The Democratic Republic of Congo could exceed a forecast 6.5% economic growth in 2011 but must do more to increase transparency in the mining sector, the International Monetary Fund (IMF) said on Saturday.
Congo — which has large deposits of copper, cobalt and gold — is gearing up for general elections set for November 28 assuming it surmounts major logistical and funding challenges to ensure the polls go ahead on time.
The vote is seen as crucial for economic and political stability and will be the second since a five-year war ended in 2003, leaving millions dead.
Despite the pressures of funding polls and higher than expected inflation, the country has maintained financial discipline, the IMF said.
“Despite the difficult global economic environment, macroeconomic performance remains strong and economic growth during 2011 could be higher than the 6.5% previously projected,” Robert York, the IMF’s chief of mission to Congo, said in a statement.
The announcement came following a quarterly review linked to an existing three-year $560-million credit arrangement with the IMF.
Annualised inflation stands at 19.91%, higher than the 13% target set by the central bank, according to the bank’s website.
Economic activity is being supported by high global prices for mineral exports, but more should be done to raise domestic revenue to tackle poverty, York said.
“Making progress in enhancing governance and transparency in extractive industries is essential,” he added.
Congo’s government earlier this year sold mining assets far below their value in an undisclosed deal, with cash from the sales used to fund the elections, Reuters reported in August.
The government this week said unspecified mining deals with China and India would help pay for the presidential and parliamentary elections whose cost is put at $700-million — about 12% of the 2011 budget including donor financing.
The country produced nearly 500 000 tonnes of copper in 2010. Benchmark copper on the London Metal Exchange closed at $9 076 a tonne on Friday, about 10% below record highs from February.
President Joseph Kabila is hoping to be re-elected in November’s polls despite critics saying he has failed to tackle rampant corruption and instability in the east of the country. — Reuters