Today, the IMF’s executive board will consider whether to grant the Republic of the Congo’s request for a bailout.
Congo is currently burdened by some $9 billion worth of debt—equivalent to 110% of the country’s GDP. With its economy heavily dependent on oil, the country’s debt problem has been accentuated by a fall in oil prices in recent years. While it is unclear whether the IMF will grant Congo’s request for a bailout, Brazzaville has been seeking assistance from the lender since last year, while an executive board decision is generally the final step to receiving a bailout package.
Regardless of what the IMF decides today, Congo’s economy is likely to receive a considerable boost after the country joined OPEC last month. Indeed, Congo’s accession to the group should see its oil industry open up to foreign investors, while the opening of two plants is expected to see the country’s oil production increase by some 65% this year.
Nevertheless, a favourable decision by the IMF today will be important not only for addressing Congo’s debt, but also improving investor confidence to attract interest in its oil industry.
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Alex is a senior analyst in the Current Developments team with a primary focus on the Americas. He also serves as an editor on The Daily Brief.