2017 Index of Economic Freedom

Republic of Congo

overall score40.0
world rank177
Rule of Law

Property Rights34.8

Government Integrity30.5

Judicial Effectiveness22.6

Government Size

Government Spending36.2

Tax Burden66.8

Fiscal Health11.6

Regulatory Efficiency

Business Freedom32.1

Labor Freedom37.5

Monetary Freedom76.1

Open Markets

Trade Freedom52.2

Investment Freedom50.0

Financial Freedom30.0

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Quick Facts
  • Population:
    • 4.4 million
  • GDP (PPP):
    • $29.4 billion
    • 2.5% growth
    • 4.0% 5-year compound annual growth
    • $6,722 per capita
  • Unemployment:
    • 7.2%
  • Inflation (CPI):
    • 2.0%
  • FDI Inflow:
    • $1.5 billion
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Repressive governance continues to deprive the Congolese people of economic freedom. Despite extensive state controls from the period of state socialism, the government cannot provide basic public goods and infrastructure. Public-sector inefficiency has pushed many people into the informal economy, which accounts for most of the Republic of Congo’s limited private-sector growth.

The lack of meaningful progress on reform has left the institutional capacity inadequate for modern economic activity. Many aspects of doing business, from obtaining licenses to attracting foreign investment, are subject to intrusive and inefficient regulations. The weak judiciary undermines the protection of property rights, fueling corruption.

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Background

The Republic of Congo became independent from France in 1960. Denis Sassou-Nguesso seized power in 1979 and governed the country as a Marxist–Leninist state before allowing a multi-party election in 1992. He lost that election to Pascal Lissouba, seized power again following a 1997 civil war, and then won flawed elections in 2002, 2009, and 2016. In 2015, the country held a referendum that modified the constitutional limits on a president’s age and the number of terms he could serve, allowing Sassou-Nguesso to run again. Congo is one of sub-Saharan Africa’s largest oil producers, but lack of infrastructure prevents exploitation of its natural gas reserves and hydropower potential.

Rule of LawView Methodology

Property Rights 34.8 Create a Graph using this measurement

Government Integrity 30.5 Create a Graph using this measurement

Judicial Effectiveness 22.6 Create a Graph using this measurement

Contract terms are not transparent, and “informal” tax collectors regularly solicit bribes. The judiciary is underfunded and crippled by institutional weakness and a lack of technical capability. Corruption remains pervasive in Congo. The state oil company is directly controlled by the president’s family and advisers. In late 2015, because of suspected ill-gotten wealth, French judges ordered the seizure of properties tied to the president’s family.

Government SizeView Methodology

The top individual income tax rate is 45 percent, and the top corporate tax rate is 34 percent. Other taxes include a value-added tax and a tax on rental values. The overall tax burden equals 11.7 percent of total domestic income. Government spending has amounted to 46.1 percent of total output (GDP) over the past three years, and budget deficits have averaged 7.1 percent of GDP. Public debt is equivalent to 64.9 percent of GDP.

Regulatory EfficiencyView Methodology

The regulatory environment continues to be characterized by bureaucracy and a lack of transparency. Existing regulations are not enforced effectively. A modern labor market has not been developed, and the public sector remains the largest source of formal employment. In advance of the March 2016 presidential election, the government rejected IMF recommendations that it reduce spending on energy subsidies.

Open MarketsView Methodology

Trade is extremely important to the Republic of Congo’s economy; the value of exports and imports taken together equals 166 percent of GDP. The average applied tariff rate is 16.4 percent. In general, the government does not screen or discriminate against foreign investment. The underdeveloped financial sector remains hampered by state interference. Bank development has been stunted by poor management and nonperforming loans.

Country's Score Over Time

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Regional Ranking

rank country overall change
1Mauritius74.70.0
2Botswana70.1-1.0
3Rwanda67.64.5
4Côte d'Ivoire 633.0
5Namibia62.50.6
6South Africa62.30.4
7Seychelles61.8-0.4
8Swaziland61.11.4
9Uganda60.91.6
10Burkina Faso59.60.5
11Benin59.2-0.1
12Mali58.62.1
13Gabon58.6-0.4
14Tanzania58.60.1
15Madagascar57.4-3.7
16Nigeria57.1-0.4
17Cabo Verde56.9-9.6
18Democratic Republic of Congo56.410.0
19Ghana56.2-6.8
20Guinea-Bissau56.14.3
21Senegal55.9-2.2
22Comoros55.83.4
23Zambia55.8-3.0
24São Tomé and Príncipe 55.4-1.3
25Mauritania54.4-0.4
26Lesotho53.93.3
27Kenya53.5-4.0
28The Gambia53.4-3.7
29Togo53.2-0.4
30Burundi53.2-0.7
31Ethiopia52.71.2
32Sierra Leone52.60.3
33Malawi52.20.4
34Cameroon51.8-2.4
35Central African Republic51.86.6
36Niger50.8-3.5
37Mozambique 49.9-3.3
38Liberia49.1-3.1
39Chad492.7
40Sudan48.8N/A
41Angola48.5-0.4
42Guinea47.6-5.7
43Djibouti46.7-9.3
44Equatorial Guinea451.3
45Zimbabwe445.8
46Eritrea42.2-0.5
47Republic of Congo 40-2.8
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