Battle to Survive in Congo Republic as Wages, Pensions Stop

(Bloomberg) -- If it wasn’t for two sons in France sending money, pensioner George Kimbembe says he’d have joined the ranks of the dead in the Republic of Congo’s capital, Brazzaville.

That foreign cash is a lifeline for the 76-year-old former civil servant who hasn’t received his pension for 13 months. It’s a shortfall emblematic of a fiscal crisis engulfing the oil-producing central African country that was battered by lower crude prices, owes creditors more than $9 billion and is seeking an International Monetary Fund bailout.

“How does the government expect us to survive?” Kimbembe said in an interview. “Some of my fellow pensioners have died because they couldn’t pay for their medication or feed themselves.”

Such complaints are echoed throughout Brazzaville and the broader country of 4.2 million people, where companies can’t meet their bills, employees -- if they’ve been kept on -- wait months for wages and foreign business owners talk of calling it quits. The IMF says Congo’s economy contracted 4.6 percent last year, the largest drop since 1994. It may grow an anemic 0.7 percent in 2018.

Debt Tripled

Ruled for two decades by President Denis Sassou Nguesso and home to sub-Saharan Africa’s fourth-biggest oil reserves, Congo is ranked among the world’s 20 most corrupt nations by anti-graft campaigners Transparency International. Authorities are repeatedly accused by groups such as Human Rights Watch of cracking down on political opponents.

The country’s debt has more than tripled since 2010 to more than 110 percent of gross domestic product. London-based advocacy group Global Witness alleges a series of pre-financing deals by the state oil company were used by people close to or part of Sassou Nguesso’s family as vehicles for corruption. The government has rejected the claims.

The IMF, which had asked for clarity on what Congo owes bilateral and commercial lenders, said April 19 it had reached “broad understandings” of policies it could support as part of a bailout deal. It backed government plans for an independent anti-graft body and a system for high-level officials to declare assets, as well as for authorities to have increased oversight of state-owned enterprises, including oil company Societe Nationale des Petroles du Congo.

Rising Oil

A new IMF loan program would run through 2021 and help Congo rebuild its foreign-exchange reserves, Prime Minister Clement Mouamba said last month, adding that the country’s Eurobonds will be excluded from a plan to restructure its debt.

With predictions oil could again climb to as much as $100 a barrel next year, Congo’s economy is likely to benefit. It seeks to join OPEC and is targeting raising output to 350,000 barrels per day.

Government spokesman Thierry Moungalla said authorities now have to focus on cutting spending and diversifying the economy. He acknowledged delays in some government pensions and salaries, but said ministers and lawmakers are also affected and the administration is “making an effort” to solve it.

High-ranking government workers haven’t been spared. Patrick Gnonock, who runs a real-estate agency in central Brazzaville, said during the oil boom such employees used “to rent several houses for their mistresses or to open designer boutiques.” Now that’s over, his business is suffering and he’s dismissed three of his five staff.

School Fees

A turnaround can’t come soon enough for Marc Mabiala Dedier Mavoungou, a municipal council worker in Mossendjo, a town about 190 miles from Brazzaville, who says he was last paid 15 months ago.

“My children can no longer go to school because I can’t pay the fees or buy their books,” he said.

Malian businessman Cheikh Hassan has more experience in the country than most. He’s been in Congo almost four decades, owns shops in Brazzaville and Pointe Noire, the second city, and rode out the mid-1990s crisis. He says he’s never had it so tough.

“I owe banks and my suppliers,” he said. “I have no option than paying my debts by selling some of my properties and going back to Mali.”

©2018 Bloomberg L.P.

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