Congo’s economy consists mainly of village agriculture, an urban informal sector or “grey economy” (i.e. unregulated business, commercial, and service activities), and an industrial sector dominated by oil and oil-related services with few linkages to the rest of the economy. Since the 1980s, the oil industry has provided the major share of government revenues and exports, replacing timber production and exports as the principle growth sector. Oil accounts for about 67% of Congo’s real gross domestic product (GDP)-about 78% of the government budget-and about 95% of Congo’s export earnings.
In spite of its oil wealth, Congo has experienced budgetary shortfalls as a result of public sector expenditures, slumps in world oil prices (1998-1999), and armed conflicts (1997, 1998-1999, and 2002). Congo’s business and administrative infrastructure was badly damaged during the recurrent fighting, increasing the petroleum sector’s dominance of the economy (since oil production was not directly harmed by the fighting). Rebel attacks and subsequent shut-downs along the CFCO railway, which runs from the port of Pointe Noire to the capital Brazzaville and the interior, severely curtailed the movement of goods and people. Economic activity was further hampered by the fact that over 800,000 Congolese, nearly 30% of the population, fled their homes during the conflicts.
The Congo is the fifth largest oil producer in sub-Saharan Africa. Oil accounts for a large portion of Congo’s GDP and the majority of the country’s exports. Current proven reserves are estimated to be 1,291 million tonnes of crude and large reserves of associated natural gas exist. Congo is one of the West African countries where Energy Africa is active.
The downstream oil industry is also an important element in the country’s economy. The oil industry is predominantly run by foreign companies and is centred on the coastal city of Pointe Noire where the Congolaise de Raffinage (Coraf) operates the 21,000 bpd Pointe Noire refinery. The refinery has been out of commission for four years and has only recently started operating again.
The labour situation in the Congo is sensitive and investors should consider this. Obligations on employers are considered onerous and political restructuring is largely dictated by organised labour. Despite the potential barriers to investment in the Congolese oil industry, however, the sector is experiencing a period of growth.
Africa Oil & Gas Corporation, Afrimel Italgru, Cameron France S.A.S, Engen Congo, Enterprise Petroliere du Congo, Ministere des Hydocarbures et des Mines Service des mines et da la Geologie, Oil Tools Services Ltd, SDV Oilfield Congo, Societé Nationale de Recherches et d’Exploitation Petroliere, Société Nationale des Pétroles du Congo, Zetah M&P; Congo SARL :[ Add More ]
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