ADVERTISEMENT

Congo PM proposes deep budget cuts, warning of hyperinflation

Congo, Africa's leading copper producer, has been hard-hit by the downturn since last year in commodities markets. The oil and mining sectors account for some 98 percent of its export earnings.

Congo PM proposes deep budget cuts, warning of hyperinflation

Democratic Republic of Congo's prime minister proposed cutting operating costs of government ministries and other public services by 30 percent on Monday, warning of a risk of hyperinflation if the government failed to act.

The government announced earlier this month that it would propose a 22 percent reduction to its initial 8.48 trillion Congolese franc ($8.9 billion) budget for the year, largely because of low global metals prices.

Prime Minister Augustin Matata Ponyo presented details of the revised budget to parliament on Monday, which must debate and then vote on the proposal. The plan includes slashing spending on healthcare equipment by over 90 percent.

"If nothing is done, we run the risk of suffering from the hyperinflation that is hitting other countries, and of reliving the nightmare of the 1990s," Matata told lawmakers.

ADVERTISEMENT

Inflation in autocrat Mobutu Sese Seko's Congo, then known as Zaire, hit an all time high rate of nearly 24,000 percent in 1994, sending the local economy crashing.

The government's most recent inflation projection foresaw a rate of 1.4 percent in 2016.

However, after years of near total exchange rate stability, declining reserves of foreign currency have placed pressure on the franc, causing it to lose more than 2.5 percent of its value against the dollar this year.

Matata also said that Congo would scale back the size of a planned international bond issue to finance infrastructure projects from 653 billion to 256 billion francs.

(951.9 francs = 1 dollar)

JOIN OUR PULSE COMMUNITY!

Unblock notifications in browser settings.
ADVERTISEMENT

Eyewitness? Submit your stories now via social or:

Email: eyewitness@pulse.ng

Recommended articles

Lagos postpones eagerly anticipated Easter boat regatta indefinitely

Lagos postpones eagerly anticipated Easter boat regatta indefinitely

Third Mainland Bridge reopens in 1 week, formal ceremony later - Minister

Third Mainland Bridge reopens in 1 week, formal ceremony later - Minister

Sanwo-Olu opens 'Sunday market' on Good Friday for Easter shopping

Sanwo-Olu opens 'Sunday market' on Good Friday for Easter shopping

Wike thanks Tinubu for the opportunity to serve

Wike thanks Tinubu for the opportunity to serve

Barrister Bida pens special birthday prayer for President Tinubu, Nigerians

Barrister Bida pens special birthday prayer for President Tinubu, Nigerians

Tinubu’s aide distributes food items to 1,750 persons in FCT, Kwara

Tinubu’s aide distributes food items to 1,750 persons in FCT, Kwara

Court grants senator accused of forging NYSC certificate ₦50m bail

Court grants senator accused of forging NYSC certificate ₦50m bail

Delta monarch declared wanted by military surrenders to police

Delta monarch declared wanted by military surrenders to police

Renowned Canada-based Nigerian playwright, Oguntokun is dead

Renowned Canada-based Nigerian playwright, Oguntokun is dead

Pulse Sports

Nigeria vs Mali: Has Finidi George done enough to land Super Eagles job permanently?

Nigeria vs Mali: Has Finidi George done enough to land Super Eagles job permanently?

I want to emulate Keshi and win the AFCON - Finidi George shares ambitious Super Eagles dream

I want to emulate Keshi and win the AFCON - Finidi George shares ambitious Super Eagles dream

Michelle Alozie: I had to do it because of African referees

Michelle Alozie: I had to do it because of African referees

AC Milan star reveals he was named after Super Eagles legend Tijani Babangida

AC Milan star reveals he was named after Super Eagles legend Tijani Babangida

Give him the job! Super Eagles fans beg NFF to make Finidi George permanent coach after Nigeria's win over Ghana

Give him the job! Super Eagles fans beg NFF to make Finidi George permanent coach after Nigeria's win over Ghana

Super Eagles 2-1 Black Stars: Nigerians praise Iwobi, Lookman, Finidi George after friendly victory against Ghana

Super Eagles 2-1 Black Stars: Nigerians praise Iwobi, Lookman, Finidi George after friendly victory against Ghana

ADVERTISEMENT
ADVERTISEMENT