Customs, income tax and fees outpaced 2021’s daily average while payroll took two-fifths of spending.

By Kanisa Magazine · February 2022

Congo’s three tax and customs agencies collected 1,514 billion francs by 18 February 2022, about US$757 million, and the pace in February was slightly faster than the 2021 average. Spending over the same period was 1,500 billion, with payroll taking 41 per cent. The state’s cash position was modestly positive, but only because revenue arrived before the bills.

That is the story beneath the mining headline. Copper and cobalt dominate exports, yet public finances run on customs duties, income taxes and fees collected from importers, traders and employers. Customs alone brought in 429 billion francs, 28 per cent of the three-agency total, and customs revenue depends on the dollars that mining generates.

The revenue ledger

Own-source revenue ran at 31.9 billion francs a day in the first 18 days of February, against 30.8 billion in 2021.

The BCC digest reports revenue from the DGI (taxes), the DGDA (customs) and the DGRAD (administrative revenue) at 939.8 billion francs on 31 January and 1,514.2 billion on 18 February. Both numbers are cumulative for the year. The 2021 total, 11,252 billion, equates to 30.8 billion francs a day, so February ran about 3.5 per cent ahead of the prior year’s average. Oil revenue showed 83.7 billion and had not moved since the end of January.

Mechanism: how mining dollars become tax

Export dollars finance imports, and imports are where the state collects first.

The DGDA took 429.4 billion francs, the DGI 804.7 billion and the DGRAD 280.1 billion. Customs duties are levied on import values, which are denominated in dollars and converted into francs at rates close to the 1,999.45 shown on the BCC’s rate page for 18 February. When copper receipts and IMF money lift dollar supply, importers buy more, customs rises, and the Treasury benefits even before any mine pays more. The same chain makes revenue sensitive to the exchange rate and to the import bill, which is why the tax base is more cyclical than it appears.

The spending side

Salaries and operating costs absorbed 69 per cent of outlays, leaving little for capital projects.

Of the 1,500 billion francs spent by 18 February, remuneration was 614.3 billion, or 40.9 per cent, and operating costs 425.3 billion, or 28.3 per cent. The cash surplus of 261.5 billion francs, about US$131 million, is partly timing, since spending commitments are not spread evenly across the month. The IMF’s December review described stepping up domestic revenue mobilisation as a pillar of the Extended Credit Facility, and the early-2022 ledger shows why: the state’s spending commitments are large and recurring, and its revenue base is narrow.

Two cautions apply. The figures are cumulative and provisional, so a late entry can move the daily pace, and a cash surplus in a young year says little about the full-year balance. The oil-revenue line has not changed since 31 January, which may mean unreported receipts rather than none. Even so, the direction is clear: the state is collecting at least as fast as last year, and much of it comes from trade and fees rather than from any single mining payment.

What it means for suppliers and investors

Customs and tax revenue tracks imports, so a supplier’s best signal is the import bill, not the copper price.

Companies that sell to the state or depend on public payments should watch two variables: the pace of customs collection and the payroll share of spending. When revenue runs ahead of the average and payroll is covered, payment on contracts tends to be easier; when the balance turns negative, arrears tend to fall on suppliers first. For investors, the finding is that the state’s capacity to pay rests on the import cycle and the exchange rate, so risk assessment should include customs data. The revenue story beneath the mining headline is a story of trade and tills, and February shows both working.