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Democratic Republic of Congo Public Disclosure Authorized Systematic Country Diagnostic

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Democratic Republic of Congo Public Disclosure Authorized Systematic Country Diagnostic Report No. 112733-ZR Democratic Republic of Congo Public Disclosure Authorized Systematic Country Diagnostic Policy Priorities for Poverty Reduction and Shared Prosperity in a Post-Conflict Country and Fragile State March 2018 Africa Region Public Disclosure Authorized Public Disclosure Authorized Document of the World Bank Public Disclosure Authorized IDA (International IFC (International MIGA (Multilateral Development Association) Finance Corporation) Investment Guaranty Agency) Vice President: Makhtar Diop Snezana Stoiljkovic Keiko Honda Director: Jean-Christophe Carret Cheikh Oumar Seydi Merli Baroudi Task Team Leaders: Emmanuel Pinto Moreira (TTL) Adamou Labara (TTL) Petal Jean Hackett Chadi Bou Habib (Co-TTL) Babacar Sedikh Faye (Co-TTL) Franck M. Adoho (Co-TTL) This report was prepared by a World Bank Group team led by Emmanuel Pinto Moreira (Lead Economist and Program leader EFI (Equitable Growth, Finance, and Institutions), and TTL (Task Team Leader), including Adamou Labara (Country Manager and TTL), Babacar Sedikh Faye (Resident Representative and Co-TTL), Franck M. Adoho (Senior Economist and Co-TTL), Chadi Bou-Habib (Lead Economist and Program leader EFI, and Co-TTL), Laurent Debroux (Program Leader), Luc Laviolette (Program Leader), Andreas Schiessler (Lead Transport Specialist), Alexandre Dossou (Senior Transport Specialist), Jerome Bezzina (Senior Regulatory Economist), Malcolm Cosgroves-Davies (Lead Energy Specialist), Pedro Sanchez (Lead Energy Specialist), Manuel Luengo (Senior Energy Specialist), Anas Benbarka (Senior Energy Specialist), Jose Peres Caceres (Energy Specialist), Alain Ouedraogo (Energy Specialist), Francisco Igualada (Senior Mining Specialist), Rachel Perks (Senior Mining Specialist), Marie-Laure Lajaunie (Lead Water Resource Management Specialist), Pierre Boulenger (Senior Water and Sanitation Specialist), Madio Fall (Senior Water and Sanitation Specialist), Aude-Sophie Rodella (Senior Economist), Maximilian Hirn (Economist), Douglas Graham (Senior Environmental Specialist), Daniela Goehler (Senior Carbon Finance Specialist), Laurent Valiergue (Senior Forestry Specialist), Julian Lee (Environmental Specialist), Loic Braune (Natural Resources Management Specialist), Esther Naikal (Economist), Nora Kaoues (Senior Agriculture Economist), Diego Arias (Lead Agriculture Economist ), Amadou Oumar Ba (Senior Agricultural Specialist), Sara Mbago (Senior Agriculture Economist), Joanne Gaskell (Agriculture Economist), Sylvie Debomy (Lead Urban Development Specialist), Mahine Diop (Senior Municipal Engineer), Christian Vang Eghoff (Urban Specialist), Dina Ranarifidy (Urban Specialist), Jean-Baptiste Migraine (Senior Disaster Risk Management Specialist), André Teyssier (Senior Land Administration Specialist), Maurizia Tovo (Lead Social Protection Specialist), Maria Amelina (Senior Social Development Specialist), Lucienne M'Baipor (Senior Social Development Specialist), Patricia Fernandes (Senior Social Development Specialist), Pia Peeters (Senior Social Development Specialist), Benjamin Burckhart (Social Development Specialist), Louise Mvono (Senior Education Specialist), Waly Wane (Senior Economist), Christophe Rockmore (Senior Economist), Dung-Kim Pham (Senior Operations Officer), Diego Martin (Senior Operations Officer), Hadia Samaha (Senior Operations Officer), Serdar Yilmaz (Lead Public Sector Management Specialist), Saidou Diop (Senior Financial Management Specialist), Jean-Mabi Mulumba (Senior Public Sector Specialist), Shomikho Raha (Senior Public Sector Specialist), Denis Tshibombi Leta (Governance Specialist), Philippe M. Aguera (Senior Financial Sector Specialist), Alain Tienmfoltien Traore (Senior Private Sector Specialist), Milaine Rossanaly (Private Sector Specialist), Arthur Mambou (Senior Investment Officer), Olufunso Ayomide Fasetire (Investment Officer), Richard Kasenga (Investment Officer), Frank Douamba (Chief Program Manager), Sylvia Zulu (Principal Operations Officer), Markus Scheuermaier (Senior Operations Officer); Marina Diagou (Associate Investment Officer), Gcinisizwe Mdluli (Associate Operations Officer), Moise Tshimenga Tshibangu (Economist), Ephraim Kebede (Consultant), Bertrand Murguet (Consultant), Jean-Philippe Mukuaki (Consultant), Hugo De Vries (Consultant). The team received guidance from Country Director Ahmadou Moustapha Ndiaye, Director Cheikh Oumar Seydi, Country Program Coordinator Yisgedullish Amde, and Senior Operations Officer Matthias Cinyabuguma. Amina Adele Temanda (Program Assistant) and Balume Alpha Abonabo (Team Assistant) provided logistical support and Oscar Parlback proofread and edited the document. JPD Systems translated the document from English to French. Abbreviations and Acronyms ANS Adjusted Net Savings ANSER National Rural Energy Service Agency (Agence Nationale de Service Energétique Rural) ARCA Insurance Supervision and Regulation Authority (Autorité de Régulation et de Contrôle des Assurances) ARE Electricity Regulatory Agency (Agence de Régulation de l’Electricité) ARMP Procurement Regulation Authority (Autorité de Régulation des Marchés Publics) ASM Artisanal and Small-Scale Mining BCC Central Bank of the Congo (Banque Centrale du Congo) BDS Business Development Services BTI Bertelsmann Transformation Index CAB Current Account Balance CDF Congolese Franc CVM Sea transportation SOE (Congolaise des Voies Maritimes) DHS Demographic and Health Survey DRC Democratic Republic of the Congo EITI Extractive Industries Transparency Initiative FDI Foreign Direct Investment FORNET Forensic Offender Rehabilitation FSI Fragile States Index Gécamines Copper Mining SOE (Générale des Carrières et des Mines) GBV Gender Based Violence GDP Gross Domestic Product GNDI Gross National Disposable Income HDI Human Development Index HIPC Heavily Indebted Poor Countries ICCN Institut Congolais pour la Conservation de la Nature ICT Information and Communications Technology IDMC Internal Displacement Monitoring Center IDP Internally Displaced Person IIAG Ibrahim Index of African Governance IMF International Monetary Fund IPV Intimate Partner Violence MFM Macroeconomic and Fiscal Management MONUSCO United Nations Organization Stabilization Mission in the Democratic Republic of the Congo (Mission de l'Organisation des Nations unies pour la stabilisation en République démocratique du Congo) MSME Micro, Small and Medium Enterprise NDC Nationally Determined Contribution NGOs Non-Government Organizations NRC Norwegian Refugee Council NSS National Statistical System PA Protected Area PER Public Expenditures Review PEMFAR Public Expenditures Management and Financial Accountability Review PIP Public Investment Program PPP Public-Private Partnership PRSP Poverty Reduction Strategy Paper PTSD Post-Traumatic Stress Disorder REDD+ Reducing Emissions from Deforestation and forest Degradation Regideso Urban Water SOE (Régie de distribution d’eau) SAEMAPE Artisanale and Small-Scale Mining Support Service (Service d’Assistance et d’Encadrement de l’Exploitation Minière Artisanale et à Petite Echelle) SCD Systemic Country Diagnostic SCTP Transportation and Ports SOE (Société Commerciale des Transports et des Ports) SME Small and Medium-sized Enterprise SNEL National Electricity Company (Société Nationale d’Electricité) SOE State-Owned Enterprise Sqkm Square Kilometer TFR Total Fertility Rate 3Ts Tin, Tantalum, and Tungsten TVET Technical and Vocational Education and Training U5MR Under-5 Mortality Rate UN United Nations UNESCO UN Educational, Scientific and Cultural Organization UNHCR United Nations High Commission for Refugees UN WPP United Nations World Population Prospects VAT Value-Added Tax WBG World Bank Group WDI Worldwide Development Indicators WDR World Development Report WGI Worldwide Governance Indicators Table of Contents Preamble ......................................................................................................................................... i Executive Summary ...................................................................................................................... 1 Chapter 1. Progress amid Vulnerabilities, Risks, and Uncertainties ..................................... 13 1.1. Historical Perspective and Current Political and Security Context, 1960–2016 ............................................. 13 1.2. Recent Economic Developments, 2010–17 ....................................................................................................... 16 1.3. Facing New Challenges and Risks in a Rapidly Changing Global Economy .................................................. 21 Chapter 2. Reducing Poverty and Sharing Prosperity ............................................................ 23 2.1. The Dynamics of Poverty and Inequality ......................................................................................................... 23 2.2. The Dynamics of Poverty: A Macro Decomposition Perspective ..................................................................... 27 2.3. The Dynamics of Poverty: A Micro Decomposition Perspective ...................................................................... 28 2.4. Rural poverty, agriculture, risks, and vulnerability ......................................................................................... 30 2.5. Educational Attainment and Poverty ................................................................................................................ 31 Chapter 3. Political Instability and Governance Failures: The Challenge of Extractive Political Institutions ...................................................................................................................
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