Congo Economic Update, Third Edition, September 2016 : Adjusting for Better Social and Economic Development in an Era of Low Oil Prices
The decline in international oil prices over the past two years has resulted into an economic crisis in the Republic of Congo that could forestall the transformation efforts to move the country towards higher middle income status. A key strategy th...
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| Format: | Report |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2017
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| Online Access: | http://documents.worldbank.org/curated/en/696911496916361336/Adjusting-for-better-social-and-economic-development-in-an-era-of-low-oil-prices http://hdl.handle.net/10986/27904 |
| Summary: | The decline in international oil prices
over the past two years has resulted into an economic crisis
in the Republic of Congo that could forestall the
transformation efforts to move the country towards higher
middle income status. A key strategy that government has
pursued in recent years has been to adjust the fiscal policy
to provide more resources for capital development in line
with the National Development Plans. This strategy is
expected to be continued into the medium term in order to
address the binding constraints on growth, most notably the
country’s huge infrastructure deficit. However, the
intention to increase the level of capital investment has
neither been matched by similar ones to raise investments in
human capital development nor with effort to make public
spending more efficient and effective. This third Edition of
the Congo Economic Update discusses the importance of
undertaking fiscal adjustments to accommodate the new
reality of lower oil revenues and to shift into a more
balanced and inclusive development strategy. This edition
argues that the current fiscal crisis in Congo resulting
from the decline in global oil prices will make it difficult
for the country to sustain fast growth unless the country
adopts more prudent fiscal management and a balanced
approach that builds both physical capital and achieves
significant improvements to human capital. Therefore, a
deliberate effort has to be made to ensure that the fiscal
adjustments do not result in major decreases to the level of
expenditure on health and education. In addition, the
government must implement measures to improve the level of
efficiency and effectiveness of spending in these sectors. |
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