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African Development Bank Halts Congo Support Over IMF Cut

Dec. 21 (Bloomberg) -- 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 country. The bank will continue providing financing to Congo through other more restrictive means, he said in a Dec. 19 phone interview from the capital, Kinshasa.

“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

Congolese Senator Emery Kalamba called on the government to ask the IMF to start a new program as soon as possible to ensure relations with other bilateral donors aren’t damaged.

“This was our worry that the termination of the program would have indirect consequences on our financial resources,” Kalamba said in a phone interview today from Kinshasa. “That’s why we’ve asked the government to respond to the demands of the IMF and release the details of this deal.”

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.

Copper, Cobalt

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.

Kalamba said that because Congo is the only shareholder in companies such as Gecamines, the disposal of those assets should benefit the state.

“We need to find a system by which these sales are transparent and done through an open tender,” he said.

Congo, a Central African nation the size of Western Europe with a population of about 68 million people, is the world’s poorest country with per capita gross domestic product of $231, according to World Bank data. The United Nations Development Programme ranked Congo the least-developed country in the world last year and it remains near the bottom of Transparency International’s Corruption Perceptions Index.

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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