IMF and DR Congo agree on the last assessment of the $1.5 billion loan agreement

The International Monetary Fund said on Wednesday that it and the Democratic Republic of the Congo had reached a staff-level agreement over the last evaluation of a $1.5 billion loan program. The IMF also mentioned that the Congo must appropriately handle cash from a revised mining agreement.

Congo is now one step closer to finishing its first-ever IMF program. Previous accords have been undermined by various problems, such as its extensive mining sector’s lack of openness.

“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 stated in a statement.

The agreement will permit the payment of a final tranche of around $200 million after it has been approved by the IMF board.

The IMF pointed out that the third-largest producer of copper and the world’s top supplier of cobalt, a mineral used in smartphones, needed to factor in the benefits of a 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,” according to the Fund.

In order to benefit Congo more, President Felix Tshisekedi pushed for revisions to the 2008 infrastructure for minerals agreement with Sinohydro Corp. and China Railway Group. In March, a contract was signed.

According to a finance ministry official who asked to remain anonymous to Reuters, “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.”

One of the requirements of the IMF program was the publication of mining contracts. This week, Congo released the long-awaited details of the updated Sicomines agreements, which include approximately $7 billion in infrastructure investments from China as long as copper prices stay high.

According to a 2023 report by Congo’s national auditor, under the prior version of the deal, just $822 million of the $3 billion committed for infrastructure projects was paid out.

The amended agreement still contains provisions that foreign civil society organizations and Congolese citizens believe are detrimental to the country.

Among these is Sicomines’ tax exemption, which is valid until 2040.