DEMOCRATIC REPUBLIC OF CONGO

RISK RATING
Severe
Default High Risk Score 8.00
Normal Average 6.55
Weighted Average 6.78
RISK RATING HISTORY
RISK RATING SCALE

Risk Rating Scale

Severe: 8.0 to 10
High: 6.0 to 7.9
Elevated: 4.0 to 5.9
Moderate: 2.0 to 3.9
Low: 0.0 to 1.9
EXCHANGE RATE
Country Outlook

A muddled response to the coronavirus outbreak, a possible Ebola flare-up, and continued political infighting have undermined the authority of Congo’s president at a critical juncture. President Tshisekedi’s disarrayed response to the coronavirus outbreak has wasted an opportunity for him to seem in charge of the country’s institutions. Instead, continued political infighting and confusion over his government’s response to the crisis has made him seem weak and out of touch. The DRC is facing a complete collapse of its revenue flows in the wake of the slump in demand for Congo’s raw materials. The decision to allow mining companies to maintain operations makes sense in the context of the government’s cash-strapped accounts. However, few miners are expected to remain operational as the coronavirus spreads. The country’s fragile coalition government is coming under growing strain as political infighting intensifies and the threat of mutinies, unrest, and insurgency intensifies as the provinces go unpaid by the central government in Kinshasa. As the state runs out of cash, there is a heightened prospect of provincial rebellions, urban unrest, and insecurity around mining sites, as well as defaults on existing repayment commitments.

  • A dysfunctional and polarised government has come out of the formation of a power-sharing pact between President Félix Tshisekedi and his predecessor Joseph Kabila, who remain locked in a contest over control of government revenue and security agencies. Through the influence of his political allies in the administration, Kabila still wields control over mining revenues, the army, and the intelligence agencies. The two rival factions disagree on the distribution of leadership positions of state-owned companies and state regulatory agencies among their allies. The parties also disagree over the organisation and functioning of a polarised government, including its harmonisation with presidential experts and advisors.
  • Heightened insecurity in northeastern provinces risks destabilising the government and the wider region. Rebel groups, unruly soldiers, and a plethora of militias still drive heightened risk of insecurity in the Northeast, especially in Ituri and the Ebola-affected areas of North Kivu. Growing insecurity in the East of the country would risk alienating some of the military command structures, while upsetting a regional power balance in the Great Lakes Region. If the violence escalates, a broader incursion from neighbouring states is likely, which would pose a serious threat to control over the security forces and the stability of the Congolese state.
  • Mining sector restrictions are likely to be delayed for as long as possible until the country’s COVID-19 crisis has reached significant proportions. Regardless, the impact of the pandemic will be catastrophic for DRC’s revenue flows, balance of payments, and government finances. Although the IMF has granted a credit facility, the need for multilateral support will become even more urgent as the economy risks collapse. Meanwhile, the DRC government is borrowing from the Banque centrale du Congo (BCC) to meet its spending requirements, and so breaching its fiscal guidelines. Without international or multilateral loans, the prospect of unrest and insecurity in the provinces will intensify in coming months.
CUMULATIVE AND DAILY COVID-19 INFECTIONS AND DEATH RATE
INTERNATIONAL MONETARY FUND | DATAMAPPER
Risk Perils
Political Instability
7.0
Expropriation, Nationalisation, Confiscation & Deprivation
7.0
Contract Frustration & Breach
7.0
Taxation
6.0
Bribery & Corruption
8.0
Regulatory Burden
7.0
Strikes, Riots & Civil Commotion
6.0
Security
7.5
Sovereign Default
5.0
Economic Volatiliy
5.0

Risk Rating Scale (small)

Severe
High
Elevated
Moderate
Low

Risk Score BTN

SECURITY MONITOR

ACLED DASHBOARD

MEDIA MONITOR

View Media Monitor BTN

RELATED ARTICLES