The Democratic Republic of Congo’s new central bank governor has set out to rebuild confidence in the Congolese franc and curb the nation’s heavy dependence on the US dollar.
- The new governor of Congo’s central bank aims to restore trust in the Congolese franc and decrease reliance on the US dollar.
- The Congolese franc faces challenges, including memories of hyperinflation and current instability.
- Confidence-building measures involve promoting franc-denominated securities and reforming housing and social systems.
- Currently, the Congolese economy is heavily dollarized, with the US dollar dominating everyday and export transactions.
The Democratic Republic of Congo’s new central bank governor has set out to rebuild confidence in the Congolese franc and curb the nation’s heavy dependence on the US dollar, which accounts for nearly 90% of local transactions.
The economy is heavily dollarized, with commodity exports and everyday transactions dominantly using the US dollar.
Andre Wameso faces a daunting challenge: many Congolese still recall the hyperinflation of the 1990s, while the franc remains highly unstable and is now trading near record lows against the dollar, according to a Bloomberg report.
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Congo earns almost all its export revenue in dollars from copper, cobalt, oil, and gold sales, and the greenback dominates daily life, from rent and restaurant bills to airport fees.
Even government wages paid in francs are often swiftly converted into dollars for security.
“If the economy is so dollarized, it’s because we import almost everything we consume. We need the population to trust its money again, because I don’t think we can build a new Congo with a currency other than the national currency.” Wameso told Bloomberg.
Congo’s banking sector has long been constrained by concerns over money laundering and conflict financing. Even dollar transactions within the country are routed through correspondent banks abroad, often taking days to clear.
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To address this, Wameso says he will collaborate with the US Treasury to establish a clearing house at the central bank, a move aimed at accelerating domestic transactions and easing reliance on foreign intermediaries.
Building a future for the Franc
Reinstating confidence in the franc, Wameso says, will require a broader economic shift.
That includes overhauling the social security system and reforming the housing market to ensure construction materials are purchased in francs and that mortgages and financing are eventually issued in the local currency.
He also backs the rollout of franc-denominated securities, both to build a long-term yield curve and to encourage individuals to view the national currency as a viable investment.
