Vas

Economic analysis

Of

Republic of Congo

Contents

Introduction 3

Location 3

Demographics 4

Population 4

Age structure 4

Population growth rate 4

Sex ratio 5

Nationality 5

Religions 5

Economy of Republic of Congo 6

Dependency on petroleum 6

Timber Decline 6

Employment 6

Measures for economic reform 6

War of 1997 7

Post 1997 7

Facts and figures 8

National Account 12

External sector (CFAF billions) 12

Financial transactions by the State (CFAF billions) 13

Economic Problems in Republic of Congo 14

Congo's government statement on its poverty reduction strategy 15

Oil depletion and fiscal policy 18

Fiscal indicators 20

Future of Congo: Will oil last long enough? 20

Annual oil production forecast 21

National oil price forecast 21

Primary balance forecast 21

Conclusion 22

Introduction

Location

Capital

Brazzaville (4o14′S, 15o14′E)

Official languages

French

Recognised regional languages

Kongo/Kituba, Lingala

Area

Total - 342,000 kmІ

Water - 3.3%

GDP

2005 estimate - Total $4.585 billion (154th)

Per capita $1,369 (161st)

Currency

Central African CFA franc (XAF/CFAF)

Demographics

The Republic of the Congo's sparse population is concentrated in the southwestern portion of the country, leaving the vast areas of tropical jungle in the north virtually uninhabited. Thus, Congo is one of the most urbanized countries in Africa, with 85% of its total population living in a few urban areas, namely in Brazzaville, Pointe-Noire, or one of the small cities or villages lining the 332-mile railway which connects the two cities. In rural areas, industrial and commercial activity has declined rapidly in recent years, leaving rural economies dependent on the government for support and subsistence.

Population

Total - 3,702,314

Age structure

0-14 years: 46.4% (male 864,407/female 853,728)

15-64 years: 50.7% (male 930,390/female 945,545)

65 years and over: 2.9% (male 44,430/female 63,814) (2006 est.)

Population growth rate

2.60% (2006 est.)

Sex ratio

At birth: 1.03 male(s)/female

Under 15 years: 1.01 male(s)/female

15-64 years: 0.98 male(s)/female

65 years and over: 0.7 male(s)/female

Total population: 0.99 male(s)/female (2006 est.)

Nationality

Noun: Congolese (singular and plural)

Adjective: Congolese or Congo

Religions

Christian 50%, animist 48%, Muslim 2%

Economy of Republic of Congo

The economy of the Republic of the Congo is a mixture of village agriculture and handicrafts, an industrial sector based largely on petroleum extraction, support services, and a government characterized by budget problems and overstaffing.

Dependency on petroleum

The Congo's growing petroleum sector is by far the country's major revenue earner. In the early 1980s, rapidly rising oil revenues enabled the government to finance large-scale development projects with GDP growth averaging 5% annually, one of the highest rates in Africa. However, the government has mortgaged a substantial portion of its oil earnings, contributing to the government's shortage of revenues. The Congolese oil sector is dominated by the French parastatal oil company Elf Aquitaine, which accounts for 70% of the country's annual oil production. In second position is the Italian oil firm Agip. Chevron, independent CMS Nomeco, and Exxon Mobil are among the American companies active in petroleum exploration or production. Following recent discoveries and oil fields currently under development, Congo's oil production is expected to continue to rise significantly in the next few years.

Timber Decline

The country's abundant rain forests are the source of timber. Forestry, which led Congolese exports before the discovery of oil, continues to generate 10% of export earnings, although high transportation costs, high wages, and low productivity have hurt the forestry industry in recent years.

Employment

Earlier in the decade, Congo's major employer was the state bureaucracy, which had a payroll of 80,000, which