IMF says more work needed before Congo’s debt-plagued economy bailout

The International Monetary Fund (IMF) has concluded its negotiation mission in Congo without reaching an agreement on an assistance package, the Washington-based international lender said in a statement.

The IMF said it was encouraged by Congo’s draft 2018 budget and the progress made in formulating medium-term macroeconomic and structural policies it could support, but more work was needed to restore debt sustainability and strengthen governance.

The head of the IMF mission in the country said a financial arrangement to bail out the debt-plagued economy would be discussed by the IMF Executive Board.

Fitch downgraded Congo’s senior unsecured foreign-currency bonds to D from C in August, after the 30-day grace period for the $21 million payment on the bond maturing in 2029 expired.

Congo has been drastically hit by the oil price collapse, with government revenue falling from $6.3 billion in 2013 to $2.5 billion in 2016. Some of the debt is thought to be owed to commodity trading companies, who lent money to the government guaranteed by future oil revenues.

Of the Congo’s $9 billion debt, only $478 million is owed as bonds, and these do not have a huge repayment burden as interest is 2.5% ($12 million)

President Denis Sassou-N’Guesso, 71, has led the country in two separate periods totalling more than 30 years.

About Geraldine Boechat 2134 Articles
Senior Editor for Medafrica Times and former journalist for Swiss National Television. former NGO team leader in Burundi and Somalia