Republic of Congo: Poverty Assessment

The Assessment was completed before the civil conflict that began in June 1997.

In the early 1980s the Congo was flush with oil revenues and received substantial external assistance. The formal economy was run largely by the state, and as a result, public spending and relatively high wages in the public sector attracted migration to Brazzaville and Pointe Noire. The rural exodus was also linked to difficulties in marketing and to the decline of coffee, cocoa, and sugar. Despite the weak agriculture sector, GNP per-capita was US$890 in 1980; by 1985 it exceeded US$1,000, double the average level for sub-Saharan Africa.

Poverty Profile

Yet poverty was widespread in the early 1980s, especially in terms of survival prospects.Infant mortality, for instance, stood at 87 per thousand in 1980 and life expectancy at birth was 51, around the relatively low sub-Saharan average. Several reports from hospitals put maternal mortality at a relatively high 650 to 900 per 100,000 live births. Access to safe water was only 42 percent in urban areas and 7 percent in rural areas in the mid-1980s.

Since 1980, poverty appears to have worsened as real GDP per-capita declined from $US900 in 1980 to an estimated $US540 in 1995. The available nutrition indicators tend to confirm the hypothesis of deterioration, which was worse among rural children and mothers. Real private consumption per-capita rose by only 14 percent over 1980-95 and declined by 19 percent over 1985-95. The decline in consumption in the 1990s is thus part of a longer-term trend. Surveys of household expenditures conducted in Brazzaville indicate that inflation-adjusted expenditures per person contracted by a striking 40 percent over 1993-95, so that consumption is in depression. The household surveys of expenditure were conducted among approximately 300 households in Brazzaville as part of surveys of child nutrition. The results apply to Brazzaville and not to the Congo as a whole and are approximate because of the modest sample size.

Incentive and Regulatory Framework

Poverty worsened mainly because of multiple shocks and policy errors that harmed public welfare by reducing the resources available for imports and for the government budget. The decline in the price of oil in the mid-1980s sharply reduced the availability of resources. Agricultural exports lost competitiveness because of an appreciation of the exchange rate of the domestic currency (the CFAF) against the US dollar, and at the same time, the dollar price of the export commodities in world markets declined, further reducing resources. Moreover, these developments did lasting damage by discouraging investment in agriculture. The devaluation of the CFAF in January, 1994 created potential for renewed growth of production by raising the CFAF export price of agricultural goods and lowering the US$ price to more internationally competitive levels. But the potential was not realized because the poor condition of the plantations and roads, and also export taxes, prevented farmers from receiving the full benefit of the higher CFAF export prices.

These shocks were compounded by several policy measures, and in particular the increase in public employment. Between 1985 and 1992 about 25,000 persons were hired into the public sector, a further complication was the 20 percent increase in civil service wages in 1991. The Government then effectively funded the wage bill and service of earlier debt by borrowing against future oil revenues, and at relatively high commercial rates. These measures durably increased government obligations that are not development-oriented at a time when external shocks had reduced revenues and a civil conflict had increased needs.

To these essentially economic shocks was added the tragedy of civil violence. A dispute over the outcome of the first round of parliamentary elections in June, 1993 triggered fighting between private and politically-oriented militias. The fighting and the resulting fear spurred large population movements along ethnic lines. The main short-term economic cost was the temporary cutting of the train route between Brazzaville and Pointe Noire on the sea, which set the price of food imports soaring in the months ahead of the devaluation. The major long-term costs were the widespread destruction of housing, with approximately 10,000 damaged and destroyed in Brazzaville and its suburbs and the appearance of displaced people living in extreme conditions.

Public Expenditures

Each chapter of the Assessment sets forth examples where the government faced a choice between making actual expenditures of its limited resources for a development purpose or for an alternative use. In the case of education, the planned recurrent non-salary budget for schools was reduced severely, and reduced much more than university scholarships that benefit youth from upper-income groups. Health expenditures were directed toward payment of salaries in Brazzaville and the University Hospital rather than toward health districts that would provide primary care in the regions. Persons displaced by the civil conflict of 1993 received almost no assistance in reintegration and reconstruction. In the key transport sector, the government launched an investment program, but did not begin reconstruction of the key axes that connect Brazzaville to the sea and to the main food-producing regions. Reversal of this pattern, through redirection of public resources to development priorities, is a prerequisite to the reduction of poverty and the improvement of food security.

The level and allocation resources meant that the government could no longer fund its basic operations. For example, it has owed as much as 14 months in wage arrears to civil servants and owes arrears to suppliers. Therefore, the government can no longer find sufficient funds to maintain public infrastructure, or to adequately operate the school and public health systems, let alone to invest in new infrastructure. When funds do become available, civil service wages appear to have first claim. This is one reason why the budget often does not guide expenditures. Detailed studies of the health budget, for instance, have shown that actual expenditures often run below budgeted amounts.

The most visible consequence of the shortage of funds is the deterioration of the public infrastructure that was built in the age of abundant oil revenue. The drainage and sewage system is partly broken and does not cover large parts Brazzaville and Pointe Noire, and there is no garbage collection. Standing water and seepage have obvious consequences for malaria and diarrhea. Moreover, the lack of resources has also handicapped the public provision of health care. Lack of maintenance has left medical equipment and structures in disrepair and medicines are not always available. There have been parallel consequences for education: the schools are in disrepair from lack of maintenance, and several schools were damaged during the civil conflict or are occupied by refugees and other homeless persons.

The poor condition of most of the main urban-rural routes has also led to a break-down in internal trade in food. Brazzaville is about 520 km inland and is connected to Pointe Noire on the sea by a road and a rail line. At present, the road is impassable much of the year and the train is interrupted frequently by derailment caused by lack of maintenance. This has increased poverty and worsened food security as the rural poor often cannot produce for sale to the cities or for export, and the prices of basic food products in Brazzaville are sometimes 2 to more than 3 times more expensive than in rural areas.

Safety Net

The only safety net that functions is informal and works through private family and community solidarity. A small number of NGOs provide some limited support to the poorest. There is a security system for the civil service and a pension system for public sector employees, but these are not making payments and would need to be restructured.

Poverty Strategy

Once damage from the present conflict is repaired, a rapid recovery could be possible through the restoration of basic social services and rehabilitation of transport infrastructure. However, scarce public resources have often been directed to non-development uses. A prerequisite for poverty reduction is a reversal of this pattern, through measures to increase public resources and the redirection of public resources to development priorities. Another prerequisite is technical improvement of budgetary processes, through assistance to improve capacity, so that development expenditures are made as planned.

To enhance the volume of resources available for development purposes, the government would need to continue restructuring the public sector through measures that reduce the size of the civil service, work-down external debt, enhance revenue collection, and privatize public enterprises. Freed resources could then be devoted to deficit reduction, to the restoration of basic health and education services, and to investments in road transport and sanitation. This restructuring would form part of a larger effort to reduce poverty by promoting growth that would extend beyond petroleum to food staples, forestry, and export crops.

To improve growth and also food security, internal trade in food staples could be intensified through the reduction of transport costs. The priority effort would be to open the road between Brazzaville and Pointe Noire, to rehabilitate several roads into the countryside, and to ensure maintenance through contracts with private companies. Agricultural productivity would rise, and unit costs would fall, as farmers realized economies of scale in production and as they benefited from easier access to fuel, fertilizer, tools, and extension. This would improve the purchasing power of the urban poor by reducing the price of imports and of food produced by domestic farmers, thus improving food security. Roads are a win-win investment because the opening of the large urban market would also strengthen farmers' revenue. Rehabilitation of the main road axes and private investment to rehabilitate the railroad would also help open the export market. The lower transport costs would benefit exports of tropical wood and would promote investment in traditional export crops such as sugar, cocoa, and coffee.

The rehabilitation of the main Brazzaville-Pointe Noire road is necessary for improvement in other areas. It is difficult to pay arrears and separation payments to public sector employees without raising the price of goods in Brazzaville, yet this could be avoided if goods could be brought in by road and therefore at lower cost. In addition, it would not be possible to launch any large-scale reconstruction of civil-conflict-damaged quartiers without raising the price of construction materials, again because of the condition of the road and rail routes to the sea.

Renewed growth of agriculture could be sustained through human welfare and labor productivity enhancing investments in health and education. An effort to improve public health through investments in sewerage and water supply would reduce malaria, diarrhea and other diseases. Public health would benefit from these investments and from action to establish, fund, and operate health districts that would provide preventive and primary care. Some high priority uses of scarce health funds would be for AIDS prevention, for primary health services in rural enclaves, for persons displaced by the civil conflict, and for street children. The focus could then shift to adequate funding, at a minimum, of the operation and rehabilitation of primary education to assure the development of the more productive labor force needed for eventual advancement into new industries that return higher real incomes.

Statistical System

The Congo would need to develop nation-wide surveys that are updated regularly to monitor the reduction of poverty to develop and adapt policies to reduce poverty effectively. A nation-wide survey of household expenditures would identify the extent and geographic distribution of poverty and identify concentrations of poverty and thus allow the development of policies targeted to alleviate concentrations of poverty. The survey should be designed to identify potential concentrations of poverty by region, in rural enclaves, and among groups such as women heads of household with small children, street children and orphans, the handicapped, and displaced persons. The survey could then be update every year or two by rapid, smaller sample, and low-cost surveys. These surveys should also include information on education, health, and nutrition. To assure food security, it would be useful to complete the demographic and health survey that is in progress, which contains a nutrition component, and to conduct occasional follow-up surveys.