Rising oil prices are good for Congolese finances. Brazzaville should experience a rather quiet year 2022, according to Fitch Ratings.
The war between Russia and Ukraine does not disadvantage all of Africa. Indeed, the Ukrainian conflict has created high volatility on the oil markets. Result: prices approached their records. A boon for oil-producing countries, especially for Congo-Brazzaville. And from 2022, the consequences will already be felt for the country's finances.
The rating agency Fitch Ratings has just announced that the country's foreign currency resources would, according to its forecasts… triple this year. The international agency predicts an average price of 100 dollars per barrel. Next year, this rate should drop by 20 dollars.
We are far from the forecasts of Fitch who, before the war in Ukraine, imagined prices halved.
For the rating agency, "Congo's external liquidity is expected to improve significantly, with gross international reserves expected to increase from US$1 billion in 2021 to US$3,2 billion in 2022, then decline slightly to 2,9, $2023 billion in 4,1, equivalent to 3,9 and XNUMX months of current external payments, respectively”.
Excellent news for Brazzaville, which will be able to take four years ahead of the schedule imposed by the International Monetary Fund (IMF). Ideal at a time when Congo has resumed its discussions with the Bretton Woods institution and dealed a three-year financing program of up to 450 million dollars.
Result: “State oil revenues will increase by 74% in 2022, which will lead to a 50% increase in total government revenues”. To do this, Brazzaville will have to increase its oil production: this has been declining in recent years. But according to Fitch, it should start to rise again.
Result: "State oil revenues will increase by 74% in 2022, nothing to get carried away, however: after the first payment defaults - of a eurobond dating from 2007 - the country must now look good with its creditors. And in particular from the IMF which calls for economic and governance reforms to be undertaken, which will lead to a 50% increase in total public revenue”. To do this, Brazzaville will have to increase its oil production: this has been declining in recent years. But according to Fitch, it should start to rise again.
"Achieving the quantitative performance criteria of the program in 2022 will probably be facilitated by the sharp increase in oil revenues", assures Fitch who estimates that "additional multilateral loans on concessional terms" could be contracted.