The IMF is requesting the DRC to consolidate its government accounts into a Treasury Single Account (TSA) to enhance transparency and manage public resources more effectively. As part of a new $2.87 billion financing deal, the DRC must also implement various tax reforms to improve domestic revenue. These steps are essential for securing the funds needed to address pressing economic issues in the country.
The International Monetary Fund (IMF) is advocating for the Democratic Republic of Congo (DRC) to establish a Treasury Single Account (TSA) as part of a new financing agreement amounting to $2.87 billion over three years. This measure aims to consolidate the current fragmentation of over 3,600 government accounts, thereby enhancing transparency and improving the country’s fiscal management. Kinshasa has been lagging in implementing the TSA, a requirement set forth since 2019, affecting the management of public resources significantly. Under the provisions of the recent agreement, the DRC is slated to receive $1.77 billion from the IMF’s Extended Credit Facility (ECF) alongside a unique allocation of $1.1 billion from its Resilience and Sustainability Facility (RSF), which focuses on climate concerns. To secure these funds, the Congolese government must hasten the implementation of the TSA and fulfill necessary tax reforms to enhance domestic revenue generation, as emphasized by the IMF. Calixte Ahokpossi, the IMF mission chief for the DRC, stated, “A key priority under the planned ECF-supported programme is to ensure stricter adherence to the public expenditure chain procedures.” In line with this, the IMF’s guidance calls for the operationalization of the Treasury General Directorate (DGTCP) and the TSA, as well as the gradual decentralization of expenditure authorization to line ministries.
The calls for a Treasury Single Account (TSA) are framed within a broader context of economic reform aimed at fostering better governance in the DRC. The current array of 3,625 government accounts complicates cash management and transparency, leading to inefficiencies and potential misuse of public funds. This situation has prompted the IMF to condition future financial support on the establishment of a TSA, among other reforms aimed at improving fiscal discipline and economic stability within the DRC. Tax reform is an equally critical component of the IMF’s strategy, as it seeks to enhance the Congolese government’s ability to generate domestic revenue through more effective tax policies and administration. Historical reference points include similar impositions on other African nations, demonstrating the IMF’s commitment to enforcing stringent fiscal measures across the continent, despite potential public resistance.
In conclusion, the IMF’s push for a consolidated Treasury Single Account and comprehensive tax reforms in the Democratic Republic of Congo is pivotal for enhancing fiscal transparency and governance. The anticipated $2.87 billion financing agreement underlines the importance of reforming public financial management to facilitate recovery and stability in a country grappling with significant economic challenges. Successful implementation of these reforms hinges on the Congolese government’s commitment to expediting necessary changes in fiscal policy and management practices.
Original Source: www.theeastafrican.co.ke
