Economy - overview: The economy of the Democratic Republic of the Congo - a nation endowed with vast natural resource wealth - continues to struggle.
Systemic corruption since independence in 1960, combined with countrywide instability and conflict that began in the early-90s, has dramatically reduced national output and government revenue and increased external debt. With the installation of a transitional government in 2003 after peace accords, economic conditions slowly began to improve as the transitional government reopened relations with international financial institutions and international donors, and President KABILA began implementing reforms.
Renewed activity in the mining sector, the source of most export income, boosted Kinshasa's fiscal position and GDP growth, but low commodity prices are leading to slower growth, rising inflation, and a growing fiscal deficit. An uncertain legal framework, corruption, and a lack of transparency in government policy are long-term problems for the large mining sector and for the economy as a whole.
Much economic activity still occurs in the informal sector and is not reflected in GDP data. The DRC signed a Poverty Reduction and Growth Facility with the IMF in 2009 and received $12 billion in multilateral and bilateral debt relief in 2010, but, at the end of 2012, the IMF suspended the last three payments under the loan facility - worth $240 million - because of concerns about the lack of transparency in mining contracts. In 2012, the DRC updated its business laws by adhering to OHADA, the Organization for the Harmonization of Business Law in Africa. The price of copper – the DRC’s primary export - plummeted in 2015 and remained at record lows during 2016, reducing government revenues, expenditures, and foreign exchange reserves.
Definition: This entry briefly describes the type of economy, including the degree of market orientation, the level of economic development, the most important natural resources, and the unique areas of specialization. It also characterizes major economic events and policy changes in the most recent 12 months and may include a statement about one or two key future macroeconomic trends.
Source: CIA World Factbook - This page was last updated on July 9, 2017