* IMF worried China deal will burden Congo with debt
* Congo says needs external funds for infrastructure
* Congo’s mineral export values falling in global crisis
By Joe Bavier
KINSHASA, March 23 (Reuters) - Democratic Republic of Congo will push ahead with a $9 billion Chinese mining and infrastructure package despite pressure from the International Monetary Fund (IMF) which believes the deal will add to Congo’s debt mountain, a top government official said on Monday.
Under the 2007 agreement, Congo will receive much-needed roads, railways, hospitals and schools while China secures billions of dollars worth of lucrative copper and cobalt reserves it needs to feed its export-driven economy.
“No, we will not revisit this contract,” said Moise Ekanga, head of President Joseph Kabila’s office for the contract.
Speaking to Congo’s United Nations-backed Radio Okapi on Monday, Brian Ames, division chief in the IMF’s African Department, said the lending body was worried the deal will only add to Congo’s external debt of more than $10 billion.
“There are some aspects of the loan that perhaps have implications for the ability to support the debt,” Ames said.
The IMF suspended its programmes in Congo in 2006, during a three-year transitional administration heavily criticised for fiscal mismanagement and corruption.
Congo is pushing for IMF activities to be relaunched and is also angling for at least partial forgiveness of its debt.
The fund has indicated that possible changes to the Chinese deal will be a condition for any partnership or debt relief.
Both Chinese and Congolese officials reject the idea that the contract risks plunging the mineral-rich but cash-strapped former Belgian colony deeper into debt.
“That is the IMF’s version. The Congolese government is making sacrifices to benefit from debt relief, but it is also in need of renewed infrastructure,” Ekanga said.
Negotiations on an initial $6 billion worth of public works and mining infrastructure projects have already been finalised, he said. Congo is still discussing the terms of the remaining $3 billion investment, which Ekanga said will likely not be required before the funds included in the current deal are exhausted in four or five years.
The pressure from the IMF comes as Congo is becoming increasingly dependent upon foreign donors and lenders to help save its economy, which is struggling as a result of a worldwide drop in demand for its mineral exports.
In December, the IMF lowered its projection for direct foreign investment in Congo in 2009, most of which had targeted mining, by over two-thirds to $800 million. And foreign reserves that stood at over $225 million last April have evaporated.
Earlier this month, the IMF’s executive board approved $195.5 million for Congo from its Exogenous Shocks Facility, designed to speed financing to countries hurt by the slump.
The World Bank has promised $100 million in grants to pay teachers’ salaries, electricity and water bills. The European Union and African Development Bank are expected to offer additional emergency funding.
Some 5.4 million people were killed in Congo in a 1998-2003 war and the humanitarian crisis that followed. Most died from hunger and disease.
Editing by Daniel Magnowski and Mark Trevelyan