July 12, 2019 / 4:50 PM / 3 days ago

Congo Republic IMF deal expected to unlock $2 billion in AfDB funds

JOHANNESBURG (Reuters) - Approval of an International Monetary Fund (IMF) bailout for Congo Republic this week is expected to unlock around $2 billion in funding from the African Development Bank (AfDB), an official with the Abidjan-based multilateral lender said on Friday.

Following two years of negotiations, the IMF’s executive board on Thursday approved a 3-year program worth nearly $449 million for Congo, an OPEC member hit hard by a 2014 crash in crude prices.

The AfDB pledged the funds, which include a budget support operation, in the event of an IMF-supported program, Ousmane Dore, the AfDB’s Director General of the Central Africa Regional Development and Business Delivery Office, told Reuters.

“These are indicative programs which are set to be delivered over 2018-21, once the projects are firmly prepared and disbursement conditions are met,” he said.

By 2017, following the oil crash, Congo’s debt levels had ballooned to 118% of GDP.

To qualify for a bailout, the IMF required that Congo ensure the long-term sustainability of its debt as a precondition for a three-year extended credit facility program.

Congo reached an agreement to restructure a portion of its Chinese debt in April. The IMF’s approval of a bailout was seen by many as a test case, amid expectations that a number of African nations with large Chinese debts will seek relief from the Fund.

Reporting by Joe Bavier; Editing by Frances Kerry

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