Oil revenues in the 1970s helped expand public sector employment. The collapse in oil prices in the mid-1980s dramatically decreased government revenues, which led to a surge in international borrowing. In 1985, Congo entered negotiation with the IMF for standby credits to satisfy domestic and foreign creditors. In 1986, Congo reluctantly joined with the IMF in a structural adjustment program for which the country received $40 million in funds and was able to reschedule its international payments. By 1988, the Congo's external debt had risen to an unsustainable $4.1 billion. In 1989, a second structural adjustment program was agreed to.
In the late 1980s and early 1990s, weak oil prices and a massive public sector combined to drive up Congo's debt. Civil service salaries absorbed over half of the government's 1995 budget. The budget deficit rose form 5.5% of GDP in 1985 to 14% in 1991 and was estimated at 25% in 1998. In 1995, total external debt was approximately $5 billion with service on the debt amounting to 155% of revenues annually, one of the highest ratios in the world. Although the Paris Club agreed to reduce Congo's debt by 67%, debt reduction payments were still expected to reach $500 million in 1996. In 1995, Congo reached another agreement with the IMF and World Bank that would help alleviate some of its debt burden. This reform program came to a halt when civil war erupted in 1997.
The US Central Intelligence Agency (CIA) estimates that in 1997 Congo's central government took in revenues of approximately $870 million and had expenditures of $970 million. Overall, the government registered a deficit of approximately $100 million. External debt totaled $5 billion.
The following table shows an itemized breakdown of government revenues. The percentages were calculated from data reported by the International Monetary Fund. The dollar amounts (millions) are based on the CIA estimates provided above.
|REVENUE AND GRANTS||100.0%||870|