The staff of the International Monetary Fund have agreed to provide $ 1.5 billion to the Democratic Republic of the Congo over the next three years, likely securing the country’s first official lending program with the lender since 2012.
The agreement, which has yet to be definitively approved by IMF management and its board of directors, will mark the end of two years of negotiations between the DRC and the IMF. It is a major victory for President Felix Tshisekedi as he seeks to implement his political agenda after winning a power struggle with allies of his predecessor, Joseph Kabila, for control of the government.
The extended credit facility is expected to help the country emerge from the Covid-19 pandemic and reduce poverty, the IMF said.
“The program aims to create fiscal space for much needed social spending and investment, strengthen the monetary framework and financial supervision, and improve economic governance and transparency,” said Mauricio Villafuerte, IMF chief of mission for the DRC, in a statement sent by email.
The new program could unlock billions of dollars in additional funding from the World Bank and other donors, who use an official IMF program as an indicator of the government’s commitment to fiscal discipline. The IMF financing comes with conditions such as reforms to the central bank and the value-added tax system, and more transparency in the mining industry, the Washington-based lender said.
The DRC is the largest producer of copper in Africa and the largest source of cobalt in the world. Mining provides almost all of the country’s export earnings. The IMF halted its last lending program with the country at the end of 2012 over concerns over corruption in the industry, after the government refused to release a contract for a copper deal involving M’s family. Kabila.
“Improving governance and fighting corruption are essential, with a continued focus on the management of extractive resources, on improving public finance management and on combating money laundering,” said said Mr. Villafuerte.
The DRC’s economy is expected to grow 4.9% in 2021 as the country emerges from the pandemic and benefits from high copper and cobalt prices, the IMF said. The economy grew only 1.7% last year, he said.
Finance Minister Nicolas Kazadi did not immediately respond to a request for comment.