Current account sustainability in the Democratic Republic of Congo: structural imbalances, external vulnerability, and policy adjustment mechanisms

Jonathan Muya

MPRA Paper from University Library of Munich, Germany

Abstract: This paper provides a comprehensive analysis of current account sustainability in the Democratic Republic of Congo (DRC), focusing on the structural determinants of persistent external imbalances and the policy mechanisms required for sustainable adjustment. Drawing on both theoretical and empirical frameworks, the study demonstrates that the DRC’s current account deficit is predominantly structural, rooted in weak economic diversification, chronic service deficits, and significant primary income outflows linked to foreign-owned extractive industries. Using a mixed methodological approach, including descriptive analysis and econometric modeling, the findings reveal that external imbalances are closely tied to domestic structural constraints and limited absorptive capacity. The paper argues that sustainable adjustment requires not only macroeconomic stabilization but also deep structural transformation, including industrial diversification, financial development, and improved allocation of foreign direct investment (FDI). The study contributes to the broader literature on current account sustainability in resource-dependent economies and offers policy recommendations tailored to the Congolese context.

Keywords: Current Account Sustainability; External Imbalances; Structural Deficit; Economic Diversification; Absorptive Capacity; Foreign Direct Investment (FDI); Resource-Dependent Economies; Balance of Payments Adjustment; Financial Development; Democratic Republic of Congo (search for similar items in EconPapers)
JEL-codes: F33 F41 F43 O11 O16 O55 Q33 (search for similar items in EconPapers)
Date: 2026-05-08, Revised 2026-05-12
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Published in International Journal of Innovative Science and Research Technology 5.11(2026): pp. 1080-1086

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:129368

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