Congo, Republic of The; - Overview of economy

The Congolese economy depends on agricultural production for personal consumption and the exploitation of natural resources. Because the country provides a key port and other transport facilities for neighboring countries such as Chad, Gabon, and the Central African Republic, commercial activities also play an important role in the economy. In 1997, the Congo's government had US$302 million in revenues and US$468 million in expenditures, with a major share of its revenues derived from oil drilling. In the 1980s rising oil revenues provided the Congolese government with the ability to finance large-scale development projects by borrowing against a large share of its future oil income. But this has resulted in shortages in current government revenues. In the late 1990s, oil prices fell and this further reduced government revenue and the country's economic progress.

Further, the Congo suffered another setback due to a civil war that broke out in 1997.

By the end of the 1990s the Republic of the Congo was in a state of disarray. The country's external debt in 1997 was estimated at a huge US$5 billion. Added to this burden of debt was a highly overvalued CFA franc, which made it difficult to export goods; a 5-month civil war in 1997 that cost thousands of lives, wreaked havoc on the capital city of Brazzaville, and sent hundreds of thousands of refugees into the countryside and out of the country; a volatile oil market; and a bloated bureaucracy that is unable to quickly shift economic policies for the better.