Economy of the Democratic Republic of the Congo

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Sparsely populated in relation to its area, the Democratic Republic of the Congo is home to a vast potential of natural resources and mineral wealth, yet the economy of the DRC has declined drastically since the mid-1980s. At the time of its independence in 1960, DRC was the second most industrialized country in Africa after South Africa, It boasted a thriving mining sector and it's agriculture sector was relatively productive.[2] Agriculture is the mainstay of the economy, accounting for 57.9% of GDP in 1997. Main cash crops include coffee, palm oil, rubber, cotton, sugar, tea, and cocoa. Food crops include cassava, plantains, maize, groundnuts, and rice. In 1996, agriculture employed 66% of the work force. Rich in minerals, the DRC has a difficult history of predatory mineral extraction, which has been at the heart of many struggles within the country for many decades, but particularly in the 1990s. The economy of the third largest country in Africa relies heavily on mining. However, much economic activity occurs in the informal sector and is not reflected in GDP data.[3]

Contents

History

1990s

International Bank for Reconstruction and Development (IBRD) Trust Fund for the Congo. Poor infrastructure, an uncertain legal framework, corruption, and lack of openness in government economic policy and financial operations remain a brake on investment and growth. A number of IMF and World Bank missions have met with the new government to help it develop a coherent economic plan but associated reforms are on hold. Faced with continued currency depreciation, the government resorted to more drastic measures and in January 1999 banned the widespread use of U.S. dollars for all domestic commercial transactions, a position it later adjusted. The government has been unable to provide foreign exchange for economic transactions, while it has resorted to printing money to finance its expenditure. Growth was negative in 2000 because of the difficulty of meeting the conditions of international donors, continued low prices of key exports, and post-coup instability.

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