Global credit ratings agency Standard & Poor’s (S&P) has revised the Democratic Republic of Congo’s (DRC) sovereign credit outlook from stable to positive, due to improving economic conditions and ongoing reform efforts.
It is the first time in nearly five years that S&P has assigned a positive outlook to the DRC, in what looks like a growing confidence in Congo’s economic trajectory and its ability to manage fiscal and external challenges.
In its January 23 decision, S&P maintained Congo’s long-term foreign and local currency ratings at B- and short-term ratings at B, but said that sustained progress in economic performance and fiscal management could support a future upgrade.
The revision is based on expectations of continued improvements in tax administration, stronger public finances, favourable export trends and policy measures supported by the International Monetary Fund (IMF).
A key driver behind the positive outlook is the strength of the country’s mining sector, which dominates Congo’s economy.
Robust global demand for copper and cobalt, essential minerals for electric vehicles and renewable energy technologies, has helped lift production and export earnings.
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S&P projects that real gross domestic product (GDP) growth will average around 5 percent annually through 2028, with mining remaining the principal source of expansion and foreign exchange inflows.
The outlook shift also reflects optimism about Congo’s macroeconomic stability following recent IMF assessments of the country’s Extended Credit Facility programme.
According to S&P, ongoing reforms are expected to broaden the tax base and improve revenue collection, reducing the government’s heavy reliance on the mining sector, which currently accounts for over 40 percent of state revenue.
While the mining boom presents significant opportunities, S&P and other analysts caution that security challenges, especially in the eastern regions of the country, continue to pose risks.
The rating comes as Congo prepares for its first international Eurobond issuance $750 million on the global markets, with officials saying the positive outlook will strengthen investor confidence ahead of the sale.
Finance Minister Doudou Fwamba Likunde said S&P’s decision is a knee-jerk to Congo’s economic resilience and reform agenda.
