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Problems remain over Congo's Chinese contract -IMF

Sun May 24, 2009 10:53pm IST
 
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* IMF worried by Congo debt levels

* Mining-driven economy crippled by global downturn

By Joe Bavier

KINSHASA, May 24 (Reuters) - Congo and the International Monetary Fund have yet to resolve disagreements over a Chinese infrastructure-for-minerals package that is blocking much needed debt relief, IMF Managing Director Dominique Strauss-Kahn said on Sunday.

Under the $9 billion package signed early last year, cash-strapped Democratic Republic of Congo granted Chinese companies lucrative copper and cobalt concessions in exchange for the building of roads, railways, and hospitals.

IMF officials worry the contract, a key element of President Joseph Kabila's post-war economic policy, will plunge the central African nation deeper into debt, and have delayed forgiveness of most of the $10 billion Congo already owes.

Strauss-Kahn, who is in Congo on a three-day visit aimed at relaunching a formal programme there, told journalists after a meeting with Kabila and Prime Minister Adolphe Muzito that the two parties were still seeking a way out of the impasse.

"I think that it's possible, but it's not certain ... If we leave things as they are, there could be elements of contradiction," he said.

The IMF has said it will wait for the results of the Chinese contract's feasibility study, expected next month, before it takes a decision on debt relief.  Continued...

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