The Democratic Republic of the Congo (DRC) is navigating a fiscal paradox in 2025: while tax revenues have climbed, the budget deficit continues to widen as state expenditures surge at an even faster pace. This imbalance, now deeply entrenched in the country’s fiscal framework, forces Kinshasa to make tough choices between stimulating economic growth, maintaining internal security, and meeting the fiscal benchmarks set by international partners.
Tax collection improves but remains under strain
The DRC’s revenue agencies—the General Directorate of Taxes (DGI), the General Directorate of Customs and Excise (DGDA), and the General Directorate of Administrative, Judicial, and Dominal Revenue (DGRAD)—have seen measurable gains in performance. This improvement stems from a broader tax base, partial digitization of tax processes, and stricter enforcement against informal export channels, particularly in the mining hubs of Katanga and Kivu. The international market has also played a role, with copper and cobalt prices holding firm, boosting revenue from the extractive sector. However, this income—partially secured through the 2018 mining royalty framework—remains vulnerable to market volatility and the rising competition from alternative battery materials.
Public spending surges driven by security and salaries
On the expenditure side, the pressure is unrelenting. The ongoing conflict in the eastern DRC, where the Armed Forces of the DRC (FARDC) are locked in combat with armed groups and the M23 in North Kivu, demands significant resources. The state of emergency, repeatedly extended since 2021, has further inflated security-related spending beyond initial budget allocations. Another major strain comes from the wage bill, which has ballooned due to salary increases for teachers, magistrates, and other civil servants, as well as new hires in defense and healthcare. Each new wage agreement, often brokered under social pressure, adds to a fiscal imbalance that budget officials struggle to control. Compounding the issue, emergency spending tied to recurring floods and mass displacement in the east has added to the strain. Subsidies, particularly in the hydrocarbons sector to stabilize pump prices, and delays in public investment projects—despite legal protections—have further squeezed fiscal space.
Budget gap raises questions about long-term sustainability
The growing gap between rising revenues and soaring expenses has forced the government to rely more heavily on monetary financing and domestic debt issuance. This approach, already flagged by the International Monetary Fund (IMF) in reviews of the Extended Credit Facility program, has pushed domestic interest rates higher and put pressure on the Congolese franc. The Central Bank of the Congo (BCC) has responded by tightening monetary policy to defend the currency’s stability. Another consequence is the buildup of domestic arrears, which has weakened the cash flow of state suppliers and undermined the financial health of local SMEs. Several construction and service firms have reported delayed payments, raising concerns about the sustainability of public contracting and fostering mistrust in government procurement.
Looking ahead, the Congolese government faces a critical test: reining in tax exemptions, accelerating the adoption of electronic invoicing, and curbing wage growth without reigniting social unrest. The credibility of the macroeconomic framework agreed with international lenders, including the IMF and the World Bank, hinges on the government’s ability to stabilize the budget trajectory in the coming months. The gap between revenue collection and spending continues to widen, making the fiscal equation increasingly difficult to balance.
