Congo To Receive $12 Billion In Debt Relief

Comments:  | Leave A Comment

congo

JOHANNESBURG — The International Monetary Fund and the World Bank have set the stage to relieve Congo of a massive $12.3 billion in debt, most of it dating back more than 20 years to loans made to the corrupt regime of dictator Mobutu Sese Seko.

The decision comes despite opposition from Canada, which abstained from voting over Congo’s expropriation of Canadian company First Quantum’s rights to one of the world’s largest copper mines.

Check out our gallery of this week’s hottest news photos:

The Canadian company has taken its case to the International Court of Arbitration in Paris, and Canada’s objections had for months delayed announcement of the debt relief.

But the World Bank and IMF announced Thursday — the day after Congo marked 50 years of independence from Belgium — that they will support $11.1 billion in relief under the program for heavily indebted poor countries and $1.2 billion under a multilateral debt relief initiative.

The debt relief comes as conflict persists in Congo’s east, where most of the country’s mineral riches reside. The region remains a war zone with an ill-equipped and ill-trained army fighting several homegrown militias, as well as Rwandan and Ugandan rebels.

Rebels, militias and soldiers all are involved in mining, with those getting rich off Congo’s resources having little incentive to end conflicts that drove a quarter million people from their homes in the past year.

Congo’s government had been battling for seven years to qualify for the debt relief programs. Negotiations were jeopardized last year by IMF concerns about Congo’s $9 billion barter deal with China, offering mineral rights in exchange for roads, a railway, hospitals and schools. The plan was only put back on track after Congo agreed to reduce the terms and amount of the deal.

The IMF said it objected to Congo incurring further debt while it was negotiating for relief, even though the China deal involves no money. Critics said it reflected Western fears about China’s growing influence in Africa in that country’s search for mineral and petroleum resources.

First Quantum’s mineral rights were revoked in a review of dozens of major mining contracts, many with questionable terms negotiated while the sprawling Central African country with massive mineral resources was at war. Corruption that became endemic under Mobutu’s 32-year dictatorship continues to plague Congo.

Nevertheless the World Bank’s Congo director, Marie-Francoise Marie-Nelly, praised “the government’s huge efforts” to qualify for the debt relief.

The qualifications are supposed to include poverty reduction and improvements in governance, public expenditure and debt management, and delivery of health and education services.

Congolese officials did not respond to calls seeking comment Friday on what Congo did to qualify for debt relief.

Marie-Nelly could not immediately be reached to explain what the government had done to satisfy those conditions.

In a statement Thursday, she noted that “Strengthening the rule of law, improving governance — especially in the oil and mining sectors — and improving the business climate are essential next steps to macroeconomic policy management and performance following a devastating decade-long conflict that destroyed the country’s economic and social infrastructure.”

The money that Congo does not spend on debt — estimated at $800 million a year in 2005 — is supposed to be spent on social programs like education and health.

Almost all the debt was obtained by Mobutu, who was supported by the West as a bulwark against communism despite legendary kleptocracy that allowed him to accumulate a personal fortune estimated at $5 billion. Mobutu was overthrown by an alliance of invading rebels in 1997. Laurent Kabila, the father of Congo’s current president, took power.

Then neighboring Rwanda’s genocide spilled over the borders and a regional battle began over control of Congo’s vast resources that drew in troops from six countries all given mining concessions in return for their support. Congo holds 30 percent of the world’s cobalt and 10 percent of its copper.

Four million people died, mainly from strife-driven hunger and disease, and left the country in such disarray that the International Rescue Committee estimates some 45,000 people die each month even now.

Kabila was later assassinated and replaced by his son Joseph, who is still in power after winning a landmark election held in 2006.

RELATED STORIES

OPINION: Have We Forgotten The Heart Of Africa?

STUDY: Mass Civilian Rape In Congo Continues To Skyrocket

Enhanced by Zemanta

Join the Conversation! Share on Facebook!

Tags: »

Comments

blog comments powered by Disqus