End of Power Struggle May Unlock $3 Billion of Funds for Congo
(Bloomberg) -- The World Bank may provide as much as $3 billion to the Democratic Republic of Congo as the country emerges from a power struggle in which supporters of President Felix Tshisekedi took control of the government from allies of his predecessor, Joseph Kabila.
Disbursement of the previously discussed financing over the next 18 months would boost the new government’s effort to confront multiple economic and social crises caused by the Covid-19 pandemic and ongoing conflict in eastern Congo.
The Washington-based lender has withheld approval for the funds as it waits for the government to implement agreed-upon changes to its handling of public finances, deregulation, governance and reforms of state-owned companies, World Bank country director Jean-Christophe Carret said.
“The complicated political history of this country has not yet created space to institute the reforms,” he said in a series of interviews last week.
The World Bank has offered Congo billions of dollars for water, electricity, agriculture, fiber-optic expansion and other development projects, Carret said. Last week, the two sides signed the first new deal, a $500 million mix of loans and grants to support basic infrastructure in the capital, Kinshasa, a city of 14 million people where more than 9 million live in poverty.
The bank is also ready to provide more than $200 million of unrestricted funds if Congo’s government meets a number of criteria, including the implementation of a new loan program with the International Monetary Fund, Carret said. The IMF and Congo have been in talks since shortly after Tshisekedi took power in 2019.
The new money will be welcome: Congo’s reserves are down to about $500 million and the economy grew less than 1% in 2020. Despite the pandemic, growth in the world’s largest producer of cobalt and Africa’s biggest copper producer beat forecasts thanks to higher commodity prices.
Carret said he was still waiting on results of a government investigation into embezzlement of education funds before the bank is able to resume hundreds of millions of dollars in support for Tshisekedi’s free schooling initiative. He said better financial management was key to their support, and the investigation was proof of the government’s commitment to reforms.
The bank is also set to provide $250 million in support of the country’s faltering Covid-19 vaccination campaign, Carret said. Only about 10,000 of Congo’s 100 million people have been vaccinated, and the country had to return most of its initial shipment of inoculations amid fears they’d expire.
“I hope a ‘Congo problem’ won’t emerge, where we have a country that has trouble vaccinating, and the virus continues to circulate -- even if it doesn’t seem to be circulating very actively -- and we produce variants,” he said.
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