In 2025, the Democratic Republic of the Congo (DRC) faces a troubling paradox: while tax revenue collection is improving, the budget deficit continues to deepen as state commitments grow at an even faster pace. This imbalance, now a structural issue, forces Kinshasa to juggle competing priorities—boosting economic activity, maintaining internal security, and upholding macroeconomic agreements with international partners.
Tax mobilization rises but faces constraints
The DRC’s financial authorities, including the General Tax Directorate (DGI), General Directorate of Customs and Excise (DGDA), and General Directorate of Administrative, Judicial, and Domain Revenue (DGRAD), have recorded steady gains in revenue collection. This progress stems from an expanded tax base, partial digitalization of procedures, and stricter enforcement against informal trade—particularly in the mineral-rich regions of Katanga and Kivu.
The global market has also played a key role. Rising prices for copper and cobalt, of which the DRC remains a top global supplier, have bolstered revenue from extractive industries. However, this income—partially captured through the 2018 mining royalty—remains vulnerable to price swings and growing competition from alternative battery materials.
Public spending driven by security and salaries
On the expenditure side, the situation is far more strained. The ongoing conflict in the country’s east, where the Armed Forces of the DRC (FARDC) are battling armed groups and the M23 insurgency in North Kivu, demands substantial resources. This burden is compounded by the prolonged state of emergency, repeatedly extended since 2021, which has inflated security-related spending beyond initial budget forecasts.
Wage bills represent another major challenge. Salary increases for teachers, judges, and certain civil service sectors—alongside new hires in defense and healthcare—have driven up personnel costs beyond sustainable levels. Every social demand-driven agreement further exacerbates this trend, leaving budget officials struggling to curb the overspending. Additionally, emergency spending tied to recurring floods and mass displacements in the east has added to the fiscal strain.
Subsidies and transfers, particularly those aimed at stabilizing fuel prices, are also draining resources. Meanwhile, public investments—supposedly safeguarded under the country’s program law—are being deprioritized in favor of rigid, non-discretionary current expenditures.
Rising deficit raises questions about fiscal sustainability
The widening gap between revenue growth and soaring expenditures has led to increased reliance on monetary financing and domestic bond issuance. This approach, already flagged in International Monetary Fund (IMF) reviews under the Extended Credit Facility program, has pushed domestic interest rates higher and put pressure on the Congolese franc. In response, the Central Bank of Congo (BCC) has tightened monetary policy to stabilize the currency.
Another consequence is the accumulation of unpaid government bills, straining the cash flow of state suppliers and undermining the viability of local small and medium-sized enterprises (SMEs). Several construction and service firms have reported payment delays that threaten their operations, fostering mistrust in public procurement.
Over the coming months, the Congolese government must demonstrate its ability to streamline tax exemptions, accelerate electronic invoicing, and curb unsustainable wage growth without reigniting social unrest. The credibility of the macroeconomic framework agreed with international lenders, particularly the IMF and World Bank, will hinge on the government’s actions in the second half of the year. The gap between revenue inflows and expenditure outflows continues to widen, making fiscal stabilization an increasingly urgent challenge.
