Government posts budget surplus in H1 despite commodity slump

September 1, 2015 6:09 AM

The price pressures on the mining sector, which accounts for some 20 percent of GDP, led the government last week to cut its growth forecast for 2015 to 8.4 percent, down from 10.3 percent as recently as May.

Workers at Tenke Fungurume, a copper mine in the southern Congolese province of Katanga, check bundles of copper cathode sheets ready to be loaded and sent out to buyers January 29, 2013. REUTERS/Jonny Hogg

Democratic Republic of Congo posted a budget surplus of 39.8 billion Congolese francs ($43 million) in the first half of 2015 despite a slump in prices for its commodity exports, the central bank said on Monday.

However, that was well down from the 110.3 billion Congolese franc surplus recorded in the first half of 2014, the bank's mid-year report showed. The report cited an expensive decentralisation process and agricultural investments.

Congo, Africa's leading copper producer and a significant exporter of gold, cobalt, diamonds and tin, has also been hit hard by falling metal prices, linked to fears of slowing demand in China, the world's top industrial metals consumer.

Benchmark copper on the London Metal Exchange closed last Friday's trading at $5,135 a tonne after touching six-year lows earlier in the week at $4,855 a tonne.

The overall value of Congo's exports fell by 17.2 percent in the first half of the year compared to the same period, the bank said. The value of copper exports, which represents more than half of the total, fell by 25.8 percent to 2.7 trillion Congolese francs.

The bank added that public expenditures were up 7.7 percent in 2015, although the government's critics regularly accuse it of underfunding priorities like national elections in 2016, which opponents say the president is trying to delay, and the creation of new provinces as part of the decentralisation initiative.

(1 USD = 926.4759 Congolese francs)