The Democratic Republic of the Congo will continue to record strong GDP growth over the next five years on the back of rising copper production and a stable currency. A negative outlook for political risk over the next two years will temper the headline figure over this period and has kept our forecasts slightly below consensus .
While recent data released by the Banque Centrale du Congo has suggested a budget surplus in the first half of 2015, we maintain that the DRC will in fact record a fiscal deficit over the next five years. A weak tax ratio and low commodity prices will prevent the government from generating the revenue it needs over this period.
The Banque Centrale du Congo will maintain its key policy rate of 2.0% through the remainder of 2015 and into Q116. Inflation will remain low throughout this period thanks to low oil and food prices and a stable currency. Increasing political violence in the build up to the 2016 election poses the biggest risk to this outlook but will not grow to sufficient levels to affect national monetary policy.
The Democratic Republic of Congo's current account deficit will not narrow as much as previously expected this year after economic turmoil in China has led us to revise our forecasts for export growth. Political risk will limit the scope to finance this deficit, but investment and donor contributions will be sufficient to sustain it over our forecast period .
The likelihood of sporadic violence in the build up to the Democratic Republic of the Congo's presidential election next year is increasing as key political figures have hinted heavily towards their intention to run.
Key Risks To Outlook:
A sharper-than-expected fall in copper prices would cause mining investment to slow further.
Violence in the copper-producing province of Katanga currently poses little risk to export growth, but an escalation could cause disruptions at key mines.
A major flare-up in violence as the 2016...
The Democratic Republic of Congo Country Risk Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in Congo, Dem. Rep.. It is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market.
An influential new analysis of Congo, Dem. Rep.'s economic, political and financial prospects through end-2019, just published by award-winning forecasters, BMI Research.
- Forecast the pace and stability of Congo, Dem. Rep.'s economic and industry growth through end-2019.
- Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
- Assess the critical shortcomings of the operating environment that pose hidden barriers and costs to corporate profitability.
- Contextualise Congo, Dem. Rep.'s country risks against regional peers using BMI's country comparative Risk Index system.
- Evaluate external threats to doing business in Congo, Dem. Rep., including currency volatility, the commodity price boom and protectionist policies.
BMI provides our fully independent 5-year forecasts for Congo, Dem. Rep. through end-2019 for more than 50 economic and key industry indicators. We evaluate growth, and also forecast the impact of economic management.
Economic Outlook Contents
The Democratic Republic of Congo Country Risk Report features BMI's forecasts with supporting analysis for 2015 through to end-2019, set against government views and BMI's evaluation of global and regional prospects.
Key Areas Covered:
- Full 10-year forecasts with data - for key macroeconomic variables including GDP (real growth and per capita), population, inflation, current account balance and the exchange rate.
- BMI's comprehensive Risk Index system - rates each country worldwide for economic and political risk, and rates the business environment, within a global and regional context.
- Economic Activity - real GDP growth, employment, inflation, consumption (retail sales and confidence).
- Balance of Payments - trade and investment, current and capital account.
- Monetary Policy - interest rate trends (bank lending and deposit rates) and inflation (producer price and consumer price).
- Exchange Rate Policy - currency controls, foreign investment flows, exchange rates and foreign exchange reserves.
- Fiscal Policy - macroeconomic strategy and policies, government finance and tax reforms.
- Foreign Direct Investment - approvals, inflows and climate.
- External Debt - debt profile (short and long-term plus public and private sector obligations).
- Global Assumptions - forecasts for each year to end-2019 covering: major commodities, growth in key regions, inflation, and interest and exchange rates, in the United States, Japan, China and the eurozone.
- Rely upon BMI's 100% independent forecast scenarios for Congo, Dem. Rep. and underlying assumptions - we take no advertising and are privately-owned.
- Exploit the benefits of BMI's comprehensive and reliable macroeconomic database on Congo, Dem. Rep., sourced and fully maintained by BMI from an extensive network of private sector, government and multilateral contacts.
- Gain key insights into the current and future direction of government economic policy, which could significantly affect your company's business prospects, from BMI's team of analysts and economists.
What are the political risks to doing business in Congo, Dem. Rep. over the next 5-years?
BMI's Congo, Dem. Rep. country Risk Index evaluates the short- and medium-term threats to political stability.
Political Outlook Contents
- SWOT Analysis for the Congo, Dem. Rep. Market - Political Strengths, Weaknesses, Opportunities and Threats facing Congo, Dem. Rep..
- Political Stability and Risk Assessment - BMI's Risk Index assesses explicit short- and long-term risks to political stability; latest positioning and trends for Congo, Dem. Rep.'s risk are compared with regional and global averages.
- Current Administration and Policy-making BMI assesses the threats to the continuity of economic policy, and likely changes to the business operating environment.
- Long-Term Political Outlook BMI examines the structural risks to the stability of Congo, Dem. Rep.’s political system and the dominant public policy issues likely to affect decision-makers, and outlines scenarios for how the state could evolve in the medium to long term.
- Benchmark Congo, Dem. Rep.'s risk profile against its neighbours, the global and regional average, allowing easy comparison of risks between key business markets.
- Identify, evaluate and anticipate political and security risks to the business environment, and to your company's current operations and future plans.
- Gain valuable insights into government and policy-making, through BMI's specialist team of analysts and economists, and their network of private and public sector sources.
What are the current operational risks and difficulties associated with doing business in Congo, Dem. Rep.?
The Operational Risk section gives an evaluation of current risks and difficulties associated with operating in the market. It also provides a brief overview of the regional Operational Risk Index which benchmarks Congo, Dem. Rep. against its neighbours.
Operational Risk Contents
The chapter provides a summary of the main threats in the country, within:
- Labour Market Risk (Education; Availability of Labour; and Labour Costs)
- Logistics Risk (Market Size and Utilities; Quality and Extent of the Transport Governance)
- Trade and Investment Risk (Economic Openness; Government Intervention; and Legal Risks)
- Crime and Security Risk (Crime; Terrorism; and Interstate Conflict risks).
The report also drills down in greater depth to address key issues in one of the following segments most critical to the market:
- Transport network, economic openness, cost and availability of labour, crime risks, bureaucratic environment, market size and utilities, and interstate conflict.
- Assess your company’s exposure to country specific operational and business risks, using BMI’s insight on the current dangers of operating in the market.
- Evaluate Congo, Dem. Rep.’s risk profile against its regional peers, helping you understand the market’s strengths and weaknesses in relation to other countries.