Journal of Economics & Management Research

The DRC current account balance is characterized by a structural deficit in spite of the long cycle of economic growth, driven by the large influx of Foreign Direct Investment (FDI). With the ARDL model, in the context of a BOP intertemporal approach, this research shows that the economic growth rate and FDI are the main variables that explain the current account in the short and long terms. Moreover, periods of significant influx of FDI are accompanied by a deterioration of the current account. That fact is explained by a significant connection between the growth of private income and taxes, induced by capital inflows, and the growth of imports of goods and services because of less competitiveness of local product. The coming back on a sustainable path of BOP, the DRC government should attack structural weaknesses of Congolese economy. This action should be realized by implementing credible strategies of industrial, infrastructural and educational development. Those strategies will increase improve productivity and competitiveness of goods and services oriented to local market. They will also reduce progressively the inertial vulnerabilities that block the sustainability path.