DRC’s public spending outpaces revenue growth in 2025

In 2025, the Democratic Republic of the Congo (DRC) faces a troubling fiscal paradox: despite steady gains in tax collection, rising government expenditures are widening the budget deficit. This structural imbalance forces policymakers in Kinshasa to juggle competing priorities—stimulating economic activity, maintaining internal security, and meeting macroeconomic commitments made to international partners.

Tax mobilization improves amid persistent challenges

The DRC’s revenue agencies—the General Tax Directorate (DGI), the General Directorate of Customs and Excise (DGDA), and the General Directorate of Administrative, Judicial, and Domain Revenue (DGRAD)—have reported improved performance this year. This uptick stems from a broader tax base, partial digitalization of processes, and stricter enforcement against informal export networks, particularly in the mining regions of Katanga and Kivu.

Global market dynamics have also played a key role. Sustained high prices for copper and cobalt, of which the DRC is a leading global supplier, have bolstered revenue from extractive industries. However, earnings from the 2018 mining code—including royalties—remain vulnerable to price volatility and growing competition from alternative battery materials.

Security and wages drive unsustainable spending surge

On the expenditure side, pressures are intensifying. Military operations in the eastern DRC, where the Armed Forces of the DRC (FARDC) confront armed groups and the M23 insurgency in North Kivu, demand significant resources. These costs are compounded by the ongoing state of emergency, repeatedly extended since 2021, which has swollen the security budget far beyond initial forecasts.

Public sector wages represent another major strain. Pay hikes for teachers, judges, and other civil servants—alongside new hires in defense and healthcare—have pushed compensation costs upward. Each negotiated wage increase, often driven by social unrest, further strains the budget. Emergency spending tied to recurring floods and mass displacement in the east has only added to the fiscal burden.

Subsidies, particularly those supporting fuel prices, also weigh heavily on the primary balance. Meanwhile, public investment—supposedly safeguarded under the country’s development program—has been repeatedly scaled back to prioritize essential recurrent spending.

Budget deficit raises sustainability concerns

The widening gap between revenue growth and expenditure has led to increased reliance on monetary financing and domestic bond issuance. This approach, flagged by the International Monetary Fund (IMF) in its reviews of the Extended Credit Facility program, has pushed domestic interest rates higher and fueled pressure on the Congolese franc. The Central Bank of the Congo (BCC) has responded by tightening monetary policy to stabilize the currency.

Another consequence is the accumulation of unpaid government bills, which strains the cash flow of local suppliers and undermines the sustainability of small and medium-sized enterprises. Construction and service firms report delayed payments that threaten their operations and erode confidence in public procurement.

To stabilize the situation, the government must act swiftly: rationalizing tax exemptions, accelerating the rollout of electronic invoicing, and curbing wage growth without provoking social unrest. The credibility of the macroeconomic framework agreed upon with international lenders—including the IMF and World Bank—hinges on the government’s ability to rein in spending in the second half of the year.