men and
women by 2015.
** Thelatter must be compatible with the pupil/teacher ratio.
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337. Apprenticeship and vocational training of youths who have not attended school.
The objective i s to significantly reduce, by 2015, the proportion o f children (and especially o f
girls age 8 to 14) who are outside the formal schooling system. To meet this objective, the
Government undertakes to organize and develop special primary school programs benefiting
children who have never attended school or dropped out before the fourth grade. This will make it
possible to improve the basic education enrollment ratio. In addition, efforts will be needed to
organize apprenticeships and vocational training for youths outside the formal system with a view
to integratingthem into productive activities.
3.2. Health
338. The strategy for the recovery and revitalization o f the health sector involves the
rehabilitation and establishment of new health facilities (hospitals, health centers, pharmacies,
etc.) close to where people live, the development o f human resources through basic and in-service
training, improved working conditions for health personnel, the supply o f basic pharmaceutical
products, and the outfitting o f hospitals, healthcenters, and universityclinics.
339. Improving the health o f the people i s an objective for both economic and social
development and poverty reduction. To bring this about, the aim pursued is to provide high
quality primary health care to the entire population, and to vulnerable groups inparticular, and to
combat the major pandemics such as HIV/AIDS, malaria, tuberculosis, onchocerciasis, human
African trypanosomiasis, etc.
340. The outcomes anticipated thanks to improving the quality o f health services should
result ina reduction in infant mortality to 104 per thousand in 2007 and 98 per thousand in2008
from the 2006 level o f 111 per thousand. The maternal mortality level should also decrease by
2008 to 944 per 100,000 live births, as against 1,276 in 2006. The percentage o f assisted
childbirths i s projected to increase to 75.2 percent from the 2006 rate o f 61.6 percent. Finally,
vaccination coverage would improve to 40 percent in2008 as compared to 29.6 percent in2006.
341. To achieve this, the Government has decided in the short term to pursue three strategic
axes which may be summarized as follows: (i) development of health zones;
the
(ii)reorganization and institutional support o f the intermediary and central levels; and (iii)the
supply ofmedications and specific inputs.
84
3.2.1. Development of health zones
342. The primary focus o f the strategy for strengthening the health care system i s the
development o f health zones. This effort i s aimed at improving the functionality of hospitals and
health centers with a view to providingquality healthcare to the people.
343. The priority actions to be undertaken in the short and medium terms target: (i) the
development o f integrated leadership at the health zone level (supervisory team for each health
zone); (ii) promoting the development o f human resources; (iii) streamlining the operations o f the
health care facilities; (iv) improving the health care coverage o f the health zone as well as the
quality o f care; (v) promoting partnership with the grassroots communities in the implementation
of the health policy; (vi) financing health care services that are accessible to users; and
(vii) strengtheningthe intrasectoral and intersectoral partnership of the health zone by including
religious groups and the NGOs.
3.2.2. Strengthening at the intermediate level
344. Strengthening at the intermediate level i s dependent on the province- and district level
Medical Inspectorates. These entities will be equipped and rehabilitated in order to be able to
provide efficient supervision o f the health zones. The following actions are contemplated in this
connection: (i) definition o f the functions o f each o f the two levels; (ii) institutional support in
terms of rehabilitation and outfitting; and (iii)improvement o f the normative framework.
3.2.3. Streamlining at the central level
345. The need to bring priority health problems under control mandates streamlining at the
central level in order to enable it to play its normative role efficiently. The aim of the streamlining
effort will be to configure this level ina way that genuinely addressesthe needs identified outside
the capital as regards the operation of the healthzones.
85
3.3. Water supply and sanitation
346. The DRC must manage to mobilize its immense water resources, ensure that drinking
water i s safe, and distribute it to the people. Reconstruction o f the water and sanitation sector
constitutes one o f the highest priorities o f the Poverty Reduction Strategy (PRS). Such
reconstruction will be a particular focus of the Government so as to make available to the public a
daily amount o f water that meets norms andprovide a healthier living space.
347. The aims for the sector are to: (i) increase access to safe drinkingwater from 22 percent
o f the population in2005 to 26.9 percent in2008 and 49 percentby 2014; and (ii) increase access
to sanitation from 9 percent o f the population in 2005 to 15 percent in 2008 and 45 percent by
2015.29
348. Initially, the focus will be on rehabilitating existing infrastructures, facilitating the
broadest possible access, enhancing the capacities of water production units, improving the
management o f water points by promoting grassroots and private sector participation,
strengthening the existing sanitationprograms, and extendingthem nationally.
349. The activities to be carried out will include: (i) reforms in the water and sanitation
sectors; (ii)conducting inventories o f the water needs o f the urban and rural populations;
(iii) theWater andSanitationCode, withemphasis onthe issuesofintegratedwater
drafting
resource protection and management, definition o f the roles o f private operators inthe sector, and
clarification of areas o f action: large and medium-sized cities, small peri-urban centers, and rural
areas; and (iv) the creation o f a water and sanitation development fund.
350. Accordingly, in the medium term, the programs for the urban and peri-urban water
supply subsector for 2006-2015 include the following: (i) execution o f the REGIDESO Ten-Year
Plan and the Water Supply Master Plan for Kinshasa; (ii) opening the water supply and sanitation
sector to initiatives on the part o f civil society, private operations, the NGOs and other
associations, and the beneficiaries themselves; and (iii) implementation o f the Sanitation Master
Planfor the city o f Kinshasa.
351. Inperi-urban andruralareas, autonomous community-level management systemswillbe
established in the context of the decentralization and rural development policy, as will
participation by local civil engineering firms (SMIs). These policies will be buttressed by research
and the promotion o f appropriate technologies, alongside the dissemination o f best practices o f
grassroots management of autonomous installations. A plan for the gradual introduction o f
borewell units inthe 26 provinces will be studied with a view to speeding the access of residents
inoutlying areasto safedrinkingwater.
29Projection o f the indicators inthe sector is a function o f the cycle o fthe sectoral projects, which runfrom three to five years. It is
therefore difficult to predict improvement in the indicators before the end o f the period under review. Consequently, it may not
be possible to observe the effects o f the strategy until 2009 and thereafter.
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352. A training program will be developed inorder to enhance the operational capacities of
technicians in the sector as well as health personnel from the zone, including sanitary engineers,
extensionpersonnel, and small operators inthe sanitationfield.
353. In order to promote the participation of the people in creating and managing water
supply infrastructures, a water and sanitationdevelopment fundwill be created.
354. In the sanitation subsector, the focus will be on: (i) equipping and establishing
commune- and territorial-level sanitation squads under the National Sanitation Program (PNA);
and (ii) promoting the participation o f women in management and decision-making in the
preparation o f the development programs of the water and sanitation sector inrural areas.
3.4. Urban poverty
355. The strategy for urban poverty reduction will entail linking the urbanization o f the city
with the provision of quality basic services (health care, education, drinking water, electricity,
sanitation, decent housing, etc.).
356. The aim of the DRC inrespect o f urban planning i s to overcome the housing shortage in
the country's major urban centers, and is part andparcel of the poverty reduction effort andwork
to achieve the MDGs. Itwill also entail associating urbanplanning with basic social services.
357. To achieve this, the Government has decided to pursue three strategic axes which may
be summarized as follows: (i) improving the living conditions o f city dwellers by ensuring:
(ii)improved urban management and increased accountability and transparency, with particular
emphasis on: (iii) rectifying the shortage andpoor quality of housing.
3.4.1. Improve the living conditions of the urban population
358. The following actions are contemplated: (i) reduction o f the shortage o f roads; (ii)
access
to decent housing on the part o f the people; (iii) evacuation and treatment o f solid and liquid
waste; (iv) evacuation o f household waste water; (v) public education and awareness-raising on
public healthproblems; (vi) improving supply conditions bybroad coverage o f supply points.
3.4.2. Improving town planning and enhancing accountability and
transparency
359. The following actions are advocated: (i) effective tax sovereignty o f urban areas;
(ii)organization o f municipal tax collection; (iii)increasingthe accessibility o f transport services;
(iv) increasingthe number of social facilities; (v) organizing and supervisingthe informal sector;
and (vi) the production of new town planning for the major and medium-sized urbancenters.
3.4.3. Overcome the shortage and poor quality of housing
360. The following actions are advocated: (i) restructuring o f the housing sector and the
development of new sites (Ministry of Urban Planning); (ii) o f legal and regulatory
drafting
provisions on leasing; (iii)creation o f a housing bank and introduction of a system o f bank credit
for housing promoters and real estate developers, etc.; (iv) quantity and quality housing
production by 2030 (MDG 7: bullet 11); and (v) enhancing the viability ofurban lots.
3.5. Social protection
361. The policy objectives in the social protection sector are to: (i) improve the social
standing o f vulnerable persons; (ii) facilitate the access o f all to basic social services;
(iii)
implement wealth creation programs adapted to the situations of the various target groups;
and (iv) promote development at the grassroots level.
362. Accordingly, the Government's priority actions will be focused on four target groups,
namely: (i) women and vulnerable children; (ii) disabled persons; (iii) elderly; and
the
(iv) displacedpersons andrefugees.
363. Vulnerable women and children. The following actions will be carried out:
(i)effective implementation o f the sector policy as regards the United Nations agreements on the
protection o f child victims of the conflict and HIV/AIDS; (ii) improvement inthe socioeconomic
conditions o f the families o f vulnerable children; (iii)
reintegration o f vulnerable children into the
formal or non-formal education channels; (iv) socioprofessionalreintegrationo f female and child
heads o f household; (v) food and nutritional support o f families with vulnerable children;
(vi) rehabilitation of malnourished children; (vii) targeted support for children with life-
threatening disabilities and for their education; and (viii) assumption o f the psychosocial, medical
and health-related, legal and judicial concerns of victimized children and those born of sexual
violence, as well as o f their communities.
364. Disabled persons. The following actions are contemplated: (i) establishment o f a
national and grassroots-based readjustment program; (ii) improvement inthe economic and social
standing o f disabled persons, and combating the prejudices against them; (iii) promotion of
education and training for the disabled; and (iv) improvements in the health and mobility
situations o fpersons with disabilities.
365. The elderly. The following actions are contemplated: (i) improvement in the care
system for the elderly; (ii) promotion of vocational retraining for retirees; and (iii) o f
offers
guaranteed physical and spiritual growth of the elderly.
366. Displaced persons and refugees. The activities to be carried out will include: (i) the
return and/or reintegration o f harmed individuals; and (ii) socioeconomic rehabilitation of harmed
persons. A National Commission for the Rehabilitation of Victims (CNRS) will be established for
this purpose.
aa
367. In general, the State will encourage and support the implementation of formal and
informal social safety nets, especially promoting access to mutual health associations and other
solidarity-driven structures. These actions will be taken while continuing the recommended
reforms in respect of: (i) the national strategy for social protection o f vulnerable groups;
(ii) inclusion strategies for development policies and programs; and (iii)
gender combating
violence against women and girls.
3.6. Culture, science, and access to universal technology
368. The Government's vision in this sector involves: (i) instilling a culture of good
citizenship and democracy with regard to the collective well-being, reflected inthe pursuit of the
general interest, the hallmark o f sustainable development; (ii) guaranteeing freedom of
expression, leading to good governance that promotes social mobilization in support of
development objectives in order to ensure the flourishing o f democracy through broad
participation by the public in management o f the commonweal; (iii) achieving complete national
coverage by the basic post and telecommunications services, supported by a high-performance
industry in new service areas, particularly the spread o f the internet in secondary schools and
universities; and (iv) making use o f appropriate technologies and the positive externalities of
globalization to addresspoverty reduction issues.
369. The Government will emphasize the establishment o f an environment conducive to the
flourishing o f Congolese music and art, and to the promotion o f science and technology as the
underpinningand vector for sustainable development.
370. The strategic axes defined to this end are: (i) providing the Culture, Science and
Technology, Press and Information, and Post and Telecommunications sectors with legislation
and organizations that are consistent with the sociopolitical development of the country;
(ii)extending the national coverage o f basic services; (E)eliminating backward thinking and
customs with respect to the image o f women; (iv)protecting intellectual property rights and
copyrights and establishing an active partnership with the private sector, civil society
organizations, and the international community; (v) establishing the infrastructuresneeded for the
development o f research and for the expression and expansion of the musical sector; and
(vi) financially andtechnically supporting researchers, artists, andmusicians.
Pillar 4. Combat HIWAIDS
371. The HIV/AIDS epidemic in the DRC has a prevalence of 4.5 percent, or 2.6 million
persons, in 2004. This worrisome situation i s further reflected inthe 14-19 year age group, where
the incidence i s 3.6 percent, or 2 percentage points higher than the WHO norm (1.6 percent).
372. Cognizant o f this finding, the Democratic Republic o f the Congo undertakes to fight a
relentless battle against the pandemic so as to protect its population and persons infected and
affected by HIV/AIDS. The objective i s to contribute to the country's developmentby slowing the
spread o f HIV and reducing its impact on individuals, families, and communities in the overall
context o f poverty reduction. More specifically, the efforts to be carried out over the next three
years will be focused on stabilizing the trend o f the epidemic, improving the living conditions o f
PLWHAs, and attenuating the impact o f the epidemic on development.
373. The specific objectives identified are to: (i) reduce the transmission rates o f HIV and
STIs among the people, particularly among women and youths; (ii) up treatment and
speed
improve the quality o f life o f persons living with HIV/AIDS; (iii)attenuate the negative
socioeconomic impact o f HIV/AIDS on individuals, families and communities, and strengthen the
89
mechanisms for coordinating all stakeholders andpartners involvedinthe fight against HIV/AIDS
as well as the monitoring and evaluation o f the activities carriedout.
374. The interventions concern the population in general, and, in particular, the vulnerable
and at-risk groups such as: women, youths, sex workers, men inuniform, truck drivers, air carrier
employees, traffickers and artisanal miners in precious substances, displaced persons, and those
more vulnerable to infection. Particular attentionwill be devotedto the vulnerability factors which
expose the target groups to STIs and to HIV/AIDS. Holistic care interventions and impact
attenuation efforts will target PLWHAs and affectedpersons (widows, orphans, etc.).
375. To reduce and control the propagation o f HIV/AIDS, the Government will establish an
aggressive policy for the sector, with its core focus on prevention. The aim will be to reduce the
rate of transmission among all parts o f the sexually active population. Prevention also includes
mother-to-child transmission. The other axes o f the strategy pertain to: (i) speeding up treatment
and improving the quality o f life o f persons living with HIV/AIDS; (ii) attenuating the
socioeconomic impact o f HIV/AIDS on the community and on persons infected and affected by
HIV/AIDS; and (iii) strengthening national coordination as well as monitoring and evaluation at
all levels.
4.1. Prevent and stabilize the transmission of HIV and STls
376. The interventions envisaged are: (i) mobilization o f communities to convince them to
change behavior in respect of vulnerability factors (prostitution, failure to use condoms, early
sexual relations, etc.); (ii)
promotion of counseling and voluntary screening to enhance awareness
o f individual vulnerability and early care o f PLWHAs; (iii) proper treatment o f cases o f sexually
transmitted infections to reduce HIV transmission factors; (iv) prevention o f mother-to-child
transmission o f HIV; (v) condom programs (social marketing and targeted distribution) among
vulnerable groups; (vi) enhanced access by adolescents and youths to information on HIV/AIDS
prevention; (vii) safety with transfusions for the prevention o f HIV through the establishment of
blood transfusion centers in the major population centers and blood banks in the hospitals; and
(viii) reduction of the risks of HIV transmissionby the distribution o f Post-Exposure Prophylaxis
(PEP) kitsto women, and particularly to victims o f sexual violence.
4.2. Speeding treatment and improving the quality of life of persons living
with HlVlAlDS
377. The focus in this regard will be on developing the capacities o f the personnel and
structures providing medical and psychosocial care for persons living with HIV, this through:
(i) strengthening laboratory capacities to diagnose HIV infection and the opportunistic infections
associated with AIDS; (ii) buildinglaboratory capacities with regard to the biologicalmonitoring
o f persons being treated with ARV medications; (iii) treating eligible PLWHAs with ARVs;
(iv) covering the medical treatment o f opportunistic infections; (v) training care givers in the
treatment o f PLWHAs; and (vi) training personnel to improve adequate and professional
psychosocial care of PLWHAs.
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4.3. Attenuate the socioeconomic impact of HIWAIDS on the community
378. The following actions are advocated: (i) support for the complete assumption o f care
costs for orphans and vulnerable children (education, medical costs, food supplements);
(ii) forthefoster familiesoforphansandvulnerablechildren(socioeconomic support);
support
(iii)combating social stigma and discrimination; (iv) inclusion o f the fight against HIV/AIDS at
the workplace and in the school/academic environment; and (v) improving the legal framework
for the protection o f PLWHAs.
4.4. Building the coordination and monitoring and evaluation capacity at all
levels
379. Strengthened coordination of the implementation o f the HIV/AIDS strategy i s an
essential condition for the concerted implementation o f the priority axes and actions identified.
The existence o f multiple stakeholders in the sector suggests the need for a concentration
framework and dynamic planning around objectives and action plans agreed with all the partners
concerned. The Government will do everything it can to revitalize the National Multisectoral
Commission to Combat AIDS (CNMLS) so that it can provide renewed leadership for the
implementation of the strategy. Inaddition, the National Multisectoral Program to Combat AIDS
(PNMLS) will need to play its true coordination role, fulfilling the spirit and the letter o f the
mandate it has received in the fight against HIV/AIDS. The PNMLS will need to establish an
environment conducive to concertation, planning, financing, executing, andmonitoring/evaluating
the program to combat HIV/AIDS in synergy with all the other stakeholders inthe sector, so as to
achieve the objectives set for programs and to avoid duplications while maximizingresources.
Pillar 5: Promote local initiatives (dynamique communautaire)
380. The 40 years o f conflict and poor governance, together with the glaring absence o f
decentralized State structures, have created a void that grassroots organizations have filled in
order to ensure the survival o f communities through income-generating activities, support for the
financing o f education, and the creation of health associations and solidarity groups. The
participatory grassroots consultations corroborated this finding and reaffirmed the desire o f
grassroots organizations to participate here and now in the management o f the commonweal,
poverty reductionprograms, and economic recovery.
381. The Government i s well aware of this new climate and o f the need henceforth to involve
grassroots organizations in the process of consolidating peace and economic development inthe
country, and i s firmly committed to promoting this community dynamic, which has been inscribed
as one of the key pillars o f the PRGSP for its implementationat all levels.
382. The decentralization policy espoused by the State reflects the Government's will to
create the optimum conditions for organized participation by grassroots organizations in the
definition o f sectoral policies, the planning of the poverty reduction programs which concernthem
directly, and the implementation o f those programs.
383. The general objective o f such grassroots participation i s to achieve decentralized
implementation o f the poverty reduction strategy at the local government level, thus making
ownership o f the strategy more likely.
384. The specific objectives to be achieved in the short, medium, and long terms are: (i) the
participation o f grassroots organizations in planning and decision-making; (ii) the promotion,
emergence, and legal recognition o f community development organizations; (iii) strengthened
intervention capacities on the part o f the community development organizations: project planning,
91
management, and monitoring and evaluation; and (iv) strengthened capacities for supporting
grassroots initiatives, with particular attention to the initiatives o f women and youths.
385. To achieve this, the Government plans to include in its decentralization policy, and in
the preparation o f socioeconomic development programs and policies, practical modalities for the
organized and concerted participation of grassroots organizations. In addition, to bolster this
dynamic, the Government will introduce appropriate mechanisms for the financing o f community
development efforts (a community development fund).
386. The Government also intends to tap the positive experience o f the MIDA program
(Migration for Development in Africa) o f the International Organization for Migration (IOM) so
as to promote the transfer o f skills and resources (both intellectual and financial) from the national
diaspora to benefit the country in general, and the local initiatives in particular. To this end, a
National Migration for DevelopmentProgram will be initiated.
92
pter 4: IrnpIernentatEan, Monitorin
of the PRS
93
4.1. Basic principles
387. Being aware o f the major role the PRGSP must play as a beacon for developmentpolicy
over the next 25 years, the Government regards the steering and control system for its
implementation, monitoring, and evaluation as one o f the key factors in the success o f the
Strategy. Accordingly, this system must be built around instruments and mechanisms that are
neutral and clear, and adapted to the multisectoral and multidimensional nature both of the
poverty reductionprogram and o f the post-conflict context o f the country.
388. For these reasons, the implementation o f the Poverty Reduction Strategy must adhere to
two basic principles, those o f efficiency and effectiveness. The principle o f efficiency calls upon
the Government and all stakeholders to undertake efforts to consolidate the bases for sustainable
economic growth focused on a cohesive macroeconomic framework. The principle o f
effectiveness i s associated with observance o f the notions o f proximity, making it happen,
transparency, and speed, which can guarantee the success o f the implementation, monitoring, and
evaluation o f the Strategy.
389. Proximity mandates that the decision-making related to the implementation o f activities
under the Poverty Reduction Strategy take place as close as possible to its beneficiaries. To this
end, the Government will encourage the emergence o f civil society organizations, district-, zone-,
village-, and neighborhood-level Development Associations which constitute genuine
springboards o f initiatives so that the beneficiaries o f poverty reductionprograms and projects are
involvedinall decisions concerning their communities.
390. Making it happen means that the Government recognizes that implementation o f the
Poverty Reduction Strategy i s not just a matter for official institutions, but also involves local
governments and stakeholders from civil society, the private sector, and the NGOs.
391. Transparency requires the establishment at the various levels o f intervention o f a range
o f mechanisms which guarantee the trackability, visibility, and control o f investments. This will
be ensured through the media, the publication of reports on the financing status of poverty
reduction programs, and the participation o f beneficiaries in the process o f monitoring public
expenditure.
392. Speed calls for the adoption o f procedures which ensure rapidity and transparency in
disbursements and in contract awards and execution. Consequently, the public procurement
structures will be restructured, reorganized, deconcentrated, and decentralized.
4.2. Implementation
393. Some o f the actions involved in implementing the PRGSP are already underway.
Noteworthy in this connection are the reforms undertaken with support from the development
partners, particularly at the level o f the sectoral programs and the policies associated with
administrative, economic, legal, and social governance. Efforts are also being carried out in the
context o f demobilizing ex-combatants and reintegrating them into civilian life.
394. PRGSP execution will be the responsibility of each sectoral ministry concerned, each in
its own area, in partnership with other development partners such as NGOs, the private sector,
civil society, and religious groups. These partners will also be involved in carrying out actions in
their own areas and sectors o f intervention at the national, provincial, and local levels.
94
395. Implementation o f the PRGSP requires a strengthening o f the institutional capacities of
the State and its nongovernmental partners (NGOs). This capacity-building o f the public and
private structures involved in PRGSP implementation will be carried out in the context o f the
actions programmed in Pillar Io f the national strategy on good governance, on the assumption
that they are efficiently carried out.
4.3. Monitoringand evaluation
4.3.7. Monitoring of the PRGSP
396. Implementation o f the Strategy also requires the establishment o f an ongoing monitoring
system for each of the strategic intervention axes adopted.
397. This implies inparticular that: (i) requisite financing i s available for carrying out the
the
priority actions identified; (ii) planned actions are carried out satisfactorily over time; and (iii)
the
actions not performed or overdue are periodically reviewed andcorrected.
398. Monitoring is aimed at: (i) assessing the progress made over time in respect o f specific
groups and rural areas; (ii) gathering information needed to study the factors which determine or
prevent outcomes; (iii) providing decision-makers with information gathered by the statistical
services, technical ministries, and beneficiaries themselves about the effectiveness or
shortcomings o f the measures taken and the corrections to be made inorder to achieve objectives.
This monitoring will be performed with the help of monitoring indicators identified in advance
and approvedby all participants inthe process.
399. The sources of quantitative data in this connection are: (i) administrative data and data
from other institutions; (ii) the population census; and (iii) various household surveys, namely
the
the consumption budget surveys (1-2-3), the Demographic and Health Survey (EDS), specialized
surveys to gamer observations and determine satisfaction, as well as targeted and thematic
surveys.
400. Qualitative data are focused on the following aspects: (i) priorities attached by the
the
poor to improving their situation, broken down by gender and other important characteristics o f
the grassroots community; (ii) the perception of the poor as to the causes and consequences o f
poverty; (iii) the opportunities that the poor have to improve their lot; (iv) the constraints and
obstacles to be overcome inorder to improve the situation o f the poor; (v) the differences between
localities, districts, urban centers, and rural areas; and (vi) the perceptions o f the poor regarding
access to and the quality of services, infrastructures, and governance at the locallevel.
4.3.2. PRGSP evaluation
401. Evaluation of the Strategy will entail comparing the results obtained with the objectives
initially set, explaining any gaps which may occur, and proposing corrective measures. It will
contribute to improve the effectiveness o f programs/projects and policies by providing
infomation andproposing adjustments and improvements.
4.4. Implementation,monitoring,and evaluation mechanisms
402. The PRGSP i s the sole frame of reference for devising investment programs and sectoral
developmentprograms. It will exert a positive influence on the various planning instruments at all
levels (national, provincial, and local). The implementation, monitoring, and evaluation of the
PRGSP are closely tied to the effectiveness and efficiency indicators. The effectiveness indicators
are associated with the institutional framework and structures, whereas the efficiency indicators
95
are oriented toward strict adherence to the macroeconomic framework defined in Pillar I1o f this
poverty reduction strategy.
4.4.I. Institutional framework for implementation, monitoring, and
evaluation
Coordinationof Permanent technical evaluationunit
focal points
I Provincialcoordination
Monitoring/
SectoralPRSP Permanent technical evaluationunit
focal points
evaluationunit
I I
Local coordination
4.4.2. Implementation, monitoring, and evaluation bodies
403. The cohesive implementation o f the poverty reduction strategy in the DRC i s structured
inaccordance with the new organization of the State and the empirical structures established for
its preparation at boththe national and decentralized levels
A. National level
The establishment of PRGSP executionandmonitoring/evaluationstructures shouldtake account o f the
current institutional mechanismsfor the implementationofmacroeconomic andsectoral programs.These
are the Interministerial CommissionResponsible for Formulation of the PovertyReductionStrategy(CI-
SNLCP), chairedby the Minister of Planning, andthe Interministerial CommitteeResponsiblefor
96
MonitoringProgramsConcludedwith InternationalFinancialInstitutions (CISPI), chairedby the Minister
o fFinance. Their roleswill be extendedand adaptedto the requirementsof PRGSP implementati~n.~'
A.1. PrimeMinister
404. Implementation will be under the overall authority o f the Prime Minister, Head of
Government. He will have the primary task o f instilling the aggressive and dynamic policies
necessary for achieving the overarching objectives o f economic recovery and poverty reduction in
keeping with the objectives the Government has set inline with Vision 26/25 and the Millennium
Development Goals (MDGs).
405. The Prime Minister i s the Chair of the Interministerial Commission on Implementation
o f the National Poverty Reduction Strategy. He i s assisted by three Vice Chairs: the Minister o f
Planning, the Minister of Budget, the Minister ofFinance, and the Minister of Interior.
406. He calls and presides over the quarterly meetings o f the Interministerial Commission to
take stock o f (i) the implementation status o f the strategy; (ii) elimination o f constraints
the
which might impede the implementation process; and (iii) any disciplinary measures which may
prove necessary.
A.2. Ministry of Planning
407. The Ministry o f Planning deals with the physical execution o f the PRGSP in close
coordination with the sectoral ministries, the development partners, civil society organizations,
NGOs, and the private sector. It is the guarantor of the establishment o f sectoral policies within
each ministry and o f the economic recovery and poverty reduction programs and projects in
partnership with all development stakeholders. Inthis context, it works closely with the national
coordination structure for PRGSP implementation that is under its purview. The Ministry o f
Planning is also responsible for coordination with the development partners in connection with
PRGSP implementation. In this capacity, it periodically reports to them to take stock o f the
progress made and problems encountered. In addition, the Ministry o f Planning coordinates the
activities o f NGOs in respect o f development and establishes practical modalities for their
organized participation inPRGSP implementation, inparticular as regards local initiatives.
30Inits current configuration, the CI-SNLCP includes, inaddition to its Chair (Minister of Planning) andVice Chair
(Minister of Finance), thirty Ministers and Representatives: Interior, Decentralization and Security, Women and
Family Affairs, Justice, Human Rights, Press and Information, Budget, Economy, Industry, Small and Medium-sized
Enterprises, Mines, Energy, Civil Service, Agriculture, Rural Development, Scientific Research, Culture and Art,
Environment, Land Tenure Affairs, Urban Planning, Health, Higher and University Education, Primary and
Secondary Education, Labor and Social Insurance, Social Affairs, Solidarity and HumanitarianAffairs, Governor of
the Central Bank, Senior Advisor to the Head of State at the Collkge Economique et Financier, and the Executive
Office of the Three Vice Presidencies. The Vice Ministers of the above-named Ministerstake part inthe meetings of
the CI-SNLCP with the rightto participate in discussions and to vote.
97
A.3. Ministryof Budget
408. The Ministry o f Budget i s responsible for the budget programming and execution o f the
actions and projects selected under the MTEF with the sectoral ministries. Inthis connection and
incollaboration with the other CI-SNLCP members, it is responsible for execution of the budget
needed to finance the strategy. Itensures effective allocation to the sectors andpriorities identified
by the Government.
A.4. Ministryof Finance
409. The Ministry o f Finance ensures the financial execution o f the PRGSP and the
mobilization o f the own resources of the State and the external resources necessary for the
harmonious implementation o f the poverty reduction strategy. In this connection, it i s the
guarantor of compliance with the macroeconomic framework and the implementation o f the
associated economic and structural reforms.
410. In this connection, the Minister of Finance works in close cooperation with the
development partners, in particular with the international financial institutions such as the IMF,
World Bank, AfDB, etc. The Ministry o f Finance also works with the private sector inrespect o f
its essential role ineconomic recovery.
A.5. Ministryof Interior
411. The Minister o f Interior has primary responsibility for the file on the Decentralized
Administrative Entities. H e ensures the full involvement o f the deconcentrated and decentralized
administrations.
A.6. InterministerialCommissionon Implementationof the NationalPovertyReduction
Strategy (CI-SNLCP)
412. The CI-SNLCP i s chaired by the Prime Minister assisted by the Ministers o f Planning,
Budget, Finance, and Interior. Itperiodically takes stock of the physical and financial execution of
the PRGSP in collaboration with the national coordination structure. To this end, it validates and
approves the programs and action plans for implementation o f the strategy in keeping with the
budget timetable, prepares the semiannual PRGSP progress monitoringreports, and deals with the
periodic adjustments to be made to the poverty reduction strategy.
413. The commission works in synergy with the Prime Minister, Minister o f Planning,
Ministry of Budget, Minister of Finance, and Minister of Interior in the context of its periodic
consultation sessions with its members in order to impart consistency to the poverty reduction
policies, programs, and projects at the national and decentralized levels. A special attention will
be paidto taking gender issues into account and gender-aware participation inthe commission.
A.7. Nationalcoordination structure
414. As a support structure and technical organ of the CI-SNLCP, the national coordination
structure i s the Government's focal point as regards the implementation and monitoring o f the
poverty reduction strategy. It i s a nimble structure for consultation, partnership, coordination,
information, education, and communication (IEC) which assists the PRGSP implementation and
monitoringlevaluation processes. In this regard it plays a key role as intermediary between
governmental structures, bilateral and multilateral development partners, civil society, NGOs,
religious groups, andthe decentralized development structures at the local level.
415. I t s missions are to: (i)
monitor the conduct of the reforms called for inthe sectoral and
thematic strategies; (ii) monitor the action plans for implementation o f the PRGSP and the
communication strategy; (iii) ensure the harmonization of the strategies o f the external partners
and those of the PRGSP; (iv) promote coordination among the various stakeholders at the sectoral
levelinPRGSP implementation; (v) strengthen the participatory process indevelopmentplanning,
decision-making, and monitoring and evaluation at all levels; (vi) establish a capacity-building
program for civil society, the national NGOs, and the local development organizations; (vii)
produce quarterly, semiannual, and annual reports on PRGSP implementation and disseminate
them widely; and (viii) sponsor evaluations inareas of interest to it, such as: participation, local
initiatives, andbest practices to leverage experiences.
416. To this end, the coordination office works in synergy with the focal points in the
technical ministries, civil society, NGOs, private sector, and sectoral development partners in the
spirit ofpartnershipwhich prevailedduringpreparation ofthe PRGSP.
A.8. NationalStatistics Institute (INS)
417. In partnership with the national coordination structure and with the research and
planning directorates o f the technical ministries involved in the PRGSP, in particular the
Ministries o f Planning, Finance, and Budget, the National Statistics Institute i s responsible for the
establishment o f the monitoring and evaluation policy and programs o f the PRGSP. At regular
intervals, the National Statistics Institute will monitor the major statistical operations such as the
national population census, the demographic and health surveys (EDS), the informal sector
survey, the household consumption budget survey (1-2-3 Survey), the surveys on the status o f
women and children (MICS), the agricultural surveys, and the gathering and processing o f data
for the national file on administrative entities. Itwill create a databank o f files from these surveys
and use that databank to produce poverty indicators. It i s also responsible for monitoring the
collection o f data fiom the producers o f sectoral statistics, inparticular the Research and Planning
Directorates of the various ministries.
418. Itwill work incoordinationwith the internationaldevelopment agencies interested inthe
statistics sector, and will seek technical, material, and financial support with a view to improving
the quality o f the data produced. The technical support will focus primarily on the introduction o f
efficient data gathering methodologies, the development o f data gathering support mechanisms,
and the training o f human resources at the central, provincial, and local levels. The National
Statistics Institute will ensure the broad distribution o f quantified information needed for the
monitoring and evaluation process o f the poverty reduction strategy, using appropriate means
includingthe PRGSP website. Itwill regularly publishpoverty analyses for the DRC.
A.9. The poverty observatory, a surveillance structure
419. The poverty observatory, known as the Congolese Poverty and Inequality Observatory
(OCPI), is an independent structure attached to the Ministry of Planning. Itworks in synergy with
the national coordination structure for PRGSP implementation. Its partners include the research
and planning directorates of the technical ministries, civil society organizations, religious groups,
the media, NGOs, research centers and academic and scientific institutions, the private sector,
opinion leaders, labor unions, community development organizations, and the development
partners. Iti s responsible for evaluating poverty inthe DRC.
420. I t s key tasks are: (i)periodically evaluating the evolution o f poverty as it relates to the
execution o f the relevant programs andprojects under the PRGSP; (ii) developing the instruments
and methodologies needed for this evaluation; (iii) creating a coordination and partnership
99
framework in particular with the INS, the DEPs, and the development partners with a view to
evaluating the level o f poverty by means o f statistics which capture and describe the status o f
poverty; (v) evaluating the impact o f poverty reduction policies and policies aimed at achieving
the MDGs; and (vi) informing policies on the evolution of poverty, writing reports on the
phenomenon, and disseminatingthem widely.
B. Decentralized level
421. The structures at the provincial level (Provincial Poverty Reduction Committees-
CPLPs) and the local level (Local Poverty Reduction Committees-CLLPs) serve, in the context
o f the decentralization policy and continuation o f the participatory process initiated during
PRGSP preparation, as relays in the mobilization and participation o f grassroots communities in
PRGSP implementation.
4.4.3. Implementation partnership
4.4.3.1. Partnershipwith civil society and NGOs
422. Civil society organizations will be present at the various stages o f monitoring and
evaluation. More particularly, they will monitor the activities programmedand express their views
on the evolution o f the process. To strengthen the monitoring and evaluation mechanisms among
final beneficiaries, the participatory process already in operation through the PRGSP working
groups, including the NGOs, the private sector, and civil society organizations, will be
consolidated.
423. Thanks to the information network that will be developed between the national
coordination structure and these organizations, the people organized in ADQs and ADVs will be
an important link in the chain to ensure that the physical execution o f projects corresponds to
financial execution and that deadlines are observed.
4.4.3.2. Partnershipwith donors
424. In its role as the sole development planning framework inthe DRC and indispensable
reference for all, the PRGSP also constitutes a special tool for strengthening partnership between
the Government and its development partners. To this end, a new dynamic will be initiated,
aiming at the development of new instruments and modalities and improved coordination of
development assistance.
425. Accordingly, inselecting the assistanceprovided to the DRC, the Government will place
special emphasis on the priority actions defined in the PRGSP and consolidate the concertation
framework introducedto that end. Such a partnership should contribute to a significant increase in
official development assistance, the rational and efficient management o f resources, and improved
impact o f programs andprojects on growth andpoverty reduction.
4.5. Monitoring and evaluation indicators
426. The Government intends to establish a participatory monitoring and evaluation
mechanism that functions both horizontally (participation o f all partners) and vertically
(participation o f all levels, from the base to the summit). It considers such a mechanism as the
only approachable to closely associate all the stakeholders inpoverty reduction. Inthis context, it
will put in place an information system with three components, namely execution monitoring,
impact monitoring, and Participatory Monitoring and Evaluation (SEP).
100
427. The national structure for coordination and implementation o f the PRGSP i s responsible
for implementation, monitoring, and evaluation incollaboration with the other stakeholders inthe
process, and will clarify the execution timetable for the actions under the PRGSP upon its
approval by the Executive Boards o f the IMFand World Bank.
4.5.7. Execution monitoring
428. Execution monitoring concerns the physical and financial performance of all the projects
and programs identified in the Strategy, for which two types o f indicators will be calculated in
order to measure execution: (i) resource indicators (financial and physical) measuring the
resources provided by the public authorities and donors, such as expenditure for education; and
(ii) indicators o f operational outcomes, evaluating the operational outcomes obtained, such as the
number of schools constructed.
429. Execution monitoringwill be carried out with the sectoral administrations at the central
level, local government authorities, the private sector, donors and lenders, and the beneficiary
populations.
4.5.2. Impact monitoring
430. Impact monitoring entails analysis o f the evolution of poverty and the living conditions
o f the people. Two types o f indicators to measure the impact o f policies, projects, and programs:
(i) outcome indicators evaluating the final results in terms o f the objective pursued (for example:
gross enrollment ratio); and (ii) impact indicators measuring the consequences o f changes in
outcomes (for example: literacy rate) inkey dimensions o f the people's well-being.
431. Impact monitoring will be carried out by using a statistical program that permits the
monitoring o f relevant indicatorsthat canbe used for the periodic analysis o f changes inpoverty.
432. In light of Vision 26/25 and in consideration of its section on impact analysis, the
indicators on the Millennium Development Goals will serve as the basis for buildingthe statistical
program.
433. The selection, definition, degree o f disaggregation, and periodicity o f the indicators, and
the data collectionmethods used for calculatingthem, have emerged from broad consultations.
4.5.3. Participatory monitoring and evaluation (SEP)
434. The monitoring and evaluation mechanisms referred to above are to be supplemented by
a mechanism for the Participatory Monitoring and Evaluation (SEP) o f the PRS. The SEP i s a
process whereby the key stakeholders inthe PRS: (i) engage inthe monitoring and/or evaluation
o f a project, program, or policy; (ii)share control over the contents, process, and findings o f the
monitoring and evaluation; and (iii) identify and/or take corrective measures.
435. The SEP requires collaborationbetweenstakeholders inthe public and private sectors as
well as civil society in horizontal and vertical partnerships, this to promote transparency and
social and public accountability. In most cases, SEP efforts measure quantitative and qualitative
indicators, but its primary focus i s normally on qualitative indicators. The Participatory
Monitoring and Evaluation o f the PRS require that groups o f key stakeholders: (i) select targets to
be measured, that is, a number of key components o f the PRS, whether at the policy, project, or
program level; (ii) define the indicators for which it i s possible to gather data (the stakeholders at
the macro, meso, and micro levels select different objectively verifiable indicators to check the
same goal); (iii) agree on the periodicity o f data collection, analysis, and dissemination o f the
findings; (iv) determine whether qualitative or quantitative informationis required and who will
101
be responsible for gathering, analyzing, and disseminating what types of data; (v) agree on the
Management Information System (MIS) to be shared by all; and (vi) reach consensus on the
validity o f the indicators and agree to be assessedby means o f those indicators.
436. In order to ensure that the key stakeholders are committed to the success of this
approach, the Government proposes to design the SEP system in a participatory manner by
organizing workshops at the provincial and national levels with representatives o f key
stakeholders from the micro, meso, and macro levels. The aim o f these workshops will be to
determine the components of the SEP system mentioned above.
437. The work on the SEP already completed at this writing has two dimensions:
(i)identification o f the preliminary indicators o f problems and strategies, carried out during the
PPA field work by stakeholders at the village/neighborhood, territory/commune, and province
levels; and (ii) determination of the preliminary list o f stakeholders that can be invited to the
aforementioned SEP Workshops, identified by representatives o f the eleven provinces and the
group o f experts charged with preparing the Monitoring and EvaluationMechanism for the PRS at
the National Workshop inKisanto (Bas-Congo Province) inJune 2005.
438. The Government intends to establish a national unit or bureau for coordinating the
decentralized SEP system. Its roles and responsibilities will be clearly delineated in terms o f
mechanisms for interinstitutional collaboration, capacity building, and data analysis and
dissemination.
439. Civil society organizations such as the NGOs and professional associations should build
the capacities o f grassroots communities so that they are in a position to require a rendering o f
accounts by those in charge. These NGOs and associations should also support the capacity-
buildingand training activities aimed at developing individual and institutional capacities inthe
interest o f good governance and the improved provision o f services. The indicators and changes in
them should be reviewed periodically by means o f the MIS network for the SEP and at
semiannual SEP workshops. These activities will be carried out by the national unit for
coordinating SEP efforts and by the three levels o f key stakeholders nationally and in the
provinces.
4.6. Implementationconstraintsand risks
440. Implementation o f the PRS requires that the foundation be properly laid and the
prerequisites met in order to achieve the anticipated outcome. This foundation and these
prerequisites are either endogenous (political, economic, and financial governance) or exogenous
(external financing inparticular). Some factors are constraints and risks at one and the same time,
and could be impediments to implementation o f the Strategy. Furthermore, the exogenous
constraints and risks are considerably dependent onthe endogenous situation. These are: (i) peace;
(ii) institutional,andeconomicstability;(iii)
political, deregulation and the external openness o f
the economy; (iv) the capacities to absorb external resources and service the loans contracted; and
(v) the observance of commitments.
4.6.I. Endogenous constraints and risks
4.6.1.I.Political constraints and risks
441. Political good governance, and inparticular the return of peace, is the linchpin for all the
other strategic axes. The objectives o f the political transition underway in the country since
June 30, 2003 pursuant to the Global and Inclusive Agreement are: (i) reunification, pacification,
and reconstruction o f the country, territorial integrity, and the restoration o f State authority o f the
102
entire national territory; (ii) national reconciliation; (iii) formation o f a restructured and
the
integrated national army; and (iv) the organization o f free democratic elections that are
transparent at all levels, leading to a newpolitical order.
442. The destruction of the principal economic and social infrastructures, the absence of
security for property and persons resulting in major population displacements, urban migration,
administrative and police interference, the shrinkage o f the labor force (owing to deaths,
emigration, etc.) are all genuine constraints on economic growth and implementation o f the
Strategy. They are indicative o f the urgency andrelevance o f implementingthe relatedreforms.
4.6.1.2. Economic constraints and risks
443. Implementation of the reforms. The stability of the macroeconomic framework
initiated since 2001 is the result o f measures that necessarily must be consolidated, namely: (i)
the
cessation o f administered prices for goods and services; (ii) elimination o f the monopoly on
importingand distributingpetroleum products, and the introductiono f a transparent and automatic
mechanisms for revising the prices of such products; (iii) introduction o f a prudent monetary
policy, reflected primarily in the unification o f the interbank and parallel exchange rates and the
introduction o f a floating exchange regime aimed at stabilizing domestic prices; (iv) cash-basis
financing o f the State's financial operations in order to limit recourse to monetary financing; and
(v) the initiation of a program o f structural reforms aimed at establishing a climate conducive to
the development o f the private sector. Failure to observe the provisions and measures o f the
macroeconomic framework referred to above would surely disrupt this still fragile framework and
make it difficult to implement the Strategy.
444. Resource mobilization. There are several major risks that could jeopardize
implementation of the Strategy: (i)the inadequacy o f and persistent decline in budgetary
resources, which could also endanger the execution o f pro-poor sectoral strategies and policies;
(ii) Government's failuretoexecutethecapitalbudgetsinthreerecentyears;(iii) limited
the the
capacity to absorb external resources, in particular HIPC resources, observed since fiscal 2003,
which discourages donors and hampers the mobilization o f other resources; and (iv) the delay in
the disbursement of external resources to finance a number of rapid impact reforms, which could
prompt the State to resort to monetary financing with all the consequences this entails. The
Democratic Republic o f the Congo has joint subregional groups such as the SADC, the CEAC,
and COMESA, which recommend the elimination o f obstacles and barriers to foreign trade,
including customs duties. Application of these clauses would deprive the State of the bulk o f its
own resources in the event that the Government failed to establish a cohesive action plan for
forgoing revenue from trade levies and promoting direct taxation.
445. Inthe context ofthe work on implementation, the Governmentwill carry out an analysis
o f absorptive capacity and the impact on the macroeconomic situation o f the anticipated
substantial increase in external financing, taking into account as well the debt relief forthcoming
when the completion point o f the HIPC Initiative i s reached. The analysis will be accompaniedby
a study on debt sustainability inthe DRC.
446. Given the prospect o f implementing the DRC's regional commitments to eliminate
customs duties, the Government will speed up the implementation o f the tax and customs reform
packages with a view to increase revenue from domestic taxation.
4.6.1.3. Constraintsand risks associated with the participatory process
447. The absenceo f a cohesive participatory process would undermine support o fpartners for
the PRS. The weakness o f the base and the data collection system would pose a risk o f serious
103
errors in the preparation, implementation, and monitoring/evaluation o f Strategy execution. The
absence o f coordination and the weakness o f institutions could weaken the implementation of the
strategic axes of the PRGSP and profoundly impact their effectiveness.
4.6.1.4. Social and human constraints and risks
448. Quite apart from the weakness of institutions, there should also be concern about the
capacities o f our Administration (which i s cumbersome and slow) inpreparing viable projects and
controlling procedures in their regard. The harmonization and simplification o f donor procedures
would make itpossible to minimize the risks o f failure considerably.
449. A no less important risk would stem from the loss o f interest and motivationon the part
o f public employees, prompting them to resort to harmful practices to motivate themselves
(overinvoicing, kickbacks, etc.). Improving wages o f such personnel i s a priority not to be
overlooked.
4.6.15.Constraints and risks from the lack of reliable statistics
450. Sound monitoring and regular evaluation o f actions based on the availability o f reliable
statistics can help ensure successful implementation o f the Strategy. In this context, the
strengthening of human, material, and financial capacities inthe National Statistics System (SSN)
should be continued inlight o f the work carried out by the I N S inconducting the 1-2-3 survey.
4.6.2. Exogenous constraints and risks
451. The DRC's dependence on external assistance i s one o f the major constraints on its
development at present, owing largely to the institutional and structural weakness of its economy.
In addition, deterioration in the terms of trade and in the competitiveness of our exported raw
materials (primary commodities exportedby the DRC) also constitute a significant handicap.
104
ANNEXES
105
Anne x I:Macroeconomic framework tables, baseline scenario31
Table 8 Democratic Republic of Congo Principal socioeconomic indicators, 2006-2008
m zoos 200(, 2007 2w
Est Ear. hg PmJ Prai
(Annual percentage change, unless otherwise indicated)
Real sector
RealGDP 6.6 6.5 7.0 7.7 8.4
CPI(annual average) 4.0 21.6 9.2 7.0 6.0
CPI(at end ofperiod) 9.2 21.3 8.0 6.0 6.0
GDP deflator 6.1 21.5 6.5 6.5 6.5
Extemalsector
Exports o f goodsand nonfactor services 33.7 21.6 17.1 22.6 16.9
Imports of goods and nonfactor services 35.2 13.4 22.0 25.0 20.7
(Annual change inmoney stock inbroad sense at start ofperiod)
Monev sector
Money and quasi-money (M2) 72.9 24.6 14.0 14.7 15.5
Net foreis assets -18.3 4.5 13.2 7.0 6.0
Net domestic assets 92.3 21.7 1.7 8.7 10.3
(As apercentage o fGross Domestic Product)
Public sector
Revenue and grants 11.5 13.1 21.8 24.1 26.2
Tax andnontaxrevenue 9.5 11.6 12.3 13.2 14.0
Total expenditure 11 13.2 15.8 24.3 26.9 29.0
Primary expenditures 11.5 13.2 16.6 24.5 26.9
Current expenditures 9.6 9.8 11.6 13.3 13.6
Fiscal balance includinggrants -1.7 -2.7 -2.6 -2.7 -2.8
Fiscalbalance excluding grants -3.7 -4.2 -12.0 -13.7 -15.0
Savines and investment
Gross domestic savings 4.0 7.2 9.5 10.9 11.3
Gross national savings 0.5 5.7 8.0 8.8 9.5
Gross investment 12.8 14.1 18.1 23.7 26.1
Public sector 2.8 3.6 7.1 12.2 14.1
Privatesector 10.0 10.5 11.0 11.5 12.0
Savings - In\estnient (excluding official grants) -12.3 -8.4 -10.1 -14.9 -16.6
Balance o fuaments
Exports o fgoods and nonfactnr services 30.4 34.0 33.9 34.9 35.9
Imports o fgoods and nonfactor services 39.2 40.9 42.4 47.8 50.7
Tradebalance -3.7 -2.3 4.7 -7.7 -8.5
Currentbalance, including grants -5.7 -3.4 4 . 2 -6.1 -5.8
Current balance, excluding grants -12.3 -8.1 -10.1 -14.9 -16.6
(Asapercentage of primary expenditure, unless otherwise indicated)
Expenditureinurioritv sectors
Public health ... ... 7.5 12.3 12.9
Primary, secondary, and vocational education ... ... 12.2 15.5 16.7
Public works and infrastructure ... ... 11.2 15.8 16.3
Energy ... ... 10.0 10.2 10.3
Environment ... ... 0.9 2.1 2.3
Indicatorsofuroeress (As a percentage, unless otherwise indicated)
Primary education
Gross enrollmentratio -boys ... ... 72.3 77.7 83.9
Gross enrollmentratio girls
- ... ... 56.2 63.8 75.6
Gross enrollment ratio ... ... 64.1 70.8 80.0
PupiUteacher ratio ... ... 33.7 33.8 34.2
Health
Infant mortality rate 31 ... ... 111 104 89
Maternal mortalityrate 41 ...
...
... 1276 1079 944
Percentage o f assisted births ... 61.6 67.8 75.2
DPT3 immunization coverage rate ... ... 29.6 35.0 40.0
Basic infrastructure
Amount of roadto be asphalted (inkilometers) ... ... 15 238 446
Amount o f roadto be rehabilitated (inkilometers) ... ... 772 2 633 3 073
Maintenance o froads and bridges (inkilometers) ... ... 284 3 330 3 980
Water andsanitation
Access to drinking water ... ... 22.0 24.0 26.9
Access to sanitation 51 ... ... 9.0 11.5 15.0
Exchange rate
Average 398.2 474.0 460.0 484.0 491.1
Endofperiod 444.1 431.3 480.0 488.1 494.1
For the record
GDP (CDF billion) 2,601 3,366 3,837 4,403 5,083
GDP (US$ million) 6.531 7.100 8.341 9.096 10.351
NominalGDP (indollars per capita) 112.6 118.9 135.6 143.5 158.6
I /includesthe changeinarrears andthe BCC cashdeficit
2IAs apercenlageofM2atthestartaftheperiod
31Under5 mortalityrate per 1,000 livebirihs
41Maternalmonalityrate per 100,000 livebirths
51Composite indicator of improvedhouseholdlivingconditions
31 Estimates and uroiections of the standing committee on the macroeconomic framework (CPCM)
106
Table 9. Democratic Republic of Congo: Sectoralbreakdownof Gross Domestic Product at constant prices. 2006-2008
200.5 2005 2006 2007 2008
Est. &st. Proj. Proj. Proi.
(Billions of constant Congolese francs, base 100=2000)
Primary sector 188.8 197.2 207.6 219.5 233.5
Agriculture, tree farming, hunting, and fisheries 144.2 148.4 152.7 157.8 163.9
Mining 44.6 48.9 54.9 61.7 69.6
Secondary sector 40.4 44.2 49.1 55.8 63.9
Manufacturing 15.2 16.6 17.9 19.4 21.1
Electric power, water 2.6 2.7 3.1 3.4 3.9
Public buildings and works 22.6 24.9 28.1 33.0 38.9
Tertiary sector 103.3 112.5 122.0 132.6 145.0
Wholesale andretail trade 59.9 64.7 69.9 75.8 82.5
Transportation and communications 17.6 19.5 21.8 24.5 27.7
Market services 20.0 20.6 22.2 23.9 25.9
Nonmarket services 7.2 7.9 8.3 8.8 9.3
Imputedoutput ofbanking services -1.4 -0.3 -0.3 -0.3 -0.3
GDP at factor cost 332.5 354.0 378.7 408.0 442.4
Import duties andtaxes 7.0 7.5 8.2 8.8 9.5
GDP at market price 339.5 361.4 386.9 416.8 451.9
(Percentage change fromprevious year)
Primarv sector 4.0 4.5 5.3 5.7 6.4
Agriculture, tree farming, hunting, and fisheries 0.6 1.4 3.0 3.4 3.9
Mining 16.4 9.3 12.3 12.4 12.8
Secondary sector 20.5 9.3 11.1 13.8 14.4
Manufacturing 24.0 13.3 8.0 8.4 8.9
Electricpower, water -7.4 2.7 12.0 12.4 12.9
Public buildings andworks 22.5 20.6 13.0 17.4 17.9
Tertiary sector 6.5 9.0 8.4 8.8 9.3
Wholesale andretail trade 5.7 9.2 8.0 8.4 8.8
Transportation and communications 11.3 12.7 12.0 12.4 12.9
Market services 8.1 7.9 7.5 7.8 8.4
Nonmarket services 11.6 0.7 5.0 5.4 5.9
Imputedoutputofbanking services 195.9 10.7 5.0 5.0 5.0
GDP at factor cost 6.5 6.5 7.0 7.7 8.4
Import duties and taxes 11.5 0.7 10.0 7.5 7.5
Real GDP - - - - -
6.6 6.5 7.0 7.1 8.4
Memorandum items:
Consumer price (index 2003=100) 104.0 126.4 138.0 147.7 156.6
Consumer price, annual average 4.0 21.6 9.2 7.0 6.0
Consumer price, end ofperiod 9.2 21.3 8.0 6.0 6.0
GDP deflator (index 2003=100) 106.1 129.0 137.4 146.3 155.8
GDP deflator (annual average) 6.1 21.5 6.5 6.5 6.5
Nominal per capita GDP (annual change) 11.8 5.5 14.1 5.9 10.5
107
Table 10. Democratic Republic of Congo: Resource-employmentbalanccat current prices, 2006-2008
2604 200s 20011 2007 r n 8
f&. Eat. Proj, bj. we
(Millions of current Congolese francs)
Internaldemand 2,830 3.598 4,166 4,967 5,835
Total consumption 2,497 3,122 3,471 3,923 4,509
Public sector 202 303 503 473 571
Private sector 2,296 2,818 2,969 3,450 3,938
Total investment 333 476 695 1,044 1,326
Public sector 73 123 273 538 716
Private sector 260 353 422 506 610
Net external demand -229.2 -232 -329 -564 -752
Exports of goods andservices 790 1,143 1,299 1,538 1,824
Imports of goods and services 1,019 1,376 1,628 2,103 2,575
GDP at market nrices
Net factor income -117.1 -151.7 -174.8 -231.4 -278.0
Transfers from other countries 25.6 99.4 117.5 140.1 184.2
Gross national disposable income 2,510 3,313 3,780 4,312 4,990
Public sector 179 285 315 409 527
Private sector 2,330 3,029 3,465 3,902 4,463
Grossdomestic savings 104 244 366 480 575
Public sector 46 86 -114 -473 -571
Private sector 57 158 479 952 1,145
Gross national savings (excluding official pants) 12 192 308 389 481
Public sector -22 -19 -188 -63 -44
Privatesector 34 210 496 452 525
Savings - investment balance -320.6 -284.3 -386.4 -655.7 -845.5
Public sector -94.9 -141.4 -460.3 -601.2 -760.1
Privatesector -225.8 -142.9 73.9 -54.6 -85.4
(As apercentage of Gross DomesticProduct)
Internal demand 108.8 106.9 108.6 112.8 114.8
Total consumption 96.0 92.8 90.5 89.1 88.7
Public sector 7.7 9.0 13.1 10.7 11.2
Privatesector 88.3 83.7 77.4 78.4 77.5
Total investment 12.8 14.1 18.1 23.7 26.1
Public sector 2.8 3.6 7.1 12.2 14.1
Private sector 10.0 10.5 11.0 11.5 12.0
Net external demand -8.8 -6.9 -8.6 -12.8 -14.8
Exports of goods andnonfactor services 30.4 34.0 33.9 34.9 35.9
Importsof goods andnonfactor services 39.2 40.9 42.4 47.8 50.7
Grossnational savings 0.5 5.7 8.0 8.8 9.5
Public sector -0.9 -0.6 -4.9 -1.4 -0.9
Private sector 1.3 6.3 12.9 10.3 10.3
Savings n investment gap -12.3 -8.4 -10.1 -14.9 -16.6
Public sector -3.6 -4.2 -12.0 -13.7 -15.0
Private sector -8.7 -4.2 1.9 -1.2 -1.7
108
(Billions o f Congolese francs, unless otherwise indicated)
Tax andnontaxrevenue 374.8 389.0 473.3 181.2 711.7
Tax revenue 246.2 256.7 308.9 387.0 481.6
Customs and excise duties 140.7 145.4 174.0 218.0 271.3
Direct and indirect taxes 105.6 111.4 134.9 169.0 210.3
Nontaxrevenue 33.0 34.1 52.4 65.7 81.7
Oil revenue @reduction) 95.5 98.1 112.0 128.5 148.4
Production(royalties) 42.0 98.1 49.3 56.5 65.3
Distribution(special tax) 53.5 0.0 62.7 72.0 83.1
Total exuenditure 549.0 514.9 923.6 1174.3 1463.8
Current expenditures 344.6 330.0 443.9 585.0 693.1
Wages and salaries 134.5 142.0 180.0 207.3 239.6
Military,Police 33.7 36.5 34.8 40.0 46.1
Civilians 100.8 105.5 145.2 167.3 193.4
Transfers and subsidies 18.0 22.2 26.6 43.2 52.2
MIBAand GECAMINES 0.0 0.0 0.0 0.0 0.0
Supplementary budgets and other interventions 3.0 2.5 6.3 7.3 8.4
Economic interventions 3.6 4.1 4.8
Subsidiary organizations 2.7 3.1 3.6
blending to fmancial authorities 15.0 19.7 20.3 35.9 43.8
Other 112.1 132.6 138.0 239.5 306.4
Institutions 19.0 25.1 21.9 25.2 29.1
Ministries 55.1 64.1 69.5 161.0 215.7
Centralized payments 23.0 25.5 24.2 27.8 32.1
Provincial services and EADs 15.0 17.9 22.3 25.6 29.6
Interest paid 80.0 33.2 99.3 95.0 95.0
External debt 67.7 15.6 97.3 95.0 95.0
Internal debt 12.3 17.6 2.0 0.0 0.0
Off-budget expenditures 0.0 0.0 0.0 0.0 0.0
Capital expenditures 117.5 112.0 253.2 486.5 662.0
From localresources 16.2 32.3 24.8 48.4 91.5
From external resources 101.3 79.7 228.5 438.1 570.5
HIPC expenditures 19.0 21.2 38.9 102.8 108.7
Special expenditures 52.5 36.2 187.5 0.0 0.0
From localresources 18.2 26.3 43.0
From external resources 34.3 9.9 144.5
Expenditures during additionalperiod 15.4 15.5 0.0 0.0 0.0
General balance excluding grants (based on commitm<nts) -174.2 -125.9 -450.3 -593.2 -752.1
BCC operational income l/ -16.0 -15.5 -10.0 -8.0 -8.0
Consolidated general balance (excluding grants) -190.2 -141.4 -460.3 -601.2 -760.1
Consolidated general balance (including grants) -22.6 -89.2 -98.0 -119.2 -142.4
Total fmancine (excludine erants) 190.2 141.4 460.3
~
760.1
Change inarrears 0.0 -0.6 0.0 0.0 0.0
Internal 0.0 -0.6 0.0 0.0 0.0
External 0.0 0.0 0.0 0.0 0.0
Internal(net) -3.8 52.8 -24.7 0.0 0.0
Banking system -3.8 52.8 -10.0 0.0 0.0
BCC -3.8 52.8 -10.0 0.0 0.0
Government credit I/ -19.8 37.3 -20.0 -8.0 -8.0
BCC cash deficit l/ 16.0 ,5.s 10.0 8.0 8.0
Commercialbanks 0.0 0.0 0.0 0.0 0.0
Nonbanking 0.0 0.0 -14.7 0.0 0.0
External (net) 194.1 89.1 400 6 520.3 664.2
Grants 72.5 27.2 224.2 335.1 462.5
Project grants 34.4 20.9 211.7 335.1 462.5
Budget grants 38.2 6.3 12.5
Drawings 122.7 114.5 169.4 166.3 174.5
Budget loans 45.0 50.7 8.4 63.3 66.5
Project loans 77.7 63.8 161.1 103.0 108.0
Amortization due -96.3 -77.6 -131.1 -128.0 -128.0
Other fmancing 0.0 0.0 0.0 0.0 0.0
HIF'C Initiative 95.1 25.0 138.0 146.9 155.2
Fundinggap (+) / Overfmancing(-) 0.0 0.1 84.4 80.9 95.9
l/Preliminary
2/ Includes the change inarrears andthe BCC cash deficit
109
Table 12 Democraric Republicof Congo Go\ ernment no\\ of funds, 2006-2008
20% 2006 mo7 2goa
AM 1w2a06 ES.1 Budgrc Pro1 ROI
Revenue and erants - - - - -
(As a percentage of GDP)
16.0 13.1 21.8 24.1 26.2
Tax andnontax revenue 11.0 11.6 12.3 13.2 14.0
Tax revenue 7.2 7.6 8.1 8.8 9.5
Customs and excise duties 4.1 4.3 4.5 5.0 5.3
Direct and indirect taxes 3.1 3.3 3.5 3.8 4.1
Nontaxrevenue 1.o 1.o 1.4 1.5 1.6
Oil revenue (production) 2.8 2.9 2.9 2.9 2.9
Production(royalties) 1.2 2.9 1.3 1.3 1.3
Distribution (special tax) 1.6 0.0 1.6 1.6 1.6
Grants 4.9 1.6 9.4 10.9 12.2
H P C grants 2.8 0.7 3.6 3.3 3.1
Project grants 1.o 0.6 5.5 7.6 9.1
Budget grants 1.1 0.2 0.3 0.0 0.0
Total exnenditure - __
16.1 15.3 rn m -
28.8
Current expenditures 10.1 9.8 11.6 13.3 13.6
Wages and salaries 4.0 4.2 4.7 4.7 4.7
Military,Police 1.o 1.1 0.9 0.9 0.9
Civilians 3.0 3.1 3.8 3.8 3.8
Transfers and subsidies 0.5 0.7 0.7 1.o 1.0
MIBAand GECAMINES 0.0 0.0 0.0 0.0 0.0
Supplementary budgets and other interventions 0.1 0.1 0.2 0.2 0.2
Onlending to fmancial authorities 0.4 0.6 0.5 0.8 0.9
Other 3.3 3.9 3.6 5.4 6.0
Institutions 0.6 0.7 0.6 0.6 0.6
Ministries 1.6 1.9 1.8 3.7 4.2
Centralized payments 0.7 0.8 0.6 0.6 0.6
Provincial services and EADs 0.4 0.5 0.6 0.6 0.6
Interest paid 2.4 1.o 2.6 2.2 1.9
Externaldebt 2.0 0.5 2.5 2.2 1.9
Internaldebt 0.4 0.5 0.1 0.0 0.0
Off-budget expenditures 0.0 0.0 0.0 0.0 0.0
Capital expenditures 3.5 3.3 6.6 11.1 13.0
From localresources 0.5 1.o 0.6 1.1 1.8
From external resources 3.0 2.4 6.0 10.0 11.2
HIPC expenditures 0.6 0.6 1.o 2.3 2.1
Special expenditures 1.5 1.1 4.9 0.0 0.0
From localresources 0.5 0.8 1.1 0.0 0.0
From external resources 1.o 0.3 3.8 0.0 0.0
Expenditures during additionalperiod 0.5 0.5 0.0 0.0 0.0
Consolidated primary balance includinggrants (cash basis) 2.2 -1.2 0.3 -0.4 -0.8
General balance including grants (based on commihnents) -0.2 -2.2 -2.3 -2.5 -2.6
General balance excluding grants -5.1 -3.7 -1 1.7 -13.5 .14.8
Change inarrears 0.0 0.0 0.0 0.0 0.0
General balance (cashbasis) -0.2 -2.2 -2.3 -2.5 -2.6
BCC operational income I t -0.5 -0.5 -0.3 -0.2 -0.2
Consolidated eeneral balance includine mants - - - - -
-0.7 -2.7 -2.6 -2.7 -2.8
Consolidated general balance excluding grants -5.6 -4.2 -12.0 -13.7 .15.0
Total financinr! (excludine wants) - 2.7
0.7 - - - 2.6 2.7
Internal (net) -0.1 1.6 -0.6 0.0 0.0
Banking system -0.1 1.6 -0.3 0.0 0.0
BCC -0.1 1.6 -0.3 0.0 0.0
Commercialbanks 0.0 0.0 0.0 0.0 0.0
Nonbanking 0.0 0.0 -0.4 0.0 0.0
External (net) 0.8 1.1 1 .o 0.9 0.9
Drawings 3.6 3.4 4.4 3.8 3.4
Budgetary loans 1.3 1.5 0.2 1.4 1.3
Projectloans 2.3 1.9 4.2 2.3 2.1
Amortization due -2.8 -2.3 -3.4 -2.9 -2.5
other fmancing 0.0 0.0 0.0 0.0 0.0
Funding gap (+)/ Overiimancing (-) 0.0 0.0 2.2 1 R
.." 1 9
110
n
a
B ?a
1 a B
Key to Table 13 onpreceding page:
Democratic Republic of Congo: Breakdownofprimary expenditures by government department, 2006-
2008
Column headings
Sector
Payments
Operating expenses
Institutions
Ministries
Centralized
Transfers
Provinces
Financial authorities
Economic interventions
Subsidiaryorganizations
Investments
HIPC
Ownfunds
External funds
Total
Total
(Billions of Congolesefrancs)
Line items
Public health
EPSP (primary, secondary, and vocational education)
Public works and infrastructure
Energy
Environment
Institutions 1I
Defense and security 21
Sovereign functions 31
Administration 41
Public finance 51
Other productive sectors 61
Other social sectors 71
Other 81
Total
Notes
11 Presidency,Vice-PresidencylPolitical Commission, Vice-PresidencylEcofin, Vice-
PresidencylReconstruction,NationalAssembly, Judiciary, Government Secretariat, Vice-
PresidencylSociocultalCommission, Senate, National Commission for UNESCO
21 Security Services, National Defense
31 ForeignAffairs, Domestic Affairs, InternationalCooperation, Regional Cooperation, Ministryo f
Justice, Regional Planning, Chancellery o fNational Associations
41 Relations with Parliament, Relations with Political Parties, Administration of Parliament, Institutional
Reforms, Civil Service, General Commission to the French-Speaking Community, Communications and
Press
51 Finance, Budget, Planning, Economy, Portfolio, Reconstruction
61 Environment, Land Issues, IndustrylPMEA, ForeignTrade, Post Office and Telecommunications
Service, Transportation and Communications, Agriculture, Livestock, Rural Development, Mining,
Hydrocarbons, Handicrafts, Tourism and Hotels
112
71 HumanRights, University and Higher Education, Culture andArts, Sports andRecreation, Scientific
Research, Social Welfare, Labor, Social Affairs, Status of Women andthe Family, Veterans, Youth,
General Commission for Reintegration, Solidarity, and HumanAffairs, City Planning
81 National Service, Provincial Services, Independent Electoral Commission, National HumanRights
Observatory, Truth andReconciliationCommission, HighAuthority for Media, Ethics and Anti-
Corruption Commission, Common Expenditures, General Commission for the PeaceProcess
113
Table 14. Democratic Republic of Congo: Balance ofpayments, 2006-2008
(Millions o f U S dollars, unless otherwise indicated)
Balance o f merchandizetrade -165 -389 -700 -876
Exports, fob 2,069 2,350 2,585 2,973
Imports, fob 2,234 2,740 3,285 3,849
Balance of services -325 -326 -466 -655
Receipts 343 474 593 741
Expenditures 668 800 1,059 1,396
Balance o f goods and services -490 -715 -1,166 -1,531
Receipts 2,4 12 2,824 3,178 3,714
Expenditures 2,902 3,540 4,344 5,244
Balance o f income -320 -380 -478 -566
Receipts 105 124 152 190
Expenditures 425 504 630 756
Balance o f net transfers 210 255 289 375
Current account balance (excluding =ants) .__
-600 -840 -1.355 -1.722
Balance o f capital 600 840 1.355 1,722
Net capitaltransfers 361 487 801 1,118
Official assistance 57 487 692 942
Program grants 13 27 0 0
Project grants 44 460 692 942
Other grants 303 0 109 176
Non-monetary capital 259 421 507 618
Private capital -127 38 124 208
Direct investments 257 302 375 380
Portfolio investments -384 -264 -251 -172
Errors and omissions 0 0 0 0
Official capital 387 383 383 411
Gross drawings 242 368 344 355
Program loan 107 18 131 135
Project loan 135 350 213 220
Amortization due (excluding IMF) -164 -285 -264 -261
Special financing 256 0 0 0
Net change inarrears (excluding IMF) 0 0 0 0
Consolidation o f arrears 0 0 0 0
Debt service relief 256 0 0 0
HIPC Initiative 53 300 303 316
Monetarycapital (-)increase -21 -77 -44 -43
Fundinggap (+) / Overfinancing (-) 0 8 91 29
114
Table 15. Democratic Republic oiCongo Integrated monetary survey, 2006 - 2008
2005 2006 2007 2008
Est. If Proj . Proj . Proj .
(Volume at endofyear, billions of Congolesefrancs)
Net foreign assets -272.0 -236.6 -215.3 -194.1
BCC -356 -322.6 -302.6 -282.1
Commercialbanks 84.3 86.0 87.3 88.6
Net domesticassets 550.8 555.3 582.0 618.3
Domesticcredit 149.0 149.5 164.0 183.6
Net governmentcredit 83.4 73.4 73.4 73.4
Credit to the economy 65.7 76.2 90.7 110.3
Credit to theprivate sector 65.2 75.7 90.1 109.5
Credit to theparastatalsector 0.4 0.5 0.6 0.8
Othernetitems 402 405.8 418.0 434.7
Money and quasi-money(M2) 268.3 305.9 351.a 405.3
Money (MI) 139 148 158 168
Notes 120 128 136 145
Demanddeposits 19 20 22 23
Quasi-money 129 158 194 238
Term deposits innationalcurrency 0 0.4 0.4 0.5
Deposits in foreign currency 129 158 193 237
Importation deposits 10 12.8 15.7 18.9
(Percentagechange from previousyear)
Net foreign assets 3.5 13.0 9.0 9.8
Net domesticassets 9.3 0.8 4.8 6.2
Internal credit 116.4 0.3 9.7 12.0
Net governmentcredit 206.3 -12.0 0.0 0.0
Credit to the economy 57.6 16.0 19.0 21.6
Othernet items -7.7 1.o 3.0 4.0
Monev stock (n21 - - ___
24.6 14.0 14.7 __
15.5
Money 18.6 6.5 6.5 6.5
Notes 18.0 6.5 6.5 6.5
Demanddeposits 22.5 6.5 6.5 6.5
Quasi-money 31.8 22.1 22.5 22.7
Term deposits innationalcurrency 6.1 6.5 6.5 6.5
Deposits in foreign currency 31.9 22.1 22.5 22.8
Import deposits 50.7 22.0 22.7 20.7
(Annualpercentagechangeof M2at start ofperiod)
Net foreign assets 4.5 13.2 7.0 6.0
Net domesticassets 21.7 1.7 8.7 10.3
Domesticcredit 37.2 0.2 4.7 5.6
Net governmentcredit 26.1 -3.7 0.0 0.0
Credit to the economy 11.1 3.9 4.7 5.6
Credit to theprivate sector 11.8 3.9 4.7 5.5
Credit to the parastatalsector -0.6 0.0 0.0 0.0
Other net items -15.5 1.5 4.0 4.8
Moneystock (n2) 24.6 __
14.0 __
14.7 -15.5
Money 10.1 3.4 3.1 2.9
Notes 8.5 2.9 2.7 2.5
Demanddeposits 1.6 0.5 0.4 0.4
Quasi-money 14.5 10.6 11.6 12.5
Term deposits innational cunency 0.0 0.0 0.0 0.0
Deposits inforeign currency 14.5 10.6 11.6 12.5
Importdeposits 1.6 0.9 0.9 0.9
-
1/ Preliminary
2/ Fiduciary circulation excludingbanksideposits
115
A nnex II:Macroeconomic framework tables, alternative scenario32
Table 16. Democratic Republic ofCongo: Principalsocioeconomic indicators, 2006-2008
2006 2007 2008
Proj. Base Ait Deviation Base Alt. Deviation
(Annual percentagechange, unless otherwise indicated)
Realsector
Real GDP 7.0 7.7 7.1 -0.6 8.4 7.3 -1.1
CPI (annualaverage) 9.2 7.0 7.0 0.0 6.0 6.0 0.0
CPI (endof period) 8.0 6.0 6.0 0.0 6.0 6.0 0.0
GDP deflator 6.5 6.5 6.5 0.0 6.5 6.5 0.0
(Annual change in money stock in broad sense at start of period)
Monevsector
Moneyand quasi-money (M2) 14.0 14.7 14.1 -0.7 15.5 14.2 -1.2
Net foreign assets 13.2 7.0 7.3 0.3 6.0 6.5 0.4
Net domesticassets 1.7 8.7 7.5 -1.2 10.3 8.5 -1.8
(As a percentageof Gross Domestic Product)
Publicsector
Revenueand grants 21.8 24.1 23.0 -1.I 26.5 24.7 -1.8
Tax and nontax revenue 12.3 13.2 13.2 0.0 14.0 14.0 0.0
Total expenditure I / 24.3 26.9 25.4 -1.5 28.6 27.2 -1.4
Primaryexpenditures 16.6 24.5 23.0 -1.5 26.6 25.1 -1.5
Current expenditures 11.6 13.3 12.9 -0.4 13.6 13.3 -0.4
Fiscalbalance includinggrants -2.6 -2.7 -2.3 0.4 -2.1 -2.5 -0.4
Fiscalbalance excludinggrants -12.0 -13.7 -12.2 1.5 -14.6 -13.2 1.4
Savinasand investment
Gross domestic savings 9.5 10.9 12.1 1.2 11.3 13.1 1.8
Gross nationalsavings 8.0 6.6 9.9 1.1 9.3 10.9 1.6
Gross investment 18.1 23.7 22.6 -1.I 25.7 24.6 -1.1
Publicsector 7.1 12.2 11.1 -1.1 13.7 12.6 -1.I
Privatesector 11.0 11.5 11.5 0.0 12.0 12.0 0.0
Savings - Investment(excludingofficialgrants) -10.1 -14.9 -12.7 2.2 -16.4 -13.7 2.7
Balanceof Davments
Exportsof goods and nonfactorsewices 33.9 34.9 36.5 1.6 35.9 39.0 3.1
Importsof goods and nonfactorservices 42.4 47.8 47.0 -0.7 50.3 50.5 0.2
Merchandizetrade balance -4.7 -7.7 -5.2 2.5 -8.1 -4.7 3.4
Current account balance,including grants -4.2 -6.1 -5.0 1.1 -5.3 -4.4 0.9
Current account balance,excluding grants -10.1 -14.9 -12.7 2.2 -16.4 -13.7 2.7
(As a percentageof primary expenditure)
ADDrODnatiOnS to ~rioritvministries
Public health 7.5 12.3 11.5 -0.8 13.1 11.8 -1.3
Primary,secondary,and vocational education 12.2 15.5 16.1 0.7 17.0 16.7 -0.3
Publicwoks and infrastructure 1I.2 15.8 13.4 -2.3 16.5 14.3 -2.3
Energy 10.0 10.2 10.4 0.2 10.5 0.4
Environment 0.9 2.1 1.5 -0.6 2.3 .10.9
1.9 -0.5
Indicatorsof Droaress (As a percentage, unlessotherwise indicated)
Primaryeducation
Gross enrollmentratio -boys 72.3 77.7 72.4 -5.3 83.9 72.4 -1I.5
Gross enrollmentratio -girls 56.2 63.8 56.3 -7.5 75.6 56.3 -19.3
Gross enrollmentratio 64.1 70.8 64.2 -6.7 80.0 64.2 -15.8
PupiWteacherratio 33.7 33.8 33.0 0.0 34.2 34.2 0.0
Health
Infant mortality rate 2/ 111 104 109 5.5 89 107 18.4
Maternalmortality rate 3/ 1,276 1,079 1,272 193.3 944 1,267 323.2
Percentageof assistedbirths 61.6 67.8 61.6 -6.2 75.2 61.6 -13.6
DPT immunizationcoverage rate 29.6 35.0 29.7 -5.3 40.0 29.8 -10.2
Basic infrastructure
Amount of road to be asphalted (in kilometers) 12 238 146 -92.0 446 286 -160.7
Amount of road to be rehabilitated(in kilometers) 617 2,633 1,614 -1,019.1 3,073 1,967 -1,106.3
Maintenanceof roadsand bridges (in kilometers) 227 3,330 2,041 -1,288.9 3,980 2,547 -1,432.9
Water and sanitation
Access to drinking water 22.0 24.0 23.7 -0.4 26.9 26.2 -0.7
Access to sanitation 4/ 9.0 11.5 10.3 -1.2 15.0 12.5 -2.5
Exchangerate
Average 460.0 484.0 484.0 0.0 491.1 491.1 0.0
End of period 480.0 488.1 488.1 0.0 494.1 494.1 0.0
Forthe record:
RealGDP (in per capita dollars) 13.7 13.6 13.0 -0.6 14.1 13.0 -1.I
I / Includesthe change in arrears and the BCCcash deficit
2/ Under5 mortality rate per 1,000 live births
3/ Maternalmortality rate per 100,000live births
4/ Compositeindicatorof improved household livingconditions
32 Estimates and projections o f the standing committee onthe macroeconomic framework (CPCM)
116
Table 17. Democratic Republic of Congo: Alternative scenario - Sectoral breakdown of Gross Domestic Product at constant
nrices. 2006-2008
(Billions o f constantCongolesefrancs, base 100=2000)
Pnmary sector 197.2 207.6 218.9 231.1
Agriculture, wee farming, hunting, and fisheries 148.4 152.7 157.2 161.9
Mining 48.9 54.9 61.7 69.2
Secondarysector 44.2 49.1 54.5 60.6
Manufacturing 16.6 17.9 19.3 20.9
Electric power, water 2.7 3.1 3.4 3.8
Public buildings and works 24.9 28.1 31.7 35.8
Tertiary sector 112.5 122.0 132.2 143.4
Wholesale and retail trade 64.7 69.9 75.5 81.6
Transportation and communications 19.5 21.8 24.4 27.4
Market services 20.6 22.2 23.9 25.6
Nonmarket services 7.9 8.3 8.8 9.2
Imputedoutput ofbanking services -0.3 -0.3 -0.3 -0.3
GDP at factor cost 354.0 378.7 405.6 435.1
Import duties andtaxes 7.5 8.2 8.8 9.5
GDP at marketprice 361.4 386.9 414.5 444.6
(Percentagechange fromprevious year)
Primary sector 4.5 5.3 5.4 5.6
Agriculture, tree farming, hunting, and fisheries 1.4 3.0 3.O 3.0
Mining 9.3 12.3 12.3 12.3
Secondarysector 9.3 11.1 11.1 11.1
Manufacturing 13.3 8.0 8.0 8.0
Elechic power, water 2.7 12.0 12.0 12.0
Public buildings and works 20.6 13.0 12.9 12.9
Tertiary sector 9.0 8.4 8.4 8.5
Wholesale and retail trade 9.2 8.0 8.O 8.0
Transportation andcommunications 12.7 12.0 12.0 12.0
Market services 7.9 7.5 7.5 7.5
Nonmarket senices 0.7 5.0 5.0 5.0
Imputedoutputo fbanking services 10.7 5.0 5.0 5.0
GDP at factor cost 6.5 7.0 7.1 7.3
Import duties and taxes 0.7 10.0 7.5 7.5
RealGDP -
6.5 -
7.0 -
7.1 __
7.3
(Percentage change inGDP fromprevious year)
Primary sector 2.5 2.9 2.9 2.9
Agriculture, tree farming, hunting, and fisheries 1.2 1.2 1.2 1.1
Mining 1.3 1.7 1.7 1.8
Secondarysector 1.1 1.4 1.4 1.5
Mauufachlring 0.4 0.4 0.4 0.4
Elechicpower, water 0.0 0.1 0.1 0.1
Public buildings and works 0.7 0.9 0.9 1.0
Tertiary sector 2.7 2.6 2.7 2.7
Wholesale andretail trade I.4 1.4 1.4 1.5
Transportation and communications 0.6 0.6 0.7 0.7
Market services 0.2 0.4 0.4 0.4
Nonmarket services 0.2 0.1 0.1 0.1
Imputedoutput ofbanking services 0.3 0.0 0.0 0.0
Importduties and taxes 0.1 0.2 0.2 0.2
117
Table 18 DemocraticRepublic of Congo. Alternativescenario - Resource-employmentbalance, 2006-2008
2005 ?wit, 2uD: too8
est &OJ. PKJJ Rni.
(Millions of cwent Congolese francs)
Internal demand 3,598 4,166 4,838 5,579
Total consumption 3,122 3,471 3,849 4,347
Public sector 303 503 453 542
Privatesector 2,818 2,969 3,396 3,804
Total investment 476 695 989 1,232
Public sector 123 273 486 632
Private sector 353 422 503 600
Net external demand -232 -329 -460 -578
Exportsof goods andservices 1,143 1,299 1,599 1,948
Imports o f goods and services 1,376 1,628 2,059 2,526
GDP at market urices
Net factor income -151.7 -174.8 -240.5 -305.9
Transfers from other counhies 99.4 117.5 145.7 196.7
Grossnational disposable income 3,313 3,780 4,283 4,892
Public sector 285 315 406 517
Privatesector 3,029 3,465 3,876 4,375
Gross domestic savings 244 366 529 655
Public sector 86 -114 -453 -542
Privatesector 158 479 982 1,197
Gross national savings (excluding official grants) 192 308 434 545
Public sector -19 -188 -46 -26
Private sector 210 496 481 571
Savings - investment balance -284.3 -386.4 -555.2 -687.1
Public sector -141.4 -460.3 -532.4 -657.9
Privatesector -142.9 73.9 -22.8 -29.2
(As apercentage ofGrossDomestic Product)
Internal demand 106.9 108.6 110.5 111.6
Total consumption 92.8 90.5 87.9 86.9
Public sector 9.0 13.1 10.3 10.8
Privatesector 83.7 77.4 77.6 76.1
0.2 -1.5
Total investment 14.1 18.1 22.6 24.6
Public sector 3.6 7.1 11.1 12.6
Privatesector 10.5 11.0 11.5 12.0
Net external demand -6.9 -8.6 -10.5 -11.6
Exports o fnonfactor goods and services 34.0 33.9 36.5 39.0
Imports ofnonfactor goods and services 40.9 42.4 47.0 50.5
Gross national savings 5.7 8.0 9.9 10.9
Public sector -0.6 -4.9 -1.1 -0.5
Private sector 6.3 12.9 11.0 11.4
Savings - investment gap -8.4 -10.1 -12.7 -13.7
Public sector -4.2 -12.0 -12.2 -13.2
Private sector -4.2 1.9 -0.5 -0.6
118
Table 19. Democratic Republic of Congo: Alternative scenario Go\ ernmcnt flow of funds, 2006-2005
-
2w15 2006 aoo7 2008
AM 1W.222106 Est. Budget Proj. b j .
(Billions of Congolesefrancs, unlessotherwise indicated)
Tax andnontax revenue 374.8 473.3 577.9 700.2
Tax revenue 246.2 256.7 308.9 384.8 473.8
Customs and excise duties 140.7 145.4 174.0 216.8 266.9
Direct and indirect taxes 105.6 111.4 134.9 168.0 206.9
Noutax revenue 33.0 34.1 52.4 65.3 80.4
Oil revenue broduction) 95.5 98.1 112.0 127.8 146.0
Production (royalties) 42.0 98.1 49.3 56.2 64.2
Distribution(special tax) 53.5 0.o 62.7 71.6 81.7
Total exuenditure 549.0 514.9 923.6 1.102.3 1.350.1
Cment expenditures 344.6 330.0 443.9 564.9 663.4
Wages and salaries 134.5 142.0 180.0 205.3 234.4
Military, Police 33.7 36.5 34.8 39.7 45.4
Civilians 100.8 105.5 145.2 165.6 189.0
Transfers and subsidies 18.0 22.2 26.6 42.9 51.4
MIBA andGECAMINES 0.0 0.0 0.0 0.0 0.0
Supplementary budgets and other interventions 3.0 2.5 6.3 7.2 8.2
blending to fmancial authorities 15.0 19.7 20.3 35.7 43.1
Other 112.1 132.6 138.0 221.7 282.7
Institutions 19.0 25.1 21.9 25.0 28.6
Ministries 55.1 64.1 69.5 143.5 193.4
Centralized payments 23.0 25.5 24.2 27.6 31.6
Provincial services and EADs 15.0 17.9 22.3 25.5 29.1
Interest paid 80.0 33.2 99.3 95.0 95.0
Externaldebt 67.7 15.6 97.3 95.0 95.0
Internaldebt 12.3 17.6 2.0 0.0 0.0
Off-budget expenditures 0.0 0.0 0.0 0.0 0.0
Capital expenditures 117.5 112.0 253.2 434.6 578.0
From localresources 16.2 32.3 24.8 48.2 90.0
From external resources 101.3 79.7 228.5 386.4 488.0
HIPC expenditures 19.0 21.2 38.9 102.8 108.7
Special expenditures 52.5 36.2 187.5 0.0 0.0
From localresources 18.2 26.3 43.o
From external resources 34.3 9.9 144.5
Expenditures during additionalperiod 15.4 15.5 0.0 0.0 0.0
General balance excluding grants (hased on commitments) -174.2 -125.9 -450.3 -524.4 -649.9
General balance including grants -6.6 -73.7 -88.0 -94.1 -114.7
BCC operationalincome I/ -16.0 -15.5 -10.0 -8.0 -8.0
Consolidated eeneral balance (excludine exants) -
-190.2 -141.4 -460.3 -532.4 -657.9
Consolidated general balance (including grants) -22.6 -89.2 -98.0 -102.1 -122.7
Total financing (excluding mantsl 190.2 141.4 460.3 532.4 657.9
Change inarrears 0.0 -0.6 0.0 0.0 0.0
Intemal(net) -3.8 52.8 -24.7 0.0 0.0
Banking system -3.8 52.8 -10.0 0.0 0.0
BCC -3.8 52.8 -10.0 0.0 0.0
Government credit I/ -19.8 37.3 -20.0 -8.0 -8.0
BCC cashdeficit 11 16.0 15.5 10.0 8.0 8.0
Commercialbanks 0.0 0.0 0.0 0.0 0.0
Nonbanking 0.0 0.0 -14.7 0.0 0.0
Extemal (net) 194.1 89.1 400.6 468.6 581.7
Grants 72.5 27.2 224.2 283.4 380.0
Project grants 34.4 20.9 211.7 283.4 380.0
Budget grants 38.2 6.3 12.5
Drawings 122.7 114.5 169.4 166.3 174.5
Budget loans 45.0 50.7 8.4 63.3 66.5
Projectloans 77.7 63.8 161.1 103.0 108.0
Amortization due -96.3 -77.6 -131.1 -128.0 -128.0
other fmancing 0.0 0.0 0.0 0.0 0.0
HIPC Initiative 95.1 25.0 138.0 146.9 155.2
Funding gap (+)/ Overfinancing (-) 0.0 0.1 84.4 63.8 76.2
l i Preliminary
21 Includa the change in arrears and the BCC cash deficit
119
Table 20 Democratic Republic of Congo Alternative scenario Inicgratcdmonctary sur\ey, 2006 - 2008
-
2005 2006 2007 2W8
E9L 1' Pmj Pmj Roi.
(Volume at endofyear, billions of Congolese francs)
Net foreign assets -272.0 -236.6 -214.4 -191.8
BCC -356 -322.6 -301.7 -280.4
Commercialbanks 84.3 86.0 87.3 88.6
Net domestic assets 550.8 555.3 578.3 607.9
Domestic credit 149.0 149.5 160.3 173.3
Net government credit 83.4 73.4 73.4 73.4
Credit to the economy 65.7 76.2 86.9 99.9
Credit to the private sector 65.2 75.7 86.3 99.2
Credit to the parastatal sector 0.4 0.5 0.6 0.7
Other net items 402 405.8 418.0 434.7
Monev andauasi-monev (M2) 268.3 305.9 349.0
~
398.7
Money (MI) 139 148 158 168
Notes 120 128 136 145
Demanddeposits 19 20 22 23
Quasi-mone y 129 158 192 23 1
Term deposits innational currency 0 0.4 0.4 0.5
Deposits in foreign currency 129 158 191 23 1
Import deposits 10 12.8 14.8 17.4
(Percentagechange from previous year)
Net foreign assets 3.5 13.0 9.4 10.6
Net domestic assets 9.3 0.8 4.1 5.1
Domestic credit 116.4 0.3 7.2 8.1
Net government credit 206.3 -12.0 0.0 0.0
Credit to the economy 57.6 16.0 14.1 14.9
Other net items -7.7 1.0 3.0 4.0
Monev stock (M2) -24.6 __
14.0 -14.1 -
14.2
Money 18.6 6.5 6.5 6.5
Notes 18.0 6.5 6.5 6.5
Demanddeposits 22.5 6.5 6.5 6.5
Quasi-money 31.8 22.1 21.2 20.6
Term deposits innational currency 6.1 6.5 6.5 6.5
Deposits in foreign currency 31.9 22.1 21.2 20.6
Import deposits 50.7 22.0 15.6 17.7
Memorandum items:
Nominal GDP (CDF billion) 3,366 3,837 4,378 5,001
Money stock, including importation deposits 278.8 318.7 363.8 416.1
Money circulation speed 12.5 12.5 12.5 12.5
Foreign currency deposits, as a percentage of M 2 48.1 51.5 54.7 57.8
Foreign currency deposits, as a percentage o fdeposits 86.9 88.4 89.6 90.7
Market intermediationratio 21 29.8 18.5 19.0 19.3
I1Prelininary
21Fiduciary circulation excludingbanksideposits
120
Table 21. DemocraticRepublic of Congo: i\lternative scenario - Balance of payments, 2006 - 2008
2005 2006 2007 2008
E n Roj. Proj. Pmj.
(Millions ofUS dollars, unless otherwise indicated)
Balance ofmercbandize trade -165 -389 -449 -447
Exports, fob 2,069 2,350 2,585 2,973
Imports, fob 2,234 2,740 3,034 3,420
Balance o fservices -325 -326 -466 -655
Receipts 343 474 593 741
Expenditures 668 800 1,059 1,396
Balance o fgoods and services -490 -715 -915 -1,102
Receipts 2,412 2,824 3,178 3,714
Expenditures 2,902 3,540 4,093 4,816
Balance o f income -320 -380 -478 -583
Receipts 105 124 152 185
Expenditures 425 504 630 769
Balance ofnet transfers 210 255 289 375
Current account balance (excludine man@ - - -1.103
-600 -840
Balance o f cavital __
600 - jJg3
840
Net capital transfers 361 487 668 887
Official assistance 57 487 563 724
Programgrants 13 27 0 0
Project grants 44 460 563 724
Other grants 303 0 104 162
Non-monetary capital 259 421 492 592
Private capital -127 38 124 208
Direct inveshnents 257 302 375 380
Portfolio investments -384 -264 -251 -172
Errorsandomissions 0 0 0 0
Official capital 387 383 368 385
Grossdrawings 242 368 331 333
Programloan 107 18 126 127
Projectloan 135 350 205 206
Amortization due (excluding IMF) -164 -285 -254 -244
Special fmancing 256 0 0 0
Net change inarrears (excluding IMF) 0 0 0 0
Consolidationof arrears 0 0 0 0
Debt service relief 256 0 0 0
HIPC Initiative 53 300 292 296
Monetary capital (-)increase -21 -77 -44 -43
Funding gap (+) / Overfinancing(-) 0 8 -12 -125
121
LI e
-.->.2 c p
.e
Lr, D 3
M 4
e