Congo, Rwanda Must Commit to Peace for World Bank’s $1 Billion

World Bank President Jim Yong Kim said the lender’s $1 billion pledge to Africa’s Great Lakes region obliges countries including the Democratic Republic of Congo and Rwanda to adhere to a peace accord signed in February.

Kim is traveling in the region with United Nations Secretary-General Ban Ki-moon amid renewed fighting between rebels and the Congolese army in eastern Congo, which has experienced nearly two decades of conflict. Congo joined 10 African countries, regional organizations and the UN in signing a so-called framework agreement in February to bring peace to the region.

The World Bank is “dramatically increasing our commitment to a regional solution because we think that the opportunity of the peace framework is so important that we’ve got to move with extra funding,” Kim said in an interview yesterday in Kinshasa, Congo’s capital. “We’re asking everyone to abide by the peace framework.”

The bank, based in Washington, will provide $1 billion in new funds to promote cross-border trade and for projects including hydropower plants and road construction, Kim announced yesterday. The programs will benefit Congo, Rwanda, Burundi, and Tanzania, he said.

“For us, it’s not so much a gamble as it is a commitment up front that the kind of development we’re talking about –- energy, agriculture, health care, trade –- that these are the things that are at the root of the conflict in the first place,” Kim said.

Rwandan Genocide

Fighting in Congo began when the perpetrators of Rwanda’s 1994 genocide fled over the border to Congo along with millions of refugees. Two wars followed, in which soldiers from at least seven African countries fought on Congolese soil. A peace agreement was signed in 2003, though more than a dozen foreign and Congolese rebel groups remain in the country’s east.

As of March, about 1.6 million people were displaced in North and South Kivu provinces, which border Rwanda, Burundi, Tanzania and Uganda, according to the UN Humanitarian Agency.

Last year, Congo and UN experts accused Rwanda and Uganda of backing rebels in the mineral-rich provinces. Both countries denied the charges. Western nations including the U.S., the U.K. and Germany withheld hundreds of millions of dollars in planned aid to Rwanda because of the accusations.

Under the terms of the February peace framework, signatories pledged not to destabilize neighboring countries or support armed groups. Congo agreed to reorganize its army and police, which have been accused by the UN of abuses. The Central African country also said it would decentralize power, undertake governmental and financial reforms, and promote reconciliation and democracy.

Growth Recovering

Congo’s wars decimated its economy, which is slowly recovering. While gross domestic product increased 7.2 percent last year, in March the UN named Congo the least-developed country in the world, tied with Niger.

Congo’s reputation for corruption has discouraged companies from investing in the country of more than 70 million people, according to the World Bank. In 2013, the International Finance Corp., the bank’s private-lending arm, ranked Congo 181 out of 185 economies listed by ease of doing business. In November, the International Monetary Fund cut its loan program with Congo because of concern that the way the government manages the mining industry is opaque.

Congo was the world’s largest producer of cobalt and the eighth-largest producer of copper last year, according to the U.S. Geological Survey.

“There are always going to be problems and downsides with the governance of places that are fragile and conflict-affected like the DRC,” Kim said. “The point is that by investing, and by helping governments get better, that over time we can both reduce the conflict and improve governance overall.”

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

To contact the editor responsible for this story: Paul Richardson at pmrichardson@bloomberg.net

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