Strategic Risks to Public Finances in the Democratic Republic of the Congo

Executive Summary

The Democratic Republic of the Congo (DRC) faces a growing disconnect between strong macroeconomic performance and deteriorating public financial management. While mineral exports and revenue gains support short-term growth, rising emergency expenditures, weak procurement oversight, and stalled reforms are placing the fiscal system under strain.

Key findings from African Security Analysis (ASA) and recent IMF reviews include:

• Escalating Emergency Spending: Over 15% of Q1 2025 expenditures bypassed normal procedures—mostly linked to security operations—undermining transparency and fiscal discipline.
• Stalling Reform Progress: Despite improvements in tax administration, budget execution remains uneven, with overspending and missed performance benchmarks.
• Uncontrolled Decentralization: Rapid fiscal transfers to provinces lack oversight, increasing inefficiency and political fragmentation.
• Debt Fragility: Though debt levels are manageable, reliance on concessional borrowing and commodity revenues heightens exposure to external shocks.

ASA assesses these risks as systemic, not episodic. Without stronger governance, tighter spending controls, and renewed reform momentum, fiscal credibility—and broader economic stability—may be at risk.

Overview: A Dual Narrative of Growth and Instability

The Democratic Republic of the Congo (DRC) is at a fiscal crossroads. On one side, economic growth remains robust, supported by mineral exports and improving macroeconomic indicators. On the other, public finances are showing signs of strain under the weight of mounting security expenditures, irregular spending practices, and structural governance weaknesses.

African Security Analysis (ASA) has carefully reviewed the most recent assessment published by the International Monetary Fund (IMF) following its first review under the Extended Credit Facility program. The findings validate many of ASA’s own field-based observations: while the macro framework appears stable on the surface, underlying vulnerabilities are growing, particularly in the way public resources are being allocated and controlled.

Emergency Expenditures and Security-Driven Distortions

A key highlight of the IMF review—confirmed by ASA’s internal sources—is the excessive use of emergency procedures in public spending. In the first quarter of 2025, 15.6% of all expenditures were executed outside the normal procurement framework, with 90% of those labelled as “exceptional”. The government justifies this surge by citing the intensified conflict in eastern provinces, which has demanded urgent and large-scale military deployments.

However, ASA has verified that this emergency model is now affecting fiscal discipline more broadly. Military procurement, logistics, and field operations are frequently conducted without transparent cost controls. Furthermore, several senior FARDC officers have come under scrutiny for inflated budgets and opaque contracting practices—raising concerns not just about corruption, but about the sustainability of defence financing in a prolonged conflict scenario.

Fiscal Slippage and Reform Fatigue

Despite revenue gains, the government overshot its domestic deficit target in 2024. Key performance benchmarks related to spending discipline and revenue collection have not been fully met. While some progress has been made in tax administration and digitalization, the reform momentum appears fragile, especially as political and military priorities consume fiscal and institutional capacity.

Moreover, budget execution remains uneven, with overspending in public investments and inconsistent disbursement at the provincial level. This reinforces the perception of a fragmented system where plans and reality diverge sharply.

Decentralization Without Controls

The decentralization of public finances—while a long-term objective—has created a growing risk of disconnection between central fiscal policy and provincial-level implementation. Many provinces operate with weak oversight, limited reporting, and growing autonomy in resource usage. The rapid increase in subnational transfers, without matching accountability mechanisms, has opened the door to inefficiencies and parallel systems of local power.

Debt Structure and Exposure

Though public debt levels remain moderate, ASA notes that the structure of DRC’s debt is fragile. The country remains heavily reliant on concessional borrowing, with limited room for maneuverer should conditions change. The narrow base of domestic taxation and the volatility of commodity revenues increase exposure to external shocks—particularly in a region where climate risks, geopolitical instability, and price fluctuations are becoming more frequent.

Strategic Assessment: Risk Escalation in a Politically Sensitive Context

ASA assesses that the risks to DRC’s fiscal trajectory are not merely technical—they are systemic. The current reliance on emergency spending, especially in the defence sector, reflects deeper tensions between short-term security imperatives and long-term financial sustainability. The normalization of off-budget procedures erodes budget credibility and weakens public trust.

At the same time, the failure to fully implement structural reforms—especially in procurement transparency, subnational budgeting, and domestic revenue expansion—suggests a growing disconnect between planning and execution. In many provinces, fiscal decentralization is proceeding faster than institutional accountability, creating administrative fragmentation and political exposure.

The country’s macroeconomic performance may continue to look strong in the short term, but unless governance improves and spending is redirected toward development and stability, the fiscal base itself will weaken. Investors, partners, and international institutions may begin to reassess their risk tolerance if the state cannot demonstrate tighter control over its public spending and security expenditures.

ASA maintains a strong presence and operational intelligence network across the DRC, including access to field-level insights, provincial data streams, and senior administrative counterparts. Our analysts monitor fiscal and institutional developments in real time, enabling strategic forecasting and early risk detection.

For investors, development actors, and corporate leaders seeking to operate in the DRC, ASA offers not just analysis—but partnership. Whether in mining, logistics, agriculture, infrastructure, finance, or humanitarian operations, diplomacy or security, we provide:

• Political and fiscal risk briefings
• Scenario modelling tied to budgetary and governance shifts
• Strategic advisory on entry, expansion, or continuity in volatile provinces
• Tailored support for stakeholder engagement, license tracking, and regulatory shifts

If you are looking to invest or expand in the DRC, ASA offers evidence-based support to organizations navigating fiscal and political uncertainty in the DRC.