African Development Bank Halts Congo Budget Support Over IMF Cut

The African Development Bank halted plans to consider offering the Democratic Republic of Congo $87 million in budget support after the International Monetary Fund cut its loan program over the nation’s opaque mining deals.

The AfDB, based in Tunis, linked the assistance, which refers to unrestricted funds given to a country to meet its budgetary needs, to the existence of an IMF program in Congo, said Valentin Zongo, the representative of the bank in the Central African country. The bank will continue providing financing to Congo through other, more restrictive, means, he said in a phone interview from the capital, Kinshasa, Dec. 19.

“The African Development Bank hopes that a new IMF program will be concluded in the beginning of next year or before the end of the first trimester so we can involve ourselves in the country with all our instruments including budget support,” Zongo said.

The IMF stopped its loan program with Congo on Nov. 30 with $225 million of disbursements outstanding after the government failed to publish full details of a 2011 mining deal involving state-owned miner Gecamines and a company linked to Israeli billionaire Dan Gertler.

The deal was one of at least six sales of mining projects by Congolese state-owned companies to Gertler last year. The IMF and anti-corruption advocacy groups such as London-based Global Witness questioned the deals because the government didn’t officially announce the sales at the time of their conclusion or account for all the revenue generated by the transactions.

New Program

The IMF has offered to start a new program with Congo, according to Oscar Melhado, the IMF resident representative in the country.

“We’re ready to reengage and we’re waiting for an invitation by the government to discuss the main components of a new program,” Melhado said in an interview yesterday in Kinshasa.

Patrice Kitebi, the minister in charge of finance in Prime Minister Matata Ponyo’s office, didn’t answer his phone when called for comment yesterday.

Congo is the world’s largest source of cobalt and produces about 3 percent of the world’s copper. It is also rich in tin ore, gold and diamonds.

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 in Johannesburg at asguazzin@bloomberg.net.

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