Bussines in Congo
Following a 1.2 per cent decrease in GDP in 2007, real GDP grew by 7 per cent in 2008. The oil sector strengthened its dominance of the economy,
increasing its contribution to nominal GDP to 67.3 per cent. Technical problems encountered by Total when opening the Moho-Bilondo oilfield and a
reduction in the performance of the Pointe-Noire Grands-Fonds and Kitina fields resulted in oil production in 2008 that was below the levels forecast.
Nevertheless, oil production rose to 87.5 million barrels in 2008, from 81.7 million barrels in 2007. More sustained activity is expected in 2009,
thanks to the use of better technology in the Moho-Bilondo oilfield and a return to liquid petroleum gas production. In 2008, most oil and gas
exports went to China (38.6 per cent), Chinese Taipei (10 per cent) and the United States (20.6 per cent).
There remains concern regarding the production and distribution of water and electricity. In the two main cities in particular, there are frequent
cuts in water supplies and rolling blackouts. In 2008, value added decreased by 2.9 per cent compared to 2007. The level of access to drinking water
is 75 per cent in urban areas and 10 per cent in rural areas. The water treatment and distribution equipment dates from the 1980s, and is obsolete.
Although boreholes have been trailed, the equipment no longer meets the needs of the urban population, which has more than doubled in size over
the past 20 years. Nevertheless, various projects to rehabilitate and expand the facilities have been planned by the government, and feasibility
studies have already been carried out.
The construction sector saw a further increase in growth, from 6.4 per cent in 2007 to 7.8 per cent in 2008. This additional growth was the result
of major public works: Maya-Maya International Airport in Brazzaville was rehabilitated, with a new, ultra-modern terminal building and two runways
and a total cost of XAF 120 billion (CFA Franc BEAC); the 173-kilometre stretch of national route No. 1 between Dolisie and Pointe-Noire, across
the hilly Mayombe region, was asphalted by a Chinese firm; another Chinese company continued work on building the Imboulou hydroelectric power
station in northern Congo, which could become operational in the second half of 2009, with a capacity of 120 MW; rural tracks were rehabilitated
and basic infrastructure was built in Brazzaville as part of the "accelerated municipalisation" operation. Despite this progress, for the past
three years work carried out has been faced with two major problems: i) the high cost of building material, especially cement, of which resources
are considered insufficient to meet current needs; ii) the difficulties encountered in transporting building material by railway. The government
has therefore contracted the South Korean company Conko Cement Co. Ltd to build a cement factory with a capacity for 500 000 tonnes in Madingou,
in southern Congo, 200 kilometres from Brazzaville.
Growth in demand accelerated in 2008, thanks mainly to growth in exports. These exports along with the opening of the Moho-Bilondo oilfields and the
dispatch of eucalyptus wood chips contributed 8.3 percentage points to GDP growth in 2008. Final consumption made a negative contribution to GDP
growth (-1.2 points), since public consumption fell (-7 per cent) and private consumption was virtually stagnant (0.4 per cent).
Investment grew by an estimated 5.8 per cent, a 26.2 per cent slowdown from 2007, largely due to the decline in private investment,
particularly from oil firms. The contribution made by investment to growth in 2008 was thus limited to 1.6 percentage points.
The outlook for non-oil investment in 2009 is good: the Eni subsidiary ETDC will rehabilitate the high-voltage power cables
between Brazzaville and Pointe-Noire at a cost of USD 250 million (US dollars), and work will begin on the 300 MW gas-fired
power station, which will cost USD 400 million.
How's the business in Congo?
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