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The economy of the Republic of Congo has undergone major
changes since independence in 1960, when the country began
to extract oil. Particularly from the 1980s, this has led to
large revenues, but also considerable uncertainty, due to
the large fluctuations in the price of the world market. At
the same time as the importance of agriculture has been
declining, Congo has thus become heavily dependent on oil
revenues, and thus the price of the international markets.
At the same time as the development of the oil and service
sector, Congo has had a greater degree of urbanization than
most African countries, with lower employment and
agricultural production as a result. Congo has large forest
areas, and timber was the most important export item until
1973; when petroleum took over the position.
According to
COUNTRYAAH, Congo has long been one of the
most economically disadvantaged countries in tropical
Africa, but a civil war in the 1990s caused great havoc,
especially in Brazzaville and on infrastructure, but the war
affected the vital oil sector to a small extent. As a result
of the war, Congo, which normally had a surplus on the trade
balance, has accumulated considerable foreign debt, but has
received special loans and credits from the International
Monetary Fund. Despite the large government revenues, the
fall in oil prices in the 1980s and the late 1990s, as well
as the civil war in the second half of the 1990s,
contributed to major social problems, with about 70 percent
of the population living below the poverty line. In the
1980s, Congo was ranked as a middle-income country.
Since independence, Congo has undergone major political
and ideological changes, which have also influenced economic
development. From strong state participation in economic
activity in the 1960s, increased private sector
participation was encouraged from the late 1970s, which
particularly benefited the oil sector. A major economic
restructuring took place in 1994 as a result of a 50 percent
devaluation of the CFA franc, linked to the French franc.
Privatization of state enterprises was part of this policy,
but the restructuring programs were halted as a result of
the civil war that broke out in 1997.
With Congo's geographical location in Central Africa, and
Brazzaville's former position as the capital of French
Equatorial Africa, the country is also a transport hub with
a lot of transit trade, especially to and from Central
African Republic and Chad. Destruction of infrastructure
during the war also affected this sector. The petroleum
sector normally accounts for well over half of gross
national income (GNI), varying with the price of crude oil.
More than a third of the population is employed in
agriculture, which, however, contributes only slightly to
GNI.
Agriculture
The importance of agriculture to the economy of the
Republic of Congo has decreased significantly as petroleum
exports increased in the 1970s and following the rapid
urbanization of recent years. Nor has a policy been
implemented that has promoted agriculture and food
production. Only 2 per cent of the country's area is
cultivated, and about a quarter of the cultivated area is
occupied by plantations and state farms, where lesser
quantities of coffee, cocoa, peanuts, tobacco, sugar cane
and oil palm are grown.
However, exports of agricultural products are minimal,
and Congo is almost self-sufficient in food. Sugar cane and
tobacco have traditionally been the most important export
products from agriculture; smaller quantities of cocoa,
coffee and palm oil are also exported. In 2003, the
authorities announced a ten-year plan to reduce the
dependence on food imports, in which rebuilding market
opportunities and access to rural inputs, which were
destroyed during the war, are central. Animal husbandry is
limited by the tsetse fly. The most important food crop is
cassava.
About 55 percent of Congo's land area is covered by
forests and still represents significant economic potential,
although inaccessibility and inadequate infrastructure limit
the potential for harvesting - which also helps preserve
forests, which are part of the largest remaining tropical
forest area in Africa., and the world's second largest
rainforest. In 2005, the leaders of ten countries in the
Congo Basin signed an agreement in Brazzaville to protect
this forest area.
For forestry reasons, forestry is concentrated in the
southern part of the country. The sector was the country's
main source of income until the mid-1970s, accounting for
around 60 percent of export revenue; petroleum then took
over the position. One third of the forest consists of
viable deposits of limba, okoumé and sapele, which for the
most part are exported as round timber. Congo is the world's
largest exporter of limba, and the second largest of okumé.
Since 1979, eucalyptus has been planted on several
plantations; eucalyptus is also exported. Exports of timber
increased significantly in the 1990s, but this business was
also severely affected by the civil war.
Fishing is conducted in all major rivers, and offshore
waters - which are cooled by the Benguela Stream - have rich
fishing banks.
Mining, energy
Congo has deposits of several minerals, but recovery is
limited, not least due to poor availability. Mineral exports
accounted for less than 5 per cent of export value until
1970, after which the value of crude oil exports rose
sharply. In the mid-1980s, mineral exports accounted for
about 90 percent of total export revenues, mostly from oil.
Oil was first detected onshore at Pointe-India in 1957, and
extraction there began in 1960. Offshore fields were put
into production in the 1970s, and production was at 340,000
barrels per day in 2018. With estimated reserves of 1, 6
billion barrels (2018), Congo is the fifth largest oil
producer in sub-Saharan Africa. Nkossa is the country's
largest field, with reserves of approximately 500,000
barrels.
Congo also has significant reserves of natural gas;
mainly related to the oil deposits and is estimated at 90.6
billion cubic meters (2018). An important operating company
in particular is the French Elf (later merged with Total and
Fina), through its subsidiary Elf-Congo, together with the
state Société Nationale des Pétroles du Congo (SNPC).
Italian, American and South African interests are also
involved in oil recovery.
In addition, lead, zinc, copper, diamonds and gold are
mined in smaller quantities. Occurrences of bauxite,
phosphate, iron ore, tin, titanium, uranium and manganese
have been detected. An agreement has been signed with
neighboring Gabon on joint utilization of the iron ore
rents, which will require significant investments. Congo
also has large deposits of potash (calcium carbonate).
Congo has a total hydropower potential estimated at
approximately 3900 megawatts (MW). In 2017, only 213 MW of
this was developed, divided into three hydropower plants.
The country's largest hydropower plant, Imobulou, is located
on the Lefini River, centrally located in the country. The
power plant came into operation in 2011 and has an installed
capacity of 120 MW. In addition, the power plants
Moukoukoulou provide 74 MW and Djoué 19 MW. A pre-study is
currently underway with a view to implementing the large
Sounda Gorge project, which will provide a new production
capacity of between 600 and 1200 MW.
Industry
Congo has a small, but relatively well-developed
industry, which, however, was also hit by the civil war in
the 1990s. The main industrial activity is related to the
oil sector, and a Pointe-Noire oil refinery was put into
operation in 1976, with the production of, among other
things, heating oils, kerosene and gasoline. In addition,
the industry is linked to the processing of agricultural
products and the production of consumer goods. A small local
market and reliance on foreign investment are limiting
factors for industrial development.
Most of the industry is located in Brazzaville,
Pointe-Noire, Kayes, Loubomo and Niari Valley. A cement
factory was established in Loutété in 1968, where the
Norwegian-Swedish (later German) Scancem company bought into
the state company Cimcongo in 1987, but discontinued
production during the civil war. After the war, Chinese
interests entered into a joint venture with Congo
authorities with a view to restarting production. In 1999,
Scancem re-entered the Congo and in 2002 modernized the
Pointe-Noire cement terminal.
Foreign Trade
Oil exports, particularly from the beginning of the
1980s, generated substantial profits from foreign trade in
Congo, although revenues have varied in line with world
price fluctuations. The civil war in the second half of the
1990s caused major material damage, and both the costs of
lost income during the war and the rebuilding after it
contributed to considerable foreign debt. Due to its
substantial currency revenues, Congo does not receive much
development assistance.
Apart from oil, which normally accounts for about 90 per
cent of export revenue, considerable quantities of timber
are exported. Furthermore, there is a large transit trade in
smuggled diamonds from neighboring DR Congo (formerly
Zaire). In particular, imports consist of food and inputs
for industry and mining. Main trading partners are France,
China, USA and Italy.
Transport and Communications
The main trunk of the country's transport system is the
Congo-Océan railway between Brazzaville and Pointe-Noire
(515 kilometers), owned by the state. A private siding to
M'Binda is used for transporting manganese from Gabon. The
country's road network is poorly developed - outside the
major cities there are few roads with a fixed tire; much of
the country, especially in the north, is without a road
connection. Road construction in these parts of the country
is costly and conflicts with environmental considerations.
In 2017, Congo had approximately 23,324 kilometers of road,
of which only about 7 per cent with a fixed tire. Poor
infrastructure is a major cause of poor development in large
parts of the country. The Congo River and the navigable
parts of the Oubangi and Sanga tributaries are important
transport routes not only for the Congo, but also for the
Central African Republic.
Domestic aviation is relatively modest; International
airports can be found at Brazzaville (Maya-Maya) and
Pointe-Noire. Pointe-Noire is the country's most important
port city, with deep water ports, and also serves several of
neighboring countries, including Gabon, Chad and the Central
African Republic. The port of Brazzaville has a significant
transit trade with several Central African states.
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