Business Monitor International


Democratic Republic of Congo Business Forecast Report

Published 16 December 2014

  • 29 pages
  • Instant access to your report online and PDF format through your account library
  • Includes 3 free updated quarterly reports
 
$1,195.00
Democratic Republic of Congo Business Forecast Report
  • The UN intervention force has engaged in direct clashes with the M23 rebels in North Kivu, and this marks a significant shift in the world body's political strategy in the DRC. Several shells have landed in Rwanda, raising the risk that Kigali may become more openly involved in the conflict. Despite attempts to restart negotiations, BMI predicts that the situation will escalate, but remain geographically contained.

  • BMI predicts that real GDP growth will slow from 7.9% in 2013 to 6.0% in 2014 as a result of falling commodity prices, a weak business environment, and slowing mining growth. We expect that economic growth will remain between 5.5% and 6.5% over the duration of our 2014-2017 forecast period.

  • We have adjusted our budget forecasts, and now expect the DRC's fiscal shortfall to reach 6.3% of GDP in 2014 compared to 5.4% previously . This is based on our prediction that revenue growth will slow, and that the current budget process is making overly optimistic assumptions about economic growth.

  • The DRC's current account deficit is widening due to lower commodity prices and faltering production in key sectors. We predict that the country's current account shortfall will widen from 13.5% in 2013 to 14.1% in 2014. Slower copper production growth and lower price for the metal will depress exports, while import demand remains strong.

Table of Contents

Executive Summary
5
Core Views
5
Key Risks To Outlook
5
Chapter 1: Political Outlook
7
SWOT Analysis
7
BMI Political Risk Index
7
Domestic Politics
8
Compaor-'s Ouster Will Delay DRC Constitution Change
8
Burkina Faso's popular revolution will force Congolese President Joseph Kabila to delay his efforts to extend his own time in office
It is
still likely that the Congolese leader will remain in power after 2016, potentially by calling for a long overdue census
TABLE: Political Overview
8
Long-Term Political Outlook
9
Structural Weaknesses Will Prolong Instability
9
There is little chance that the Democratic Republic of the Congo (DRC) will succeed in overcoming the many structural weaknesses that
There is little chance that the Democratic Republic of the Congo (DRC) will succeed in overcoming the many structural weaknesses that
have made it one of Sub-Saharan Africa's least stable countries
While the consolidation of power by the central government remains
possible, our core scenario is that Kinshasa's authority over provincial governments will remain limited and that perceived corruption,
possible, our core scenario is that Kinshasa's authority over provincial governments will remain limited and that perceived corruption,
violence and poor institutions will continue to characterise the DRC at the local level
A return to the civil war and anarchy of the 1990s
is unlikely but remains a risk
Chapter 2: Economic Outlook
13
SWOT Analysis
13
BMI Economic Risk Index
13
Economic Activity
14
Trend Growth Moderating
14
Real GDP growth in the Democratic Republic of the Congo will decelerate from 8
9% 2015, with expansion averaging
7
TABLE: GDP By Expenditure
14
GDP Rebased, Economic Structure Unchanged
16
Updated GDP figures for the DRC have not led us to significantly adjust our growth forecasts for the country, which is one of the world's
Updated GDP figures for the DRC have not led us to significantly adjust our growth forecasts for the country, which is one of the world's
poorest
Benguela Railway Will Boost Copper Industry, Eventually
17
The Democratic Republic of the Congo's transport network is dangerously reliant on a few key trade routes, most of which are in poor
The Democratic Republic of the Congo's transport network is dangerously reliant on a few key trade routes, most of which are in poor
condition and vulnerable to sudden disruptions
The completion of a railway linking copper-rich Katanga with the Angolan port of Lobito
will improve the situation
Fiscal Policy
19
Budget Goals Unlikely To Be Realised
19
The DRC's reformist prime minister will not be able to deliver on the ambitious spending plans he recently presented to parliament
Weak revenue collection and administrative failures will keep government spending far below the USD8
3bn that he is targeting for
2015
TABLE: Fiscal Policy
20
Chapter 3: BMI Global Assumptions
21
Global Outlook
21
Warning Signs Growing
21
Table: Global Assumptions
21
Table: Developed States, Real GDP Growth, %
22
Table: BMI VERSUS BLOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, %
22
Table : Emerging Markets , Real GDP Growt h, %
23

The Democratic Republic of Congo Business Forecast Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in The Democratic Republic of Congo and is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market..

An influential new analysis of The Democratic Republic of Congo's economic, political and financial prospects through end-2017, just published by award-winning forecasters, Business Monitor International (BMI).

Key Uses

  • Forecast the pace and stability of The Democratic Republic of Congo's economic and industry growth through end-2017.
  • Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
  • Assess the critical shortcomings of the business environment that pose hidden barriers and costs to corporate profitability.
  • Contextualise The Democratic Republic of Congo's country risks against regional peers using BMI's country comparative Risk Ratings system.
  • Evaluate external threats to doing business in The Democratic Republic of Congo, including currency volatility, the commodity price boom and protectionist policies.

The Democratic Republic of Congo Business Forecast Report by Business Monitor International (BMI) includes two major sections: Economic Outlook and Political Outlook.

Economic Outlook:

How will the Congolese economic policy-making and performance impact on corporate profitability over 2013-2017?

BMI provides our fully independent 5-year forecasts for The Democratic Republic of Congo through end-2017 for more than 50 economic and key industry indicators. We evaluate growth, and also forecast the impact of economic management.

Economic Outlook Contents

The Democratic Republic of Congo Business Forecast Report features BMI's forecasts with supporting analysis for 2013 through to end-2017, set against government views and BMI's evaluation of global and regional prospects.

Key Areas Covered:

Data:

  • Full 10-year forecasts with data - for key macroeconomic variables including GDP (real growth and per capita), population, inflation, current account balance and the exchange rate.
  • BMI's comprehensive Risk Ratings system - rates each country worldwide for economic and political risk, and rates the business environment, within a global and regional context.

Written Analysis:

  • Economic Activity - real GDP growth, employment, inflation, consumption (retail sales and confidence).
  • Balance of Payments - trade and investment, current and capital account.
  • Monetary Policy - interest rate trends (bank lending and deposit rates) and inflation (producer price and consumer price).
  • Exchange Rate Policy - currency controls, foreign investment flows, exchange rates and foreign exchange reserves.
  • Fiscal Policy - macroeconomic strategy and policies, government finance and tax reforms.
  • Foreign Direct Investment - approvals, inflows and climate.
  • External Debt - debt profile (short and long-term plus public and private sector exposure).
  • Global Assumptions - forecasts for each year to end-2017 covering: major commodities, growth in key regions, inflation, and interest and exchange rates, in the United States, Japan, China and the eurozone.

Key Benefits

  • Rely upon BMI's 100% independent forecast scenarios for The Democratic Republic of Congo and underlying assumptions - we take no advertising and are privately-owned.
  • Exploit the benefits of BMI's comprehensive and reliable macroeconomic database on The Democratic Republic of Congo, sourced and fully maintained by BMI from an extensive network of private sector, government and multilateral contacts.
  • Gain key insights into the current and future direction of government economic policy, which could significantly affect your company's business prospects, from BMI's team of analysts and economists.

Political Outlook:

What are the political risks to doing business in The Democratic Republic of Congo over the next 5-years?

BMI's The Democratic Republic of Congo country Risk Ratings evaluate the short- and medium-term threats to political stability.

Political Outlook Contents

  • SWOT Analysis for the Congolese Market - Political Strengths, Weaknesses, Opportunities and Threats facing The Democratic Republic of Congo.
  • Political Stability and Risk Assessment - BMI's Risk Ratings assess explicit short- and long-term risks to political stability; latest ratings, rankings and trends for The Democratic Republic of Congo's risk are compared with regional and global averages.
  • Current Administration and Policy-making BMI assesses the threats to the continuity of economic policy, and likely changes to the business operating environment.

Key Benefits

  • Benchmark The Democratic Republic of Congo's risk profile against its neighbours, the global and regional average, allowing easy comparison of risks between key business markets.
  • Identify, evaluate and anticipate political and security risks to the business environment, and to your company's current operations and future plans.
  • Gain valuable insights into government and policy-making, through BMI's specialist team of analysts and economists, and their network of private and public sector sources.

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Testimonials

The sections that I find most interesting and useful are the macroeconomic data and forecasts for the country, top export destinations and economic activity. The indicators/analysis of these areas helps us orient our thinking, our assumptions and, consequently, our decisions in the commercial area.

Country Manager, DHL Express