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IMF Says Congo Economy to Grow 8.2% to $20.7 Billion in 2013

Democratic Republic of Congo’s economy will grow an estimated 8.2 percent to 18.9 trillion Congolese francs ($20.7 billion) next year, the International Monetary Fund said in a statement on its website.

The Central African country’s economy should expand about 7.2 percent this year to 16.4 trillion francs, the IMF said in the statement yesterday after an annual “Article IV” review of Congo’s economic development and policies. The Washington-based international lender has a three-year, $561 million loan agreement with the country.

“In the past few years, economic performance in the DRC has shown marked improvement although progress in alleviating poverty” has lagged, according to the statement. “Strong trade and investment inflows from non-European countries, driven mainly by the mining sector, have provided the main impetus to growth.”

Congo produces about 4 percent of the world’s copper and nearly half its cobalt, and has deposits of gold, diamonds, and tin. The potential mineral riches have attracted a $6 billion minerals-for-infrastructure agreement with China. Hong Kong- based Minmetals Resources Ltd. and Jinchuan Group Ltd. (2362) acquired mining projects in Congo in the past 13 months.

Transparency Lacking

Phoenix-based Freeport-McMoRan Copper & Gold Inc. (FCX)’s $2 billion Tenke copper and cobalt project is the largest single investment in the country.

While the economy has expanded since the end of nearly a decade of war in 2003, the United Nations Development Programme ranked Congo the least-developed country in the world last year.

An increase in external debt arrears and poor governance of its natural-resource industry may hamper the country’s economic progress, the IMF said.

The IMF delayed Congo’s last two loan disbursements, worth more than $150 million combined, in part because of a lack of transparency and accountability at the country’s state-owned mining companies, according to the statement. The companies are required to publish contracts and report deal details under the IMF agreement.

“Poverty remains widespread, the economy is vulnerable to domestic and external risks, and program delays are cause for concern,” according to the fund’s statement. “Directors called for steadfast efforts to preserve fiscal credibility, strengthen the monetary policy framework, and improve the governance of extractive industries.”

To contact the reporter on this story: Michael J. Kavanagh in Kinshasa at mkavanagh9@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net

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