The International Monetary Fund board on Monday approved a three-year $455 million loan for the Republic of Congo to help undergird the small African nation’s economic recovery.
The global crisis lender will provide $90 million immediately under the Extended Credit Facility to help the oil-dependent country deal with the effects of the COVID-19 pandemic.
The economy “is expected to strengthen in the second half of the year, supported by vaccine rollout, social spending, and domestic arrears, payments,” IMF Deputy Managing Director Kenji Okamura said in a statement
“However, the nascent recovery is facing significant risks, including a possible worsening of the pandemic (and) continued volatility in oil prices.”
But reducing the nation’s “debt vulnerabilities” will be key, Okamura said, noting the government is working on restructuring its debt.
The Republic of Congo, a land of 5 million people that abuts the vast Democratic Republic of Congo, relies on oil for most of its wealth and has built up debt to China through loans that helped build some of its petroleum infrastructure.
The IMF estimates the economy will grow 2.4% this year, after a slight contraction in 2021.