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Uncertainty and Investment Behaviour in the Democratic Republic of Congo

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  • Ndiwulu, Xavier Bitemo

    (African Economic Research Consortium)

Abstract

The aim of this study was to assess the impact of uncertainty on private investment in the Democratic Republic of Congo (DRC). We conducted an econometric analysis based on a flexible accelerator model of investment spending. The results showed that both macroeconomic uncertainty, as measured by the conditional variance of inflation, and political uncertainty had a negative impact on investment rates. The two main policy implications of these results are: First, stabilization policies, and especially their credibility, are essential to promote private investment in DRC; and second, the government should adopt policies which help to reduce the risk of reverting to conflict.

Suggested Citation

  • Ndiwulu, Xavier Bitemo, 2011. "Uncertainty and Investment Behaviour in the Democratic Republic of Congo," Working Papers 9577f518aa89, African Economic Research Consortium, Research Department.
    • Handle: RePEc:aer:wpaper:9577f518aa89
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