REGIONAL ECONOMY: Congo (MRB Oct 01 2001): Kinshasa government goes on spending against IMF advice.

The International Monetary Fund is concerned that the Kinshasa government is not implementing its Staff Monitored Programme. In a document dated September 16 and leaked to local press, the IMF noted that contrary to the state's commitment to cut expenditure, the central bank paid money to the presidency and the defence ministry in excess of budget allocations and without finance ministry authorisation. In addition, contrary to the government's commitment to stop distributing it, a special gratuity, allocated to the military in May, was paid again in June, July and August.

Constitutional assembly/ transition parliament members received 100% salary increases and top civil servants 150%, again without the finance minister's prior consent. Altogether, this unauthorised spending amounted to nine billion Congolese francs (about US$25m) for June and July. As a result, total expenditure was double the amount scheduled for the programme. In turn, this triggered an increase in the amount of money in circulation, and August's 14.7% inflation rate was far higher than the projected 1%. Meanwhile purchasing power, which had increased after an inflation slow-down in June and July, has sizably diminished, according to the document.

Clearly, the interim reform programme is off track. In order to reverse the trend, the IMF has urged the government to ...