(Ecofin Agency) - The Democratic Republic of Congo and the International Monetary Fund have reached an agreement on the first review of the Extended Credit Facility (ECF) granted to the country. The information was reported by the Bretton Woods institution in a statement issued yesterday.

Approved at $1.52 billion by the IMF last July, this ECF agreement aims to help the country “to raise revenues, reducing non-priority spending, and ensuring efficient and transparent use of public funds, including the SDR allocation.” The DRC government has committed to many reforms that will enable it to achieve this goal. These commitments include "improving public financial management," modernizing and digitizing tax administration, restoring the proper functioning of the VAT system, implementing an excise duty traceability system, and rationalizing tax expenditures and non-tax burdens.

“Improving governance remains a key cornerstone of the program, with continued emphasis on strengthening the management of extractive resources, enhancing public finance transparency, accountability and efficiency, and addressing corruption and money laundering. The authorities are working on amendments to the law on anti-money laundering and combating the financing of terrorism, to meet global standard recommendations, and the asset declaration framework in line with Article 99 of the Constitution,” said Mercedes Vera Martin who led the IMF team and conducted discussions with authorities in Kinshasa.

The covid-19 outbreak and the measures taken to curb it have weakened the DRC's economy, which has fallen into recession after 18 years of growth. From an increase of 5.8% in 2018 and 4.4% in 2019, the country's GDP fell by 1.7% in 2020. However, the AfDB expects the economy to rebound if the pandemic is well managed.

As a reminder, the ECF is an IMF mechanism that provides financial assistance to countries experiencing economic difficulties. If approved by the IMF Board, this first review should continue the disbursement of financing to Kinshasa.

Jean-Marc Gogbeu (intern)