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Congo’s Growth Towards Economic Diversification

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Congo’s Growth Towards Economic Diversification

Congo’s economy is heavily dependent on the hydrocarbon sector. To promote sustainable growth, Congo must diversify its economy, and ecotourism is emerging as one of the sectors to consider.

Structure of the Congolese economy

Dependence on the oil and gas sector

Congo’s economy is heavily dependent on the energy sector, a reality that has persisted over the past decade. The oil sector plays a dominant role in the Congolese economy, accounting for 42 % of gross domestic product (GDP), 80 % of total exports, and 60 % of government revenues.

In contrast, the primary sector contributes only 6 % of the country’s GDP, the secondary sector 6.5%, and the tertiary sector 33 %. It is important to note, however, that while the oil sector largely dominates GDP, it employs only 20 % of the working population. The majority of the workforce, especially young people, is employed in the informal sector due to its regulatory flexibility.

Diversification of the Congolese economic system is essential to ensure sustainable growth. Dependence on natural resources is not a viable solution for the country, given the volatility of this sector. These resources can be depleted and the returns are not inclusive. Although this activity supports the Congolese economy, diversification is needed.

Diversification through ecotourism

A World Bank report highlighted two sectors that could make a significant contribution to the diversification of the Republic of Congo’s economy: trade facilitation and ecotourism. On the one hand, export-friendly policies such as tax incentives, reduced entry barriers, and the benefits of regional integration can help the country reduce its dependence on oil exports. On the other hand, promoting ecotourism can help create jobs and develop the service sector.

To maximize this potential, the government should introduce regulations in the tourism sector, strengthen the protection of natural resources, invest in infrastructure, and develop incentive policies to attract investors.

Achieving sustainable goals in ecotourism

Economic impact of ecotourism

Ecotourism can have a positive impact on Congo’s local economy in several ways. First, it generates an additional source of income through the sale of ecotourism-related products and services. These funds can then be reinvested in the local economy, stimulating economic growth.

In addition, ecotourism can play an important role in creating jobs for local communities. Jobs can be developed in areas such as accommodation, catering, guiding, and the sale of handicrafts. These jobs help raise average incomes and reduce unemployment.

Finally, ecotourism can stimulate the development of local infrastructure. For example, investment in roads, airports, and transportation services can have a positive impact on other sectors of the local economy. However, measures must be taken to ensure that the benefits of ecotourism are shared equitably within local communities and to minimize the environmental impact of these activities.

Investing in the sector

A recent conference in Kinshasa brought together several investors with the main goal of diversifying the Congo’s economy. According to the rating agency Bloomfield, Congo’s country risk is rated at 5.1 in 2022 and could rise to 5.5 in 2023, an improvement of 40 points.

During the conference, the Minister of Finance underlined the success of the event, highlighting the fruitful dialogue between various key players. The participation of rating agencies and external communities was also a positive aspect. However, the Minister noted that the DRC’s economy still faces several obstacles, particularly in terms of infrastructure, fiscal policy, and insecurity, which can deter investors.

Despite these challenges, the government is determined to make every effort to regain investor confidence. Macroeconomic stability and the implementation of effective fiscal and budgetary policies have been identified as key government priorities.

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