CONGO, REPUBLIC OF THE

COUNTRY OVERVIEW

LOCATION AND SIZE.

The Republic of the Congo (ROC) is located in Western Africa and has an area of 342,000 square kilometers (132,000 square miles). It has a modest coastline of 169 kilometers (105 miles) along the Atlantic Ocean in the southwest and shares land borders with Gabon, Cameroon, and the Central African Republic on the west and north. The country is sometimes referred to casually as simply Congo or the Congo, or even Congo Brazzaville, to designate that it is the Congo with Brazzaville as its capital, distinguishing it from the Democratic Republic of the Congo (or Congo Kinshasa), which has its capital at Kinshasa. The Democratic Republic of the Congo lies along Congo's eastern border, with Angola's Cabinda Province sharing a small section of the southeastern border. The Congo is slightly smaller than Montana. The capital city of Brazzaville is located in the southeast of the country, directly across the Congo River from Kinshasa.

POPULATION.

Congo's population was 2,830,961 and growing at an annual rate of 2.23 percent annually in 2000. The birth rate and the death rate in 2000 were estimated at 38.61 and 16.35 per 1,000 population, respectively. Life expectancy in Congo is only about 47 years of age, with women living to age 50 and men on average to age 44. One contributing factor to this short life span is the AIDS epidemic, which has in recent years swept across much of sub-Saharan Africa (that part of the African continent that is south of the Sahara desert).

The Congo is one of the most urbanized countries in Africa. Eighty-five percent of the population lives in Brazzaville, Pointe-Noire, or one of the smaller cities found along the railway which connects Brazzaville and Point-Noire. The official language is French. However, there are many dialects spoken in the Congo of which Lingala and Monokutuba are the most widely spoken.

The population of the Congo is made up of 4 major ethnic groups: the Kongo, the M'Bochi, the Sangha, and the Teke. Only 12,000 pygmies (or the Baka people, a collection of tribes who dwell in African forests in the region occupied by Congo and its neighbors) remain in the country.

OVERVIEW OF ECONOMY

The Congolese economy depends on agricultural production for personal consumption and the exploitation of natural resources. Because the country provides a key port and other transport facilities for neighboring countries such as Chad, Gabon, and the Central African Republic, commercial activities also play an important role in the economy. In 1997, the Congo's government had US$302 million in revenues and US$468 million in expenditures, with a major share of its revenues derived from oil drilling. In the 1980s rising oil revenues provided the Congolese government with the ability to finance large-scale development projects by borrowing against a large share of its future oil income. But this has resulted in shortages in current government revenues. In the late 1990s, oil prices fell and this further reduced government revenue and the country's economic progress. Further, the Congo suffered another setback due to a civil war that broke out in 1997.

By the end of the 1990s the Republic of the Congo was in a state of disarray. The country's external debt in 1997 was estimated at a huge US$5 billion. Added to this burden of debt was a highly overvalued CFA franc, which made it difficult to export goods; a 5-month civil war in 1997 that cost thousands of lives, wreaked havoc on the capital city of Brazzaville, and sent hundreds of thousands of refugees into the countryside and out of the country; a volatile oil market; and a bloated bureaucracy that is unable to quickly shift economic policies for the better.

POLITICS, GOVERNMENT, AND TAXATION

The Congo's 1992 constitution states that the Congo is a multiparty democracy, and that the president is head of state. Legislative power is apportioned between a 125-member National Assembly and a 60-member Senate. The constitution also stipulates that the president and members of the national assembly are to be elected every 5 years, while senate members are to be elected every 6 years. In 1997, however, the constitution was suspended by former President General Denis Sassou-Nguesso, who overthrew the popularly-elected government of President Pascal Lissouba. To his credit, President Sassou installed a cabinet composed of individuals from various political parties in order to build a broad consensus. In addition, he created a unicameral 75-member National Transitional Council to act as a legislature until the time that elections are held again. He has failed, however, to make good on his promise to restore democratic rule to the Congo by 2001.

The Republic of Congo gained its independence from the colonial power of France in 1960, and was led in its first years by a Catholic priest named Abbé Fulbert Youlou, who created a single-party state and aligned the nation with the socialist nations led by the Soviet Union. General Sassou-Nguesso first seized power in 1979. He transformed himself into a civilian leader, and continued the country's socialist policies. However, with the collapse of the Soviet Union in the late 1980s the country made the difficult transition to market economic practices and created a new constitution that paved the way for democratic elections. Sassou-Nguesso lost the presidency in the Congo's first universal elections in 1993 to Pascal Lissouba. In 1997, as the next presidential election loomed, conflict broke out between supporters of President Lissouba and Sassou-Nguesso. A 5-month civil war erupted, and troops from neighboring Angola intervened on Sassou-Nguesso's behalf. General Sassou-Nguesso's forces won, and he declared himself president. However, the peace was short-lived, and fighting broke out once more. The war reached its zenith in 1998 during the battle to control Brazzaville, which substantially destroyed the city and resulted in the deaths of thousands and the flight of 250,000 of its inhabitants. Since that time there have been several attempts to negotiate an end to the conflict, but as of 2001 no settlement has been agreed upon and Sassou-Nguesso remains in power.

The war has had a devastating impact on the Congo's economy, due in part to the severing of the main rail line between Brazzaville and Pointe-Noire, which disrupted trade. Oil revenue is the only reason the Congo has not experienced a total collapse of its economy. In 1998, as a result of the war, the country's budget deficit increased to 30 percent. It was reduced to 10 percent in 1999.

INFRASTRUCTURE, POWER, AND COMMUNICATIONS

Two major rivers—the Congo (the fifth largest in the world) and the Ubangi—carry commercial shipping in the Congo, and comprise a vital mode of economic activity. A 534-kilometer (332-mile) railroad links many of Congo's villages and the 2 major cities of Brazzaville and Pointe-Noire; however, this railway was badly damaged in the civil war of 1997-98. Congo's road system consists of a total of 12,800 kilometers of highways (7,954 miles), of which only 1,242 kilometers (772 miles) are paved. The Congo has 2 international airports in Brazzaville and the port city of Pointe-Noire.

Six newspapers are published in the Congo daily. Congolese sources report that there are 4 AM and 1 FM radio stations, while the CIA World Factbook lists 1 AM, 5 FM, and 1 shortwave station. Very few people in the Congo have telephones, international calls are possible, and the telephone system is highly unreliable. In 1998, there were only 8 telephone lines per 1,000 people. Internet service is provided on a limited basis by the government's Ministry of Post and Telecommunications, as well as by a small number of providers in the neighboring Democratic Republic of the Congo.

The Congo's potential for hydroelectric power generation is substantial, but is not fully exploited. Even though hydroelectric plants provide some 99 percent of the country's power, the Congo must still purchase roughly one-fourth of its electricity requirements from its neighbor, the Democratic Republic of the Congo. Altogether, the total electricity produced in 1998 amounted to 503 million kilowatt hours (kWh). Wood is the primary source of fuel for most people living in rural areas.

ECONOMIC SECTORS

Agriculture contributes to 10 percent of the GDP and employs approximately 60 percent of the workforce, indicating the real inefficiency of this sector. Most participants in the agricultural sector produce food for their own consumption only. Industry and services represents 59 percent and 31 percent of GDP, respectively. Petroleum produced from offshore oil fields and crude oil represent 75 percent of the Congo's annual exports. Additionally, the Congo exports natural gas, lead, gold, and copper.

The Congolese state bureaucracy is a major employer. At the beginning of the 1990s the state employed some 80,000 people, an enormous number for a country of its size. Since that time government efforts to privatize state-run industries have lessened state employment, but the still large and corrupt government bureaucracy acts as a drag on economic growth.

AGRICULTURE

Agriculture and forestry comprised 12 percent of GDP in 1995, and just 10 percent in 1999. Reliable statistics for a country such as the Congo are difficult to obtain, as most agricultural labor takes place outside of official channels, but most estimates put the percentage of the workforce engaged in agriculture between 60 and 75 percent. In 1998, agricultural exports totaled US$15.3 million, while agricultural imports totaled US$130 million. Cassava is the principal food crop. Other major crops include manioc, plantains, bananas, peanuts, sugarcane, cocoa, coffee, and palm kernels. Agricultural commodities that are exported include tropical and other woods, sugar, coffee, and cocoa. The Congo also produces beef and veal, chicken, lamb, game, and pork. Less than 2 percent of the country's land is cultivated.

Forest products from the Congo's lush rainforests represent 10 percent of export earnings, and once led exports until the country developed its oil industry. But due to high transportation and wage costs as well as low productivity, the forest industry has suffered severe declines in recent years.

INDUSTRY

MANUFACTURING.

The Congo's manufacturing sector plays a small role in the economy, consisting of around 100 factories in Brazzaville and Pointe Noire, mostly engaged in the processing of agricultural and forest products. There are a number of companies engaged in manufacturing import-substitution products such as footwear, soft drinks, chemicals, cement, and metal-working products. The less significant sectors of the manufacturing industry produce textiles, footwear, cement, and soap.

OIL.

Oil is Congo's main export and the major support for a faltering economy. In 1998, the Congo exported more than 257,000 barrels of oil daily, and petroleum comprises some 50 percent of exports. In sub-Saharan Africa, the Congo is the fourth-largest oil producer, and has an estimated 1.5 billion barrels in reserve.

In 1994, the Congo took steps to deregulate the oil industry by offering production-sharing agreements with major foreign oil companies. This initiative is intended to regularize the flow of income to the government. Despite these steps, declining oil prices in 1998 badly hurt the Congo's economy. The French oil company Elf-Aquitaine, which accounts for 70 percent of Congo's annual oil production, is the major producer, along with the Italian oil firm Agip, and Chevron and Exxon from the United States. Rising worldwide oil prices in 2001, together with new discoveries and production, are expected to increase export revenues in the coming years.

OTHER INDUSTRIES.

The Congo has the third-largest natural gas reserves in sub-Saharan Africa, estimated at over 3 trillion cubic feet. As of 2001, however, there was no development of a natural gas industry. The Congo has substantial reserves of copper, lead, zinc, gold, and platinum, but these metals are mined in small quantities.

SERVICES

Services provide a major portion of GDP, making a 37 percent contribution in 1997, second only to industry's 59 percent (largely composed of oil production).

One major services area in the Congo is the public bureaucracy. In the early 1990s, the Congolese government was the biggest employer in the country, with a pay-roll in excess of 80,000. This was a severe drain on the country's resources. Due to pressure from the World Bank and other institutions, the government made major cuts in the number of civil servants as well as their salaries. Since the mid-1990s, the payroll has been cut in half and nearly 8,000 government employees have been let go.

Figures for other aspects of the service sector such as banking are sketchy. Most of the service industry is located in Pointe-Noire and Brazzaville. As of 2001, the government was engaged in intensive talks with the World Bank, the IMF, and other bodies in an effort to renegotiate aid packages and rebuild the banking system.

INTERNATIONAL TRADE

With exports of US$770 million and imports of US__BODY__.7 billion, the Congo has a severe trade imbalance of nearly US__BODY__ billion. The Congo conducts considerable trade with other Central African countries such as Cameroon, the Central African Republic, and Gabon, which are part of the Customs and Economic Union of Central Africa. However, it exports the majority of its goods—primarily oil—to Western countries. The United States purchased 23 percent of the country's exports in 1998, while the Benelux countries took 14 percent, followed by Germany, Italy, Taiwan, and China. France was the major source of goods imported into the Congo, with 23 percent; the United States provided 9 percent; Belgium, 8 percent; and the United Kingdom, 7 percent.

Although the Congo has a bilateral investment treaty with the United States and a new investment code intended to bring in more foreign direct investment, it has been unable to attract meaningful foreign investment. According to the U.S. Department of State Background Notes, "High costs for labor, energy, raw materials, and transportation; militant labor unions; and an inadequate transportation infrastructure are among the factors discouraging investment. The recent political instability, war damage, and looting also will undermine investor confidence."

MONEY

The Republic of the Congo is part of the Central African Monetary and Economic Union (Communauté Economiquareue et Monetaire de l'Afrique Centrale, or CEMAC), a group of 5 francophone countries that use the same currency, the CFA franc. The CFA franc is tied to the French franc and can be readily exchanged at 50 CFA francs to 1 French franc. Congo, like all members of the CFA franc communities, has benefitted from this stable currency.

As a member of the CFA zone, Congo was profoundly affected by the 50 percent devaluation of the CFA in 1994. The currency had been overvalued prior to the devaluation, making it difficult for the country to export its goods. The devaluation has made its traditional exports more competitive on world markets. In the short term, however, devaluation lowered living standards and probably increased poverty by raising prices while most salaries remained static.

CEMAC planned to open a regional stock exchange in Libreville, Gabon, in 2001, despite the existence of a limited stock exchange in Douala.

POVERTY AND WEALTH

The lack of proper monitoring makes it difficult to determine the actual income levels of the Congolese people, the majority of whom are involved in subsistence agriculture and trade their labor for the goods that they need. World Bank estimates indicate that the per capita GDP was just US$670 per year in 1999. According to the Congolese government, only 30 percent of the population has access to health care, and they estimate that CFA44 billion is needed to rebuild the medical services sector. Further, there are over 120,000 HIV/AIDS victims in Congo, and only 14 percent of the people live in "healthy" environments.

For children ages 6 through 16, schooling is compulsory and free. The CIA and World Bank estimate that 79 percent of Congolese over the age of 15 are literate. The country's only university, Universite Marien-Ngouabi, is located in Brazzaville and has an enrollment of 12,000 students annually.

WORKING CONDITIONS

The lack of proper monitoring agencies makes it impossible to estimate the total workforce or unemployment figures for the Congo; moreover, the existence of a large informal economy and subsistence agricultural practices would distort any figures that were available.

The government calls for a monthly minimum wage of about US$85, a sum insufficient to afford a worker and his or her family a decent standard of living. The lack of proper protections for workers has led to the rise of a number of militant labor unions, including the Congolese Trade Union Congress, the General Union of Congolese Pupils and Students, the Revolutionary Union of Congolese Women, and the Union of Congolese Socialist Youth.

COUNTRY HISTORY AND ECONOMIC DEVELOPMENT

1879. Pierre Savorgnan de Brazza of France explores the area of today's Congo. He signs treaties with its leaders and declares the area to be subject to France's protection. Subsequently, this territory becomes known as the Middle Congo.

1910. The Middle Congo officially becomes one of France's federated colonies. Brazzaville becomes the principal city of the Middle Congo and head of the Federation's government.

1924-34. The Congo-Ocean Railway is completed, which paves the way for the development of the port city of Point-Noire and the numerous townships along the ocean.

1944. Major reforms in France's colonial policy take place as a result of the Brazzaville Conference, including the end of compulsory labor, French citizenship for colonial members, and the right to limited self-rule.

1960. France grants Middle Congo its independence; the country is renamed the Republic of the Congo.

1963. Fulbert Youlou becomes the Congo's first president and prohibits all political parties except his own. He is overthrown by Alphonse Massamba-Débat 3 years later. President Massamba-Débat introduces communism to the Congo and establishes strong ties with communist states, including the People's Republic of China.

1968. Marien Ngouabi becomes head of state after overthrowing Massamba-Débat. Ngouabi's 9-year rule is even more leftist than that of his predecessor.

1970. A new constitution is ratified, renaming the country the People's Republic of the Congo.

1977. General Joahim Yhombi-Opango assumes power after Ngouabi is assassinated. The Congo continues its close ties with France, despite its ideological affiliation with communism.

1979. President Yhombi-Opango is succeeded as president by Colonel Denis Sassou-Nguesso.

1981. The Congo signs a treaty with the Soviet Union establishing cooperation and friendship between the 2 nations.

1991. A new constitution is ratified making the Congo a multi-party democracy. The country's name is changed back to the Republic of the Congo and the country adopts a new national flag and anthem.

1992. Sassou-Nguesso is defeated in the presidential elections by Pascal Lissouba. Subsequently, Lissouba is accused of ethnic favoritism and armed factions supporting Sassou-Nguesso rise against him.

1997. Civil war breaks out in Brazzaville, which results in Brazzaville's destruction. Later that year, Sassou-Nguesso overthrows Lissouba with help from Angola.

FUTURE TRENDS

One of the major impediments to improvements to the Congo's economy is the service on the Congo's external debt. The Congo is one of Africa's most indebted countries, with its foreign debt totaling about 250 percent of its GDP. As a result, too large a share of the government's revenues goes to servicing that debt and very little remains for building infrastructure and maintaining the social services of the country. To solve this problem, the International Monetary Fund agreed to an Interim Post-Conflict Reconstruction and Rehabilitation Program which provides for debt relief based on the Congo's implementation of economic reforms. If these measures are undertaken, and debt relief is begun, this will free up much needed resources that can be channeled to infrastructure building. Improvements in infrastructure are essential if the country wishes to draw any foreign investment and build its underdeveloped manufacturing and industrial base.

The Congo's economic progress had been hampered by poor oil prices in 1998, which resulted in a decline in government revenue. The government also experienced a slump in revenue as a result of the war. Both of these factors contributed to the major decline in the Congo's economy, which experience-3.0 percent annual GDP growth in 1999. Subsequent increases in world oil prices in 2000 and 2001 were certain to aid the economy, though the destruction of the country's infrastructure by the 1997-98 civil war may make it difficult for the country to prepare its goods for export.

In the long term, the Congo must rebuild political stability and commit itself to the dual projects of paying down public debt and rebuilding its infrastructure. Should it solve its political problems the country is likely to gain the assistance of international lending agencies, but even with such assistance the Congo faces a long and difficult road to economic well-being.

DEPENDENCIES

The Republic of the Congo has no territories or colonies.

BIBLIOGRAPHY

Congo Brazzaville Report. <http://www.brazzaville-report.com>.Accessed July 2001.

CongoWeb. <http://www.congoweb.net/english.html>. AccessedJuly 2001.

Economist Intelligence Unit. Country Profile: Republic of the Congo. London: Economist Intelligence Unit, 2001.

"Republic of Congo." The World Bank Group. <http://wbln0018.worldbank.org/AFR/afr.nsf/3b04e45cded3efce852567cf004d4c6b/ce353f161c2b36ef852567d1004790b5?OpenDocument>. Accessed August 2001.

U.S. Central Intelligence Agency. World Factbook 2000. <http://www.odci.gov/cia/publications/factbook/index.html>. Accessed August 2001.

U.S. Department of State. Background Notes: Congo. <http://www.state.gov/www/background_notes/congo-ro_0002_bgn.html>. Accessed August 2001.

—Michael David Nicoleau

Raynette Rose Gutrick

CAPITAL:

Brazzaville.

MONETARY UNIT:

Communauté Financiére Africaine franc (CFA Fr). The CFA franc is tied to the French franc at an exchange rate of CFA Fr50 to Fr1. One CFA franc equals 100 centimes. There are coins of 5, 10, 50, 100, and 500 CFA francs, and notes of 500, 1,000, 2,000, 5,000, and 10,000 CFA francs.

CHIEF EXPORTS:

Petroleum, tropical and other woods, diamonds, sugar, coffee, and cocoa.

CHIEF IMPORTS:

Petroleum products, machines and appliances, construction materials, chemical products, transportation equipment, foodstuffs, textiles, and paper products.

GROSS DOMESTIC PRODUCT:

US$4.15 billion (purchasing power parity, 1999 est.).

BALANCE OF TRADE:

Exports: US__BODY__.7 billion (f.o.b., 1999). Imports: US$770 million (f.o.b., 1999).