President Félix Tshisekedi encourages the Government to accelerate the process of de-dollarization of the national economy

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Kinshasa, August 11th, 2021 (CPA).- The President of the Republic, Félix Antoine Tshisekedi Tshilombo encouraged the government to strengthen the stability of the Congolese Franc in order to accelerate the process of de-dollarization of the national economy of the DRC, in its communication last Friday, to the ministers meeting in Council by videoconference.

The Minister of Communication and Media and government spokesperson, Patrick Muyaya Katembwe, who indicated in his report of this meeting, said that the Head of State has, to this end, called for a deep reflection to make the Franc Congolais a strong and stable currency.

He thus urged the Government to give concrete form to its commitment to implement credible macroeconomic policies and to accelerate structural reforms that should ultimately help strengthen the internal and external stability of the national currency in order to significantly improve the economy. purchasing power of the Congolese citizen.

The Government and the Central Bank of Congo (BCC) should, in this regard, consolidate efforts to make the Congolese Franc a stable and strong currency.

De-dollarization, one of the priorities of the new governor of the BCC

It should be noted that the continuation of the process of “de-dollarization” of the Congolese economy is one of the priorities for the new boss of the Central Bank of Congo Malangu Kabedi Mbuyi, senior executive of the International Monetary Fund (IMF), named the July 5, 2021 to replace Déogratias Mutombo, after 7 years in this position.

However, Governor Kabedi, the first woman of the 12 governors who have presided over the destinies of this largest financial institution in the DRC since 1961, is expected to clearly define the guidelines for this de-dollarization process.

In his time, the outgoing governor, Déogratias Mutombo, proposed to fight against dollarization by the development of the internal market of value of the Treasury with a view to the invigorating of the channels of transmission of the impulses of the monetary policy and the reestablishment of the national currency in its threefold function of unit of account, means of payment and store of value.

Many experts, however, believe that action should be taken in other areas, such as public debt in foreign currencies or foreign currency deposits of the money supply. However, the only danger, according to them, is the temptation to exert a forcing, that is to say a forced « de-dollarization », with multiple consequences for our economy.

In Congolese socioeconomic life, the American dollar is used as a store of value, a unit of account and a means of payment.

In fact, most bank deposits, bank transfers, the prices of raw and manufactured products, the prices of services such as rental of houses, equipment or furniture; transport, maintenance and repair of movable and immovable property; health care, school and academic fees, etc. ; almost everything is done for the US dollar. Thus, the dollar is now the permanent benchmark. The Congolese franc no longer performs the monetary functions of a store of value, a unit of account and a trade intermediary.

In any case, according to Professor Mabi Mulumba, the situation of the national currency would not be as deplorable as one might think.

« We must not lose sight of the fact that since 1997, Felix Tshisekedi’s regime is to date the one that has recorded a low rate of depreciation, » he said on July 27, 2020.

With the advent of the Congolese franc in 1998, he said, the parity of the new currency against the dollar was 1.30 FC. In 2001, when President Laurent-Désiré Kabila was assassinated, there was a 311% depreciation. At the end of 18 years in power, President Joseph Kabila left behind a Congolese franc which suffered a depreciation of 425%. For now, the depreciation under Felix Tshisekedi is just over 19%. The macroeconomic parameters have evolved mainly because of the perverse effects of the Coronavirus on the economies.