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Democratic Republic of Congo: Country Results Profile

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Democratic Republic of Congo: helping the country achieve a double-digit economic growth rate for the next 15 years

Democratic Republic of Congo: helping the country achieve a double-digit economic growth rate for the next 15 years


Overview

The Democratic Republic of Congo (DRC) has grown by some 6-7 percent during recent years. The main challenges to accelerate growth include the lack of infrastructure, the high poverty and unemployment rates, low agricultural productivity, poor governance and investment climates, and an inefficient public sector. The IDA financed program has been quite responsive in trying to address some of the major development challenges, especially in the re-establishment of social services. During 2008-2012, key results included access to basic health services to about 15 million people, and attacking malaria through mass distribution of bed nets (more than 1 million households have received long lasting insecticide bed nets). Community dynamics were restored with more than 900 community driven-projects, completion of 354 schools, 73 health clinics, 43 markets and 70 water projects.


Challenge

The Democratic Republic of Congo is a low-income country that has massive potential (one of the richest countries in the world with natural resources, including mining, forestry, and hydropower potential, etc.), but has not been able to translate this into broad-based growth to address high poverty (70 percent in 2011). Its economy is driven by natural resources and is vulnerable to food and financial shocks. The recent elections and weak management and effectiveness of government resource have made the country more vulnerable to shocks and prone to crises. Besides, effective coordination remains difficult in a country that has nearly every United Nations (UN) agency, hundreds of nongovernmental organizations (NGOs), and many large donors. The challenge is to strengthen the credibility and functioning of the state while improving social conditions, supporting broad-based growth and creating the conditions for the private sector to develop.

 

Approach

Due to the DRC’s low-income country status, high poverty rate (70 percent in 2011) and its daunting challenges regarding stability and economic prospects, the country has enormous needs and an important demand for International Development Association (IDA) services. After its re-engagement in the DRC in the early 2000’s, the World Bank conducted a series of emergency operations to support the post-conflict rehabilitation and provide basic services to the population. From then, IDA shifted gradually towards a sectoral approach, narrowing interventions into a few sectors, in line with the Kinshasa Agenda, which calls for enhanced coordination among donors. The overall objective of the Bank’s Country Assistance Strategy (CAS) is to strengthen the credibility and functioning of the state while improving social conditions, supporting broad-based growth and creating the conditions for the private sector to develop. The Bank is using a mix of lending, non-lending and trust funds activities in the DRC.

 

Results

During 2008-2012, IDA assistance made a significant contribution to:

(i) The peace consolidation process through the demobilization of more than 107,000 adults and 34,000 child soldiers, and reintegration of about 89,000 ex-combatants into economic activity thanks to the Emergency Demobilization and Reintegration Program;

(ii) The decrease in the cost and time for transportation: travel time on the 137 kilometers road section from Lubumbashi to Kasomeno in Katanga was reduced from seven days to two hours thanks to the Emergency Economic and Social Reunification Project and prices of main goods were reduced by 60 percent in areas located between Kisangani and Beni;

(iii) The increase in the DRC’s awareness and positioning on global issues related to forest preservation and climate change.

Improved business climate

IDA support for an improved business climate through the ongoing Private Sector Development and Competitiveness Project, together with the International Finance Corporation (IFC), the German government-owned development bank (KfW) and the European Union (EU) led to : (i) reducing the time for creating a business (down by 51 percent over the CAS period of fiscal years (FY) 2008-2012); (ii) reducing the time for securing property registry and construction permits (down by 54 percent); (iii) instituting a one-stop-shop for customs administration; (iv) reducing the number of taxes (from 118 to 30); (v) preparing the DRC for adhesion to the harmonized regional business laws commonly known as OHADA (which is awaiting presidential accession); and (vi) facilitating the DRC’s participation in the African Trade Insurance Agency (with the DRC currently constituting ATI’s largest portfolio). 

Improved governance and public sector capacity building

IDA is financing two governance operations and its support has led to tangible results and real progress in some of the sectors critical to economic growth and poverty reduction, including in governance with the following results: (i) Medium-Term Expenditure Frameworks were prepared for some ministries and provinces, and public financial management (PFM) and human resource management systems were strengthened in four provinces (Katanga, South Kivu, Bandundu, and Kasai Occidental); (ii) central government budget execution data is regularly published; (iii) a new procurement code was put in place and the implementing institutions set up; (iv) legal review of 156 logging contracts by an inter-ministerial commission, which was successfully completed in early 2009 and as a result, only 80 concessions met the criteria and all of the other concessions were cancelled; and (v) 47 responsibility contracts have been signed between concessionaires and local communities.

Improved human development indicators

Human development has focused primarily on service delivery, which has led to significant increases in access to health and education services, as well as social protection in project areas:

(i)  In health, IDA support was provided to 83 district health centers (Bandundu, Equateur, Kinshasa, Katanga and Maniema) out 515 in the country with the following results: increased immunization in project areas with a 20 percentage point increase in DPT3 coverage, stock-outs have been reduced by 20 percentage points, and deliveries attended by trained staff have increased by 33 percentage points from 47 to 80 percent. These improvements were made possible in part through the construction, rehabilitation or equipping of 475 health facilities and the training of 8,556 health workers. More than 1 million households have received long lasting insecticide bed nets and 65 percent of children are now sleeping under bed nets compared to 32 percent at the beginning of the project.

(ii) In education, through the Emergency Urban and Social Rehabilitation Project, payments of recurrent costs (non-salary expenditures) were made for 26,141 schools in the country, thus reducing or eliminating parental contributions. Roughly, 13.5 million children have benefitted from this activity. Under the Education Project, 14 million textbooks were provided, payment of salaries of 72 percent of teachers in “registered” schools became automatic, and primary, secondary, and higher education sector strategies have been prepared. Completion rates have increased from 54 percent in 2008 to 56.7 percent in 2010 and enrollment rates have stagnated at 91 percent. Girls-boys parity has reached 86 percent compared to 80 percent in 2008 and more than 145,000 teachers out of 210,000 have benefited from teaching guides to improve their capacity to teach. In higher education, support was also provided to evaluate the quality of higher education institutions, leading to the closure of a substantial number of institutions that were deemed to be non-performing.

(iii) In social development, the Social Action Project, which aims to improve access of poor communities to social and economic activities and improve the availability of resources at the community level, has completed 354 schools, 73 health centers, 43 markets and 70 water projects. School enrollment increased by 34 percent compared to the anticipated 35 percent, access to medical consultations in facilities rehabilitated or built increased by 92 percent instead of 50 percent. Nearly 221,000 people have access to improved water services and satisfaction with project development and satisfaction among project beneficiaries was high at 70 percent. Ninety percent of the village committees in charge of the management of the sub-projects are still operational. The project covers all the provinces and more sub-projects are under implementation.

 

Bank Contribution

The IDA15 allocation to the DRC (including the post-conflict allocation) was SDR 721.8 (equivalent to about US$1.097 billion), mostly allocated to lending operations (US$416 million in FY09, US$610 million in FY10 and US$410 million in FY11).

In addition, the Bank supported key studies during the IDA15 period aimed at deepening knowledge of the country, as well as helping government to formulate sector policies and reforms. These studies included (i) an highly praised spatial analysis of the infrastructure landscape, which provided a prioritization framework for infrastructure investments, and highlighted the scope of the investment needs (approximately US$5 billion per year); (ii) a Diagnostic Trade Integration Study (DTIS) underscoring a major need for cross-border trade coupled with adequate policy reforms; (iii) a Health Systems and Financing study; (iv) a youth study which put forward a number of areas requiring policy attention; (v) an investment climate analysis; (v) a commended Country Economic Memorandum (CEM), which is the first one since the resumption of Bank support to the DRC in 2001; and (vi) a series of multi-donor funded analytical work on decentralization, which has helped the Bank enhance its dialogue with the Congolese authorities on this issue.

The Bank’s current portfolio in the DRC consists of 15 projects with a commitment of US$1.88 billion, of which US$903.2 million is disbursed (as of end-December 2011). In addition, the portfolio includes two regional projects totaling US$938 million, of which US$769 million is undisbursed. About 64 percent of the portfolio is in infrastructure (water, energy and roads), 18 percent in human development, 11 percent in agriculture and private sector development, and 7 percent in governance and mining.

 

Partners

The Bank has leveraged the use of IDA15 in the DRC by strengthening its donor coordination efforts. At present, Official Development Assistance (ODA) to the DRC finances 50 percent of government spending, which has represented around US$2.0 billion of ODA in 2010. IDA’s engagement with other development partners has been strengthened substantially since the elaboration of the 2007-2010 multi-donors’ Country Assistance Framework (CAF) in 2007, from which the Bank’s CAS (FY08-11) was derived. In June 2009, the Bank helped organize the Aid Effectiveness Forum, which resulted in a coordination framework called the Kinshasa Agenda and a number of thematic groups, three of which (governance, industry and mining) are co-led by the Bank.

In line with the Kinshasa Agenda, which calls for better division of labor among donors and use of harmonized implementation mechanisms (in the absence of use of national systems), donors are revising their country assistance to refocus their programs. The Bank is focusing its efforts in improving governance, access to social services and supporting growth-related activities, by investing heavily in infrastructure (energy, roads). The Bank is also pursuing strategic partnerships with other donors in its areas of comparative advantage and concentration (for instance the partnership with the UK Department for International Development (DFID) on roads and extractive industries through the ongoing Growth with Governance in the Mineral Sector Project (PROMINES) or energy with the African Development Bank (AfDB), while seeking complementarities with security/diplomatic and relief actors. The Bank has taken the lead in developing joint mechanisms for project implementation to help reduce the cost of doing business and avoid overtaxing already weak government capacity. An illustrative case is the joint implementation unit for energy sector programs funded by the Bank, AfDB, and the European Investment Bank (EIB).

 

Toward the Future

Future interventions could build around partnerships with other donors, governance and the strengthening of national capacity in delivering IDA support. Areas of intervention will be limited to ensure greater impact and will consider the Bank’s comparative advantage in sectors important to unlocking growth while maximizing employment creation. Infrastructure and infrastructure services, reform of the business climate to unleash private sector potential and the development of agriculture are excellent candidates for IDA support, in addition to reinforcing supply and demand sides of good governance. Attention to the current portfolio will be a priority and quality of new operations will require the utmost attention of the team. The intention of reducing the number of lending operations will lead the Bank’s approach in accordance with the importance of exercising greater selectivity, while focusing on partnerships to address burden sharing. Further, the Bank will work closely with the provincial administrations in the implementation of its programs, gradually designing province-level programs, comparable to the agriculture operation, which has focused primarily on the Equateur Province.

 

Beneficiaries

Not long ago, the Shaba primary school in the suburbs of Lubumbashi, the capital of the Province of Katanga (southeast DR Congo), was regarded as nothing more than a school for destitute children. Without a door or benches, this school, with barely 30 students, was operating out of an old colonial-era store. Placide Yombo, the school’s principal, said “Only children from impoverished families were registered at our school, and whenever it rained, everyone stayed home.” The picture changed after the school got a facelift in early 2010 thanks to the Emergency Social Action Project (PASU), which financed 34 projects at a cost of US$2.8 million in Katanga. The renovated school building now boasts six new classrooms equipped with benches and well-mounted chalkboards, much to the delight of the principal, who now works in a brand new office. “These new buildings have allowed us to gain the confidence of the parents and our numbers have increased,” Yombo said. Enrollment at the school has skyrocketed from 30 to 250 students. The reasons for this influx are evident: in addition to the new classrooms and administrative offices, the school is also equipped with clean restrooms.

M. Kialeka Mulopo Jean-Baptiste, director of the primary school Makelele, located in Bandalungwa, a modest neighborhood of Kinshasa, shares his joy after his school was rehabilitated by the IDA-funded Educator Sector Project: “I am very happy with this work. It allowed us to increase the number of our students. Today, students sit on benches and not on the floor. Before the intervention of the World Bank, the school was completely dilapidated because it had not been rehabilitated since its inception in 1955. It was only in 2008 that we saw improvement when the World Bank rehabilitated our school as part of the Education project. As a father and as a principal, I am so grateful for this new opportunity offered to my students, which unfortunately other schools have not had yet. Only one year after taking office, my school was selected by the World Bank to be rehabilitated. What an honor and a joy!”


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