Republic of Congo Second Fiscal Management and Inclusive Growth DPF

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The operation supports the government’s reform efforts to strengthen fiscal performance and diversify the economy by improving the conditions for inclusive and sustainable growth. The first pillar of the proposed DPF supports reforms to strengthen revenue mobilization from both the oil and non-oil sectors and PFM. The second pillar consists of reforms to support the country’s economic diversification and inclusion agendas through strengthened competition, improved business environment, human capital accumulation, protection of the most vulnerable populations, and improved access to electricity. This DPF is complementary to World Bank-financed investment and Program-for-Results operations and builds on the World Bank’s core analytics, notably the recent Country Economic Memorandum, Public Finance Review, and Public Expenditure and Financial Accountability assessment. The operation also supports adjustments to climate change through key adaptation actions. Congo is the 166th most vulnerable country to climate change out of 182 countries on the Notre Dame GAIN Country Index.10 Mean temperatures have increased, and precipitation has been more erratic. The impact of climate change is already observable in the form of more frequent floods and higher incidence of heat-related and vector-borne illnesses, with the country’s main agricultural zone severely affected, causing harm to the poor who rely heavily on agriculture as their primary income source. Given these impacts, adjusting to the realities of climate change will require key adaptation actions with a focus on strengthening the social safety net and building resilience in agriculture, labor productivity, coastal areas, and health. Several actions in this DPF will help Congo adapt to climate change including by improving the social protection system (including for those affected by climate change and who rely on forests for their livelihoods), improving service delivery including for health and education, and incorporating sustainable development objectives into the public procurement process.