In less than a month the Congolese currency has lost more than 11 % of its value when traded with the United States dollar, a worrying factor currently causing panic among the nation's consumers.
Near the end of April 2020 one could trade a USD for about 1700 Congolese franc(fc), as oppose to the latest exchange rate where the same USD will get you about 1900fc.
The rapid depreciation of the franc is being pushed by the shortage of the American dollar, the country's main trading currency. Economic operators are finding it difficult to get hold of the Greenbacks since export earnings have been disrupted by restrictions imposed by several countries, as a result of the coronavirus pandemic.
Congo's economy is heavily dependant on minerals and metals exports, which contributes significantly to the country's foreign currency earnings. However since the outbreak of the coronavirus demand for Congo's precious commodities (especially from China) has dropped, so to has the price of such commodities.
The shortage of the foreign currency has also seen an increase in the price of consumer goods such as food and pharmaceutical products , most of which are imported.
In the beginning of May 2020 the Central Bank of Congo tried to alleviate the problem by injecting some money from the national reserve, however this has been insufficient.
The World Bank also disbursed a sum of $363 million , under the Rapid Credit Facility law, to help the country deal with the negative economic impact stemming from the virus.
But some of the country's economists have blamed the persistent problem on Congo's history of poor governance and corruption. The Democratic Republic of Congo (DRC) has been unable to establish and implement effective framework to ensure that all export earnings makes it way to the national treasury, and that money is directed towards the development of the country. According to a senior World Bank official, 85% of Congo's natural resources revenue does not make it to the state coffers.
The government had tried to establish some form of control by inacting a mining law which required mining companies to deposit 40% of their export earnings to the central bank account; the money will still belong to the companies, but will be invested in the local economy. However many companies have since ignored this rule , without suffering any penalties.
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