Bloomberg News

Congo Seeks 6-Month Extension to $528 Million IMF Loan Program

November 16, 2012

The Democratic Republic of Congo requested a six-month extension to its three-year, $528 million loan program with the International Monetary Fund in order to comply with its terms, an IMF official said.

The multilateral lender, based in Washington, has delayed payments to Congo since December 2011 because the country failed to meet some of the conditions of its loan agreement, including the publication of mining contracts. About $225 million in disbursements remain outstanding from the IMF program, which is set to end Dec. 10, Oscar Melhado, the IMF’s resident representative, said in an interview.

“In order to complete the remaining reviews, Congo needs more time,” he said yesterday in Kinshasa, Congo’s capital. The IMF’s staff must petition its executive board by Nov. 19 to recommend the extension and is considering Congo’s request, Melhado said.

Under the terms of the loan agreement, Congo agreed to publish all contracts related to oil, mining and forestry deals to improve governance of its extractive industries. The country hasn’t published the contract of a 2011 sale by state-owned copper miner Gecamines of its 25 percent stake in the Comide Sprl mining project, which is controlled by London-listed Eurasian Natural Resources Corp. (ENRC)

Comide board minutes showing that the shares were sold to British Virgin Island-based Straker International Corp. have been published on the website of Congo’s Mines Ministry. The minutes don’t provide a selling price or other details of the sale.

‘Contracts Published’

“There were discussions if the minutes were sufficient to observe the conditionality,” Melhado said. “It is the Congolese authorities’ position that all contracts have been published.”

Gecamines has published all documents relating to the sale that it plans to publish, Chief Executive Officer Ahmed Kalej Nkand said in an Oct. 23 interview in Lubumbashi, where Gecamines is based.

Patrice Kitebi, the minister in charge of finance in Prime Minister Matata Ponyo’s office, didn’t answer two phone calls or respond to a mobile-phone message seeking comment.

The funds from the IMF loan facility, which are supposed to support economic growth and reduce poverty, will be used to shore up Congo’s cash reserves, Melhado said.

To contact the reporter on this story: Michael J. Kavanagh in Kinshasa at mkavanagh9@bloomberg.net.

To contact the editor responsible for this story: Antony Sguazzin in Johannesburg at asguazzin@bloomberg.net.


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