“Bloc-notes” editorial for March 2017- The Congo
The 2017 Finance Law enacted on December 31st by the President of the Republic, His Excellency Denis SASSOU NGUESSO falls within an international context marked by the falling oil prices. This has led to macroeconomic imbalance in most oil-producing countries, as is the case in the Congo, where a large part of the budgetary resources come from the export of hydrocarbons.
With a balanced budget for the year 2017 in revenue and expenditure amounting to 2.7 billion CFA francs as against 3.6 billion CFA francs in 2016, and a net reduction of – 24%, the state has tried as much as possible to rationalize its spending to reflect the decline in oil revenues.
Despite this economic downturn, the economic outlook for 2017 remains encouraging. The expected growth rate is 3.4%, compared to 2.6% in 2016. This will be driven mainly by the continuous outstanding infrastructure investment projects by the State, which will offer many market opportunities to local businesses and foreign investors. In the oil sector, the exploitation of new oil fields like MOHO North will also enable the country to increase its production. Finally, the remarkable dynamism of non-extractive sectors such as the manufacturing, agricultural and telecommunications sectors will also serve as drivers to the growth of the country.
However, there are still concerns about the status quo of oil prices in 2017 compared to 2015 and 2016. If oil prices do not rise to a reasonable level, the country may experience a painful economic slump that may oblige the authorities to seek for assistance from International Donors. However, the 30th November 2016 agreement between OPEC members on reducing their production to raise oil prices is encouraging and a sign of hope for all oil-producing countries.
CAC International has accompanied companies in the Congo since 2006, and thus could not remain on the sidelines of the debate on the 2017 budget of the Republic of Congo. On Thursday 16th of March 2017, CAC organized an information seminar on the Finance Law 2017 at the Olympic Palace Hotel. This was an opportunity for fruitful exchanges with the economic operators of the country. The expertise of CAC International’s Tax & Legal professionals will enable them to address the 2017 fiscal year with more serenity.
This year, the Republic of Congo faces its destiny. The outlook for economic growth seems good despite the slow recovery in oil prices. By improving on the mobilization of non-oil tax revenues, the continuation of ongoing projects under the 2012-2016 National Development Plan and other investment projects, the Congo would be able to provide itself with the means to succeed in 2017.