IMF and DRC Reach Staff-Level Agreement Amid Conflict and Economic Strains

A staff delegation from the International Monetary Fund (IMF), led by Mr. Calixte Ahokpossi, Mission Chief for the Democratic Republic of the Congo (DRC), concluded a mission to Kinshasa on May 13, 2025. The visit, spanning from April 30 to May 13, aimed to conduct the first review of the DRC’s economic and financial program under the IMF’s Extended Credit Facility (ECF). Following comprehensive discussions with Congolese authorities, a staff-level agreement was reached on the review, pending approval by IMF management and the Executive Board. A decision from the Board is expected by late June 2025.

Ongoing Conflict Poses Major Economic Challenges

The review took place against the backdrop of an intensifying armed conflict in the eastern provinces of North Kivu and South Kivu. Since late 2024, violence in these regions has led to the loss of thousands of lives, widespread displacement, and severe disruptions to local economies and public service delivery. The humanitarian and social toll of the conflict is immense, exacerbating the fragility of an already vulnerable region.

Despite the upheaval, the national economy demonstrated notable resilience. Real GDP growth reached a solid 6.5% in 2024, with projections indicating continued strength in 2025, exceeding 5%. The extractive sector remains the primary driver of this performance, underpinned by mineral exports and foreign direct investment.

Inflation Down, External Stability Strengthens

Amid conflict-induced fiscal pressures, macroeconomic indicators show signs of improvement. Since mid-2024, the Congolese franc has stabilized, supported by a tightening of monetary policy and the accumulation of international reserves. This policy mix has helped tame inflation, which returned to single-digit territory in April 2025 for the first time since mid-2022.

The current account deficit has narrowed, though it remains below optimal levels for import coverage. Nonetheless, the overall external position has strengthened, creating a more stable environment for trade and investment, even as fiscal challenges persist.

Budget Strains Worsen Amid Security and Social Pressures

The armed conflict has significantly strained public finances. By the end of 2024, domestic fiscal deficits overshot projections, driven by sharp increases in emergency security spending, public investment, and intergovernmental transfers. While robust revenue performance provided some buffer, it was insufficient to offset these unplanned outlays.

In 2025, budgetary pressures continue to mount. The closure of tax collection offices in conflict zones and exemptions on VAT and customs duties for essential food products have caused notable revenue shortfalls. Simultaneously, the government doubled military and police salaries in March to sustain morale, further escalating expenditures. Exceptional security spending remained high through April.

To address these imbalances, the government has pledged to recalibrate the ECF-supported program to reflect current realities. This includes safeguarding fiscal sustainability, prioritizing essential social and investment spending, and identifying compensatory revenue and expenditure measures in a supplementary 2025 budget law. Additional concessional financing from the World Bank and other development partners is anticipated and actively sought.

Structural Reforms Make Headway Despite Adversity

Despite conflict-related setbacks, the DRC continues to make commendable progress on structural reforms. Efforts to modernize public financial management are gaining momentum. Legal reforms aimed at enforcing stricter adherence to the expenditure chain have been adopted, though implementation remains uneven.

Key steps include the operationalization of the national Treasury, delegation of spending authority to line ministries, establishment of a treasury single account, and a shift to a resource-based fiscal framework. These reforms aim to shield government spending from the volatility of mining revenues—a critical step for long-term fiscal resilience.

Domestic revenue mobilization remains a top priority. Authorities are accelerating the rollout of a standardized VAT invoicing system, adopting plans to broaden the tax base, reducing inefficient exemptions, enhancing oversight of mineral exports to curb evasion, and combating customs fraud at borders.

Spending efficiency is also under the microscope, with a focus on better investment management and curbing payroll abuses. Transparency and governance improvements—particularly in the extractive industries—are essential to reducing corruption and fostering a more conducive business climate.

Building Climate Resilience Through RSF Reforms

The IMF team also emphasized the importance of preparing for upcoming reforms under the Resilience and Sustainability Facility (RSF). These measures aim to bolster the DRC’s ability to withstand climate shocks and play a proactive role in the global shift toward low-carbon development. The successful implementation of these reforms will not only enhance environmental sustainability but also improve the country’s economic stability and development prospects.

Acknowledgments and Next Steps

In his closing statement, Mr. Ahokpossi expressed appreciation to Congolese authorities, civil society, the private sector, and development partners for their engagement and support during the mission. The IMF reaffirmed its commitment to supporting the DRC’s reform agenda and helping it navigate the dual challenge of maintaining economic progress while responding to an escalating humanitarian crisis.

If approved by the IMF Executive Board, the agreement will unlock the next disbursement under the ECF and provide further financial and technical support to help the DRC achieve inclusive, resilient, and sustainable growth.