Congo faces rising military costs, tax shortfall in revised 'combat budget'

Yahoo

6 days ago

By Sonia Rolley
(Reuters) - Congo is grappling with soaring military costs and declining tax revenues due to an offensive by Rwandan-backed rebels, who now occupy much of the country's eastern borderlands, a revised wartime budget under consideration by lawmakers showed.
The International Monetary Fund said this month that the fighting was straining public finances, citing the closure of revenue collection offices in areas controlled by the M23 rebels and elevated security spending linked to the conflict.
Initially expected in mid-March, President Felix Tshisekedi's cabinet approved the budget bill on Friday. It now goes to parliament for debate and voting.
It includes slightly decreased spending of $17.2 billion, according to the minutes of the cabinet meeting, and reflects a drop in tax revenue to 12.5% of GDP from 15.1% expected under the original budget approved in December.
The finance ministry announced in March it was doubling salaries for soldiers and police in an apparent bid to boost morale. That move is expected to cost $500 million this year, a military official and a government source told Reuters.
Exceptional security-related expenditures cost the government estimated $1 billion in the first four months of 2025, two government sources said.
All of the sources spoke on condition of anonymity because they were not authorised to disclose the figures.
A government spokesperson did not immediately respond on Tuesday to questions about the budget and military spending.
The domestic budget deficit widened to 0.8% of GDP in 2024 and is projected to reach 1.2% this year, Rene Tapsoba, the IMF's resident representative for Congo told Reuters.
The conflict and loss of control of territory in the east, which is home to lucrative gold, tin and coltan reserves, could account for a 4% shortfall in expected tax revenue, he said.
While noting that exceptional security expenditure was "very high", Tapsoba said the government had sought to reduce its operating expenditures by cutting the budgets of ministries and the salaries of the heads of institutions.
Despite ramped-up security spending, army officials still report persistent shortages of food, ammunition and basic equipment.
Much of the funding appears to have gone to arms procurement, one Congolese general told Reuters.
"The bulk of these funds are handled outside the formal budget framework," a senior official at the finance ministry said, asking not to be named as he was not authorised to speak to media. "We don't have full visibility either."
The war in the east has spotlighted entrenched problems in the military.
According to a Senate report this month, the army counts 268,602 personnel, including 74,000 deployed in combat zones. More than 36,000, however, are classified as inactive - among them, 3,618 retired soldiers awaiting $145 million in unpaid benefits.
The United Nations and Western governments say Rwanda has provided arms and troops to M23. Rwanda denies backing the rebels and says its military has acted in self-defence against Congo's army and a militia founded by perpetrators of Rwanda's 1994 genocide.
(Additional reporting by Ange Adihe Kasongo in Kinshasa; Editing by Robbie Corey-Boulet and Joe Bavier)