Due To Lower Global Metals Prices, DR Congo Is Set To Revise And Slash Its 2016 Budget By 22 Percent

The government of the Democratic Republic of Congo (DRC) has proposed to slash it’s 2016 budget by 22 percent. The cut is mainly attributed to lower global metals prices, according to a revised budget to be presented to parliament. In addition to the cut, the government also lowered its GDP forecast for 2016 to 6.6 percent from an earlier estimate of 9 percent.

In a statement, the government cited that the changes were due to suspension of some mining activities and closure of some mining businesses. The extractives industry accounts for some 98 percent of the country’s export earnings. Analysts say the decision to cut the country’s budget in an election year has come as a surprise since most governments raise spending before elections to enhance their appeal to the voters.

DRC is the world’s largest source of cobalt and Africa’s biggest miner of copper and tin, but is facing tough economic times due to a commodities slump that has lowered foreign exchange reserves and put pressure on its currency. The political climate in the country has also grown increasingly tense, with President Kabila’s opponents accusing him of seeking to extend his stay in power. Click here to read more on DR Congo’s 2016 economic outlook