IMF Wants Assurances on Debt Restructuring Before Congo Bailout

(Bloomberg) -- The International Monetary Fund said it wants assurances from the Republic of Congo’s creditors about how the nation’s debt will be restructured before it considers a bailout.

The debt-laden country has been trying to secure a bailout since last year from the IMF, which has asked the government to curb rampant corruption and divulge the assets of high-level officials before providing any support. Oil-producing Congo’s economy has contracted for the past two years and it owes creditors at least 5.31 trillion CFA francs ($9.2 billion).

The IMF repeatedly rescheduled board meetings to discuss the package in recent months, without saying why. It reached an agreement with the government in April on a program to stabilize government finances.

“The arrangement to support Congo’s economic program would be placed on the IMF Executive Board agenda once credible and specific assurances from key creditors on debt restructuring have been established,” the fund said in an emailed response to questions on Friday.

Congo’s debt-to-gross domestic product ratio is about 110 percent, well above the 70 percent threshold allowed by the Economic and Monetary Community of Central Africa, according to a February report by the French Embassy in Congo that cited the Finance Ministry’s Congolese Sinking Fund. Congo is one of six country’s in Cemac.

Congo’s creditors, which include Glencore Plc and Trafigura Beheer NV, are owed 1.2 trillion CFA francs, according to the embassy report, which was published on the Congolese prime minister’s website. The nation’s external debt to China is estimated at 1.6 trillion CFA francs, it said.

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