IMF Programs and Economic Growth in the DRC

TL;DR

This paper examines the impact of IMF programs on the Democratic Republic of the Congo's economic growth, emphasizing governance and policy effectiveness over mere program participation.

Contribution

It highlights that effective leadership and governance are crucial for development, rather than IMF assistance alone, challenging the assumption that IMF programs directly drive growth.

Findings

DRC achieved strong growth without IMF programs (2012-2016).

Reopening IMF cooperation occurred amid inflation pressures.

Effective governance is key to successful economic reforms.

Abstract

At the end of 2012 the International Monetary Fund (IMF) has suspended its financial assistance to the Democratic Republic of the Congo (DRC). Due to inflationary pressures which occurred in the last quarter of 2016, several decision-makers called for a reopening of a formal cooperation with the IMF. This process was formally completed in December 2019. The restart of IMF programs was greeted with satisfaction by politicians and widely commented in the media. However, recent history shows that the DRC managed to achieve exceptional economic performance, between 2012 and 2016, without being in a formal cooperation with the IMF. Some people wonder whether IMF assistance is a curse for recipient countries? We argue that the underlying problem has nothing to do with accepting or not the IMF assistance, but rather in the ability of policy makers to establish effective leadership and good governance for the development and implementation supporting structural reforms.