Economic Recovery Credit

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This Economic Recovery Credit Project aims at helping Congo deepen its reform program, as it benefits from an early access to the Heavily Indebted Poor Countries (HIPC) Initiative. In particular, the project will help the country: a) enhance transparency in the oil sector, through the implementation of the action plan, devised after the audit of the accounts of the oil company; b) rationalize public investment, to ensure fiscal discipline, and accountability, and make it more consistent with the pro-poor, and pro-sustainable development goals of the Interim Poverty Reduction Strategy Paper (I-PRSP); and, c) reduce domestic arrears in an orderly, and transparent manner. Although risks are significant, these must be balanced with the risks of inaction, which are considerable. Risks stemming from Congo's post-conflict context are being mitigated under a number of International Development Association (IDA) credits. Also, the project would increase the chances of access to the Poverty Reduction and Growth Facility (PRGF) and HIPC, allowing further consolidation of peace. The risk of weak implementation capacity is mitigated by the relatively simple design of the operation, and will be further mitigated by the appointment of a monitoring, and follow-up team in the Ministry of Finance, intensive project supervision, and technical assistance under other IDA credits.