Congo government proposes 42% budget increase in 2022

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KINshasa, Nov 15 (Businesshala) – The prime minister of the Democratic Republic of Congo on Monday proposed government spending of 20.73 trillion Congolese francs ($9.94 billion) in 2022, up 41.8% from this year’s budget.

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Prime Minister Sama Lukonde Kyenge told parliament that growth would be made possible by stronger economic growth, better revenue collection and higher donor funding.

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Despite the continued impact of COVID-19, Congo’s public finances have improved significantly this year due to higher production of the main exports, copper and cobalt, borrowing from donors and government efforts to boost tax collection.

By the end of August, foreign exchange reserves reached $3.3 billion, or 13.5 weeks worth of imports, up from $710.3 million at the time of Lukonde’s government was sworn in in April. By the end of October Congo had already exceeded forecasted revenue for the whole of 2021.

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“With this performance, we expect the country to meet its potential and reach an even higher budget with more revenue mobilization efforts,” Luconde said.

He said the government would further increase tax revenue by digitizing customs and other tax reporting, identifying mining companies not entitled to certain tax breaks, and expanding the tax base from telecom services.

Previous Congolese governments have struggled to deliver on promises to meaningfully expand public revenues and have generally only spent half of what their budgets make up for.

The current government has benefited from extensive donor aid, including the International Monetary Fund, which resumed lending to Congo in 2019, seven years after the IMF suspended its last lending program.

In July, the IMF agreed a three-year, $1.52 billion extended loan facility with President Felix Tshisekedi’s government to support economic reforms and recovery from the pandemic. (Reporting by Aaron Ross and Hereward Holland; Writing by Hereward Holland; Editing by Jan Harvey)

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