The Central Bank of the Congo said individuals and
businesses will no longer be allowed to make or receive payments in US dollars or
other foreign currencies in cash. Commercial banks will also be prohibited
from physically importing foreign banknotes.
Foreign currency transactions will only be permitted
electronically through the banking system, a move authorities say will improve
oversight of money flows.
Governor Andre Wameso said “From April 9, 2027, no
person will be authorised to carry out cash transactions in foreign currencies.”
A high-stakes gamble against entrenched dollarisation
The decision targets a deeply entrenched system. Decades of
instability and hyperinflation in the 1990s, when inflation surged to around
2,000 per cent, pushed Congolese households and businesses towards the dollar
as a store of value.
Today, the economy remains heavily dollarised, with most
transactions above $5 conducted in US currency.
The Congolese franc trades at roughly 2,300 per dollar,
compared with about 920 in 2010, reflecting long-term depreciation and weak
public confidence.
Previous attempts to reverse this trend have struggled. A
2024 directive forcing electronic payment terminals to accept only francs had
limited impact, as dollar cash continued to dominate informal and retail
markets.
By targeting physical dollar circulation, the new policy
goes further than earlier reforms, but also raises enforcement risks in a
largely cash-based economy.
Congolese franc notes, as authorities attempt to rebuild
trust in the local currency.
Tied to global financial pressure
The move is not only about currency control. It is also
linked to efforts to exit the Financial Action Task Force grey list, where the
country remains due to gaps in anti-money laundering and counter-terrorism
financing systems.
Recent reforms, including stricter laws adopted in 2022 and
expanded in 2025, have tightened reporting requirements for banks and
businesses.
The financial intelligence unit, CENAREF, has also been
given stronger powers to track suspicious transactions.
By forcing foreign currency use into traceable banking
channels, authorities are trying to close loopholes in cash-based transactions
that are harder to monitor.
Stability improving, but vulnerabilities remain
The policy comes at a time when macroeconomic conditions
have improved, giving policymakers room to act.
Economic growth is projected at 6.2 per cent in 2026,
supported by mining and steady non-extractive sector activity.
The country remains central to global supply chains for
critical minerals such as cobalt, a key input in electric vehicle batteries,
attracting sustained interest from the US, China and Europe.
Inflation has dropped sharply to 2.2 per cent year-on-year
as of March 2026, from over 10 per cent a year earlier, prompting the central
bank to cut its benchmark interest rate to 13.5 per cent.
However, currency pressures persist. The franc has weakened
on the official market this year, and the gap between official and parallel
exchange rates highlights lingering structural imbalances.
Regional and global relevance
The Democratic Republic of Congo’s move mirrors a broader
trend across Africa, where governments facing currency volatility, including
Nigeria, Ghana and Angola, have intermittently tightened controls on foreign
currency use.
But Congo’s case stands out for its scale and difficulty.
With over 100 million people and one of the world’s largest informal sectors,
enforcing a cash ban on dollars will test both state capacity and public trust.
If successful, the policy could strengthen monetary
sovereignty. If not, it risks pushing even more activity into the informal
economy, the very outcome authorities are trying to avoid. – Business Insider
Africa