By Joe Bavier
KINSHASA, Sept 15 (Reuters) - Democratic Republic of Congo expects a recovery in the mining sector to contribute to a doubling of economic growth next year, while tax reforms should help public finances, Budget Minister Michel Lokola said on Tuesday.
The comments, posted on a ministry website and supplemented by a Reuters interview, give one of the most optimistic outlooks yet of a Congolese economy that was among the hardest hit by the world slowdown.
"The GDP should grow by 5.4 percent," Lokola said in a statement posted on the ministry's website. After hitting 6.2 percent in 2008, growth this year is forecast at just 2.7 percent as the global slowdown hits mining and oil revenues.
Profits from the two sectors traditionally make up around 70 percent of Congo's foreign currency revenues. But demand fell as the global recession hit the emerging economies of Asia, the main market for Congolese minerals.
Major mining projects, spurred on by a wave of investment that followed successful 2006 elections, were either suspended or shut down completely, leaving hundreds of thousands of Congolese miners out of work.
However, the sector has recently shown signs of recovery. Prices for copper and cobalt, which form the backbone of Congolese mining, are slowly rising.
Earlier this year, U.S.-based Freeport McMoRan's Tenke Fungurume project, widely considered to be the largest and highest-grade undeveloped copper and cobalt project in the world, entered into production. The mine is due to ramp up production in 2010.
"Notably due to the progressive recovery in international demand and domestic activity, principally in the mining sector, the economic growth perspectives for 2010 should improve," Lokola said.
Reforms aimed at bringing order to the country's chaotic tax system while tapping into long ignored but potentially lucrative sources of income are due to continue.
"The 2009 budget was hit by the crisis. There was a recession. We are starting to come out of the red zone. But we must remain prudent," Lokola said in a separate phone interview.
Planned reforms include a reinforcement of the national customs agency and the possible cancelation of some exonerations on the payment of customs duties.
The government will push for the enforcement of income and professional tax laws and the streamlining of tax collection.
And authorities hope to expand the tax base in the telecommunications, oil, and property sectors as well as putting in place stricter controls on mining exports.
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