The budget table reads the non-mining economy through imports, taxes and oil receipts.

By Kanisa Magazine · April 2022

By 22 April 2022 the Congolese state had collected CDF 5,894.1 billion in revenue, 28.9 per cent of its annual forecast with about 31 per cent of the year gone. Behind that near-par figure sit two very different tax lines. The tax directorate (DGI) was at 38.0 per cent of its target. Customs (DGDA) was at 22.5 per cent. Both numbers come from the budget table in the Banque Centrale du Congo’s digest of 27 April.

The split is a reading of the real economy that no mining statistic gives. What customs collect depends on how much the wider economy imports and at what price.

What the budget table shows

Oil and domestic tax receipts ran ahead of plan; customs fell well behind.

The DGI had raised CDF 2,711.9 billion against a forecast of CDF 7,131.0 billion. Oil producers had paid CDF 159.4 billion, 40.4 per cent of CDF 395.0 billion. The DGRAD, which collects non-tax revenue, stood at CDF 820.7 billion, 30.8 per cent of its target. Customs had collected CDF 1,024.9 billion of CDF 4,565.9 billion.

Spending ran slightly ahead of income. Expenditure reached CDF 6,302.2 billion, 30.9 per cent of the annual allocation, leaving a deficit of CDF 408.0 billion, about US$204 million at the franc’s rate of near 2,000. Public-sector pay, at CDF 2,104.3 billion, was 33.3 per cent of its annual line.

How the customs target was set

The forecast asks customs for half as much again as it collected in 2021, and import volumes are not obliging.

Customs collected CDF 3,033.5 billion in 2021. The 2022 forecast is CDF 4,565.9 billion, an increase of 50.5 per cent. The tax directorate’s forecast rises 14.1 per cent on its 2021 result, DGRAD’s 35.5 per cent and the oil line’s 6.2 per cent. Customs is the line carrying the most ambition, and it is the line most dependent on the dollar value of imports and the volume that clears the ports.

The franc has been stable, so exchange-rate depreciation has not inflated the franc value of dutiable goods the way it did in earlier years. Without that help, a target 50 per cent above last year’s outturn needs real growth in imports or sharper valuation. The DGDA is at 22.5 per cent after more than 30 per cent of the year, which is a shortfall of about CDF 375 billion at the linear pace.

The oil line and the non-mining base

Brent at US$107 lifted oil revenue, which is the one line of the state’s income that tracks a price rather than an import volume.

Oil revenue at 40.4 per cent of target follows a price, not activity. The BCC’s commodity table shows Brent at US$107.01 a barrel on 21 April, against US$78.36 at the end of December. The BCC also tracks regulated pump prices in its petroleum products series, the place where the pass-through to households and transporters would appear.

The Monetary Policy Committee, in the summary DeskEco published on 4 April, kept its 2022 growth projection at 6.4 per cent and noted that the budget was being executed without central-bank financing. The digest’s table supports the second point, since the Treasury was repaying bills: CDF 345.7 billion of Treasury bills and bonds were reimbursed in the year to 22 April.

A caution on the capital line

The expense table’s capital and running-cost lines should not be read at face value.

The table shows running costs at CDF 2,107.3 billion, 189 per cent of the full-year forecast, and capital spending at CDF 599.9 billion, 8.3 per cent. The same two lines for 2021 read 376 per cent and 0.2 per cent. A pattern that extreme points to classification, with capital items booked under running costs, rather than to an investment freeze. The table therefore cannot say how much the state invested, and an analyst should not build an infrastructure thesis on it.

What a business should do with the table

Expect customs to press harder on valuation, and keep state receivables short.

An agency that is eight points behind a target set 50 per cent above its last result usually tightens clearance checks and valuation. Importers should expect more physical inspection, document requests and reassessments through the second quarter, and should budget for clearance delay at the ports. A supplier to the state should invoice promptly, because a Treasury repaying bills and short of customs income will pay its creditors in order of its own priorities.