IMF agrees lending program with DR Congo

KINSHASA (Reuters) - The International Monetary Fund and Democratic Republic of Congo’s government agreed on Friday to a financial assistance package that would allow the IMF to resume lending to Congo for the first time since 2012, the two sides said.

The International Monetary Fund (IMF) logo is seen outside its headquarters building in Washington, U.S.,September 4, 2018. REUTERS/Yuri Gripas//File Photo

The IMF suspended its last aid to Congo - a loan program worth more than $500 million - after the government failed to provide sufficient details on the sale of state mining assets to an offshore company.

President Felix Tshisekedi took office in January and has tried to repair relations with foreign donors that had frayed during his predecessor Joseph Kabila’s 18 years in power.

IMF delegation leader Mauricio Villafuerte told reporters in the capital Kinshasa that the terms of the Rapid Credit Facility would be submitted to the IMF board in mid-December for final approval.

“The economic situation (in Congo) is very difficult now because of weakness controlling spending during the political transition and new spending initiatives,” Villafuerte said.

Villafuerte said that, as part of the deal, Congolese authorities agreed to policies to reinforce macroeconomic stability and address the country’s challenging business climate.

The office of Congo’s prime minister confirmed that a deal had been reached.

It was not immediately clear how much the program, which lasts through May 2020, would be worth or whether it included the kind of far-reaching transparency reforms, including opening up the books of state mining company Gecamines, that watchdog groups have urged.

Congo’s central bank governor said last week that he expected the program to be worth about $370 million.

Congo is Africa’s top copper producer and the world’s leading miner of cobalt, a key component in electric car batteries. But it is one of the world’s least developed countries, due largely to corruption and poor governance.

Villafuerte said the IMF expected Congo’s economy to grow by 4.5% in 2019, up from a previous estimate of 4.3%, but growth would slow to 3.2% in 2020 due to a slowdown in mining production.

Reporting by Stanis Bujakera; Additional reporting and writing by Aaron Ross; Editing by Kevin Liffey and Giles Elgood