The International Monetary Fund (IMF) says it has achieved a staff-level agreement with the Democratic Republic of Congo (DRC) over the final assessment of a $1.5 billion loan program.
The fund however emphasized the importance of the DRC effectively handling the funds obtained from a modified mining agreement. This brings Congo closer to successfully fulfilling an IMF program for the first time. Prior agreements have been disrupted due to concerns regarding the absence of openness and clarity in its extensive mining industry.
“Performance under the (three-year) program has been generally positive, with most quantitative objectives met and key reforms implemented, albeit at a slow pace,” the Fund said in a statement.
Upon receiving approval from the IMF board, the accord will enable the release of a final instalment of approximately $200 million. The IMF has highlighted the need for the world’s leading cobalt provider, which is also the third-largest copper producer, to include the beneficial effects of the recently modified Sicomines joint venture with Chinese businesses in its updated budget law for 2024.
“In addition, mechanisms will need to be put in place or reinforced to ensure the proper use and governance of these funds,” the Fund said.
President Felix Tshisekedi advocated for revising the 2008 infrastructure agreement with Sinohydro Corp and China Railway Group, aiming to enhance the advantages for Congo. A contract was executed in March.
“The IMF is concerned about the mechanisms for using this money and has asked for it to be paid into the public treasury accounts rather than being managed by an agency as has been done in the past,” a finance ministry official, who requested anonymity, told Reuters.
As part of the IMF program, Congo was required to disclose mining contracts. Last week, Congo finally revealed the updated terms of the Sicomines agreement, which state that the Chinese side will invest approximately $7 billion in infrastructure, contingent upon high copper prices.
According to a 2023 report by Congo’s national auditor, just $822 million out of the projected $3 billion for infrastructure investments was distributed under the earlier version of the agreement.
The amended agreement still contains provisions that Congolese and international civil society organizations perceive as unfavourable to Congo. One of the benefits that Sicomines enjoys is the exemption from tax payments until the year 2040.
