Publication: Democratic Republic of Congo Economic Update, July 2025: Reassessing Tax Incentives - Falling Short of Promised Growth and Equity
Loading...
Published
2025-07-01
ISSN
Date
2025-09-02
Author(s)
Editor(s)
Abstract
The DRC Economic Update (DRCEU) evaluates the recent growth performance and macroeconomic policies in the Democratic Republic of Congo (DRC), providing a basis for policy dialogue with the Government and other stakeholders. The first section of the Economic Update assesses the drivers of growth and the macroeconomic framework, including three-year perspectives that highlight risks and challenges. The second section examines tax expenditures in greater detail, focusing on their recent evolution and the economic impact of tax incentives.
Link to Data Set
Citation
“World Bank. 2025. Democratic Republic of Congo Economic Update, July 2025: Reassessing Tax Incentives - Falling Short of Promised Growth and Equity. © World Bank. http://hdl.handle.net/10986/43652 License: CC BY-NC 3.0 IGO.”
Digital Object Identifier
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Related items
Showing items related by metadata.
Publication Republic of Congo Economic Update, 10th Edition, June 2023(Washington, DC: World Bank, 2023-06-26)This is the tenth edition of the Republic of Congo Economic Update. Each edition of this annual report presents an overview of the Republic of Congo’s (ROC) evolving macroeconomic position, followed by a detailed exploration of a specific topic. The first chapter of this year’s update presents recent economic developments and macroeconomic outlook and risks. It also includes policy actions that could help strengthen fiscal and debt sustainability, contain food inflation, and sustain economic recovery. The second chapter discusses fossil fuel subsidies, which represent a significant fiscal burden in the Republic of Congo.Publication Republic of Congo Economic Update, 12th Edition(Washington, DC: World Bank, 2025-09-15)This is the twelfth edition of the Republic of Congo Economic Update. Each edition of this annual report presents an overview of the Republic of Congo’s (ROC) evolving macroeconomic position, followed by a detailed exploration of a specific topic. The first chapter of this year’s update presents recent economic developments and the medium-term outlook, as well as policy options going forward. The second chapter, the special topic, explores the development and protection of Congo’s assets in order to improve living standards.Publication Democratic Republic of the Congo Country Economic Memorandum (CEM) - Pathways to Economic Diversification and Regional Trade Integration(Washington, DC: World Bank, 2023-10-26)Economic Diversification in the DRC is hindered by a business environment and key regulatory and fiscal constraints that are not conducive to private sector-led growth. Policies aimed to address the main bottlenecks hindering sustainable and inclusive growth include: i) improving business regulation; ii) promoting access to digital, electricity, and financing; iii) addressing inefficient taxation and fiscal policy challenges; iv) encouraging fiscal decentralization; and v) attracting value chain development. The two case studies discussed in complementary reports are intended to better illustrate the opportunities and challenges described in the Country Economic Memorandum and considered important for economic diversification and job creation through structural transformation and stronger trade and regional integration. The focus is on two key potential growth-driving sectors (mining and agribusiness) that offer substantial opportunities for expansion in the context of global energy transition, food insecurity, and further regional integration. While opportunities and constraints specific to the EV battery-related mining and cassava value chain are presented (and include a climate dimension), most of the challenges and recommendations could also apply to several other products or sectors of the economy (e.g., maize or any manufactured or processed product). The purpose of the illustrative case studies is to highlight how the business environment in general is not attractive to private investment, SME expansion, or product competitiveness.Publication Democratic Republic of Congo (DRC) Country Climate and Development Report(Washington, DC: World Bank, 2023-11-16)This Country Climate and Development Report (CCDR) aims to support DRC's efforts to achieve its development goals within a changing climate by quantifying the impacts of climate change on the economy and highlighting policies and interventions needed to strengthen the country's climate resilience on many different levels. The report captures the interplay between DRC's development, climate challenges, and climate policies, with the objective of identifying synergies and tradeoffs. The CCDR supports the strategic vision of the Government of DRC as articulated in its 2030 National Strategic Development Plan ("Plan National Stratégique de Développement" (PNSD)) to reach middle-income country (MIC) status by 2035, and by 2050, become a diversified inclusive economy spurred by sustainable growth. It identifies the priorities needed in order to launch the most impactful, cost-effective actions to boost adaptation, build resilience, and foster low-carbon growth, while delivering on broader development goals. These are critical objectives, especially in fragile countries such as the DRC.Publication Central African Republic Economic Update, July 2021(World Bank, Washington, DC, 2021-07)The economy of the Central African Republic (CAR) decelerated in 2020 compared to 2019. Despite a relatively contained health impact, the coronavirus disease 2019 (COVID-19) pandemic has had a significant impact on the country’s economy, with the disruption in global value chains, low external demand, and domestic containment measures that significantly affected trade, transport, and tourism. Nevertheless, CAR’s GDP growth of 0.8 percent has outpaced the average of regional peers (−2.9 percent) and countries affected by fragility, conflict and violence (FCV) (−1.7 percent). On the supply side, the positive dynamic of the agriculture sector prevented the economy from entering a recession, and the forestry and telecommunications sectors were more resilient than expected. On the demand side, private consumption contracted in 2020, reflecting a decline in household income owing to the pandemic. As a result, the extreme poverty rate increased from 70.7 percent in 2019 to 71.4 percent, affecting a total of more than 3.4 million people, in 2020. CAR’s current account balance (CAD) deteriorated in 2020. The current account deficit widened from 4.8 percent of GDP in 2019 to 8.7 percent of GDP in 2020, driven by weak external demand and private transfers as well as an increased deficit of the balance on goods. With the COVID-19 pandemic, goods exports declined while non-oil imports were boosted by donor-funded investments. CAR’s current account deficit is not expected to be as severe as that of comparator FCV, CEMAC, and Sub-Saharan African (SSA) countries. The capital account balance improved significantly in 2020 due to the rise in external grants, while the financial account surplus shifted into a deficit. The improvement in the capital account has helped narrow the balance of payments deficit and increasing foreign reserves, which reached a level equivalent to about 3.5 months imports at end-2020.
Users also downloaded
Showing related downloaded files
Publication Togo Economic Update, August 2025: Boosting Growth and Restoring Fiscal Space in Uncertain Times(Washington, DC: World Bank, 2025-08-28)Togo’s economic trajectory in recent years has been shaped by both resilient performance and emerging vulnerabilities. The 2025 Economic Update underscores the urgency of restoring fiscal space and implementing strategic structural reforms to sustain private sector-led growth and job creation. Through an integrated analysis in two chapters, the report presents a nuanced narrative of the country’s macroeconomic outlook and delineates actionable policy paths to foster inclusive, sustainable development.Publication Congo Basin Forest Ecosystem Accounts and Policy Recommendations: A Regional Synthesis Report of Ecosystem Extent, Condition, Services, and Asset Accounts 2000-2020(Washington, DC: World Bank, 2025-08-01)This regional synthesis report of the Congo Basin Forest Ecosystem Accounts (2000-2020) compiled from data for each these six countries (namely: Cameroon, Central African Republic, Democratic Republic of Congo, Equatorial Guinea, Gabon, and Republic of Congo. Ecosystem accounting enables countries to assess the value of their ecological capital, a key component of national wealth, by monitoring changes in ecosystem extent, condition, and ecosystem services in both physical and monetary terms. The accounts follow the System of Environmental-Economic Accounting (SEEA) Ecosystem Accounting methods, a standardized framework that uses concepts, definitions, and classifications consistent with the System of National Accounts (SNA). The individual country reports are also available. The value of domestic benefits provided by the forest ecosystems is significant, ranging from one percent of GDP for Equatorial Guinea to 15.4 percent of GDP for the Central African Republic. With global climate regulation being especially important, reflecting more than 95 percent of the value in most countries. Forest ecosystems in the Congo Basin retained around 90.9 billion tons of carbon in 2020, equivalent to 333.5 billion tons of carbon dioxide, which is 10x the amount of the total global emissions from the energy sector in 2020 (34.5 billion tons). The total asset value of the Congo Basin’s forests has almost doubled from US$ 12.3 trillion in 2000 to US$ 23.2 trillion in 2020. The overall asset value without the global public good value of climate change regulation stood at US$ 106 billion in 2000 and US$ 154 billion in 2020. While the total asset values are increasing, the per capita values are not keeping up with population growth. If one excludes the global public good value of carbon the picture becomes more negative, with a decrease in per capita of forests across all countries. These accounts should be institutionalized and enhanced periodically to inform policy and planning. The Congo Basin forests offer substantial ecological benefits, many of which remain unmonetized. These forest ecosystem accounts can improve understanding and inform policy development relating to the natural resource management sectors and those that impact on these assets, and on monetization of these critical ecosystem services.Publication Uganda Country Climate and Development Report(Washington, DC: World Bank, 2025-09-10)The Country Climate and Development Report (CCDR) for Uganda examines the interplay between climate change and development. It presents how addressing climate change can support achieving the goals in Uganda’s Vision 2040 and Ten-Fold Growth Strategy, and help propel the country to upper-middle-income status. Uganda is the 14th most vulnerable nation to climate change, yet it is 163rd in readiness to address these risks, facing threats such as droughts and floods. The report highlights that, of the poorest households exposed to climate change, 80 percent already experience income loss from climate shocks. GDP could also drop by up to 3.1 percent by 2050 without additional climate action. Climate change poses numerous challenges, including increased variability in crop yields, potential internal climate migration of 12 million people by 2050, notable drop in labor productivity due to heat stress, increased health risks from waterborne diseases and malaria, and exposure of the country’s physical infrastructure to extreme climate events. To combat these challenges, the report recommends transitioning to a low-carbon, climate-resilient growth path by implementing four multisectoral intervention packages. These include boosting resilience through jobs for youth and services for the poor; promoting resilient and productive agriculture and natural resources with lower GHG emissions; developing climate-responsive energy, transport, and digital infrastructure; and fostering planned and climate-positive urbanization. Additionally, the report calls for whole-of-economy measures that strengthen governance of climate action, enhance preparedness for climate hazards including through improved early warning systems, operationalization of the national climate finance strategy, and incentivizing private sector participation. By implementing these intervention packages and whole-of-economy measures, Uganda can lower its risk to climate change and achieve sustainable economic growth.Publication Mapping Impact In Chad(Washington, DC: World Bank, 2025-06-25)In the Sahel, Adaptive Social Protection (ASP) is a set of social protection policies, systems, and programs that promote human capital, productivity, and resilience of the poorest and strengthen their capacity to prepare for, cope with, and adapt to shocks. Through the delivery of regular social safety nets, productive inclusion interventions, and shock-responsive programs, ASP has demonstrated strong positive impacts on various dimensions in the Sahel. For the poorest and most vulnerable, it has resulted in improvements in household welfare and food security, productivity, and resilience. More broadly, it has shown significant positive impacts on the economy, society, and future generations.Publication Port Reform Toolkit(Washington, DC: World Bank, 2025-07-31)Ports are undergoing constant transformation, induced by changes in the global economy, technology, or the environment. Port reform is influenced by factors that include aspirations for change underpinned by complex internal and external drivers. In a sector where public and private interests must work together, closely managing change is important. Having the right tools is key for a successful port reform and improvement process which enables economic growth, creates jobs, and fosters sustainable development. For over two decades, the Port Reform Toolkit has been one of the most comprehensive guides for implementing port reforms. Along the way, the Toolkit has evolved in response to changing sectoral trends. The first edition, published in 2001, established a common language for policymakers and port industry stakeholders. It has since become the established reference for port privatization, labor, and modernization programs. Further experiences from a first wave of port reforms in Latin America, Africa, and Asia in the 1990s and early 2000s informed the second edition of the Toolkit, which was released in 2007. By that time, ports in developing economies had attracted over 21 billion dollars in investments from over 200 public-private partnership projects. In this context, the Port Reform Toolkit enabled port stakeholders to provide strategic advice to governments and the private sector.