Evaluation workshop of the mid-term report of the study on “the impact of the reduction of petroleum product subsidies on the Congolese economy”
“The results still have some uncertainties; no decision can therefore be considered", declares Jean-Baptiste Ondaye
04 Apr, 2023
The Minister of Economy and Finance, Jean-Baptiste Ondaye, opened and closed the work, Tuesday, April 4, 2023 in Brazzaville, of the Workshop to evaluate the mid-term report of the study on '' the 'impact of the reduction of petroleum product subsidies on the Congolese economy''. He had at his side, four colleagues. In this case Bruno Jean Richard Itoua, (in charge of Hydrocarbons); Ludovic Ngatsé (of the Budget); Honoré Nsayi (of Transport); and Antoine Thomas Nicéphore Fylla Saint-Eudes (Industrial Development).
This study was entrusted, in December 2022, by the Ministry of Economy and Finance (through the General Directorate of Economy) to the Network for Inclusivity, Emergence and Sustainability in Central Africa (RIEDAC) .
The reduction of subsidies for petroleum products (in other words the 5% increase in the price at the pump), is part of the Three-Year Program that Congo concluded in January 2022 with the Bretton Woods Institutions, in particular the IMF. This Program provides for a series of structural reforms, which aim to adjust Congo's expenditure to the level of resources. Clearly, the reduction of petroleum product subsidies aims, on the one hand, to significantly improve the state of public finances. And, on the other hand, to make populations (even the poorest) accessible to petroleum products.
The presentation of the study report was made by Célestin Tsassa, Executive Secretary of RIEDAC.
After fruitful exchanges between the participants in the Workshop around the Report, the Consultants, members of the Network, took note of the various remarks and suggestions.
For his part, the Minister Jean-Baptiste Ondaye congratulated the efforts made by the Consultants, whom he encouraged to capitalize on the fruitful exchanges.
According to him, “the results still contain some uncertainties; no decision can therefore be considered.
Among the conclusions reached by this mid-term evaluation of this important project, there are, in particular, the following convergences: subsidies for petroleum products constitute a major burden on public finances; the reduction of subsidies for petroleum products will contribute to limiting the budget deficit, if the pockets of tax evasion and State revenues are dealt with appropriately; the establishment of a participatory pricing mechanism for petroleum products, that is to say, including the corporations of transporters, consumer associations, as well as the main players in the downstream petroleum sector, would help to make prices of petroleum products more flexible, while ensuring that their inflationary effects are limited by indexing local prices to import prices".
This Evaluation Workshop also saw the participation of representatives of the International Monetary Fund (IMF) and the World Bank (WB).
The Communication Unit of the Ministry of Economy and Finance
