Congo Central Bank Governor Seen Extending Bank Services
Deogratias Mutombo Mwana Nyembo, who became Democratic Republic of Congo’s central bank governor last week, may boost efforts to extend financial services to more of the country’s 70 million people, an industry group said.
The 48-year-old, who has worked as an economist at the bank for more than two decades, most recently serving as director of banking and markets, took over from Jean-Claude Masangu, who held the position since 1997.
“We hope he will maintain and pursue reforms implemented by his predecessor by cleaning up the financial system and by refining, expanding and modernizing the banking sector,” Michel Losembe, president of the Congolese Banking Association, said yesterday by phone from Kinshasa, the capital.
Congo’s banking industry is flourishing following the end in 2003 of nearly a decade of war and after Masangu implemented measures including lowering interest rates and innovations such as mobile-phone banking, Losembe said. Citigroup Inc. (C), First Bank of Nigeria Plc, South Africa’s Standard Bank Group Ltd. (SBK) and Ecobank Transnational Inc., based in Lome, Togo, are among 18 lenders with a presence in the country, he said.
The proportion of Congolese using the banking system almost tripled to 5.7 percent of the population last year, compared with 2 percent in 2011.
Congo, the world’s eighth-largest copper producer, ranks last along with Niger on this year’s United Nations Human Development Index, which measures indicators including levels of poverty, education and health care.
The banking industry “is not big in absolute terms, but the growth is five times GDP growth, which is why it’s attractive to newcomers,” Losembe said. Congolese banking assets grew 30 percent to $3.6 billion last year, while bank deposits jumped 33 percent to $2.6 billion, according to the central bank.
Business for commercial banks also improved after the government began transferring the salaries of civil servants through them, replacing cash payments, in major cities over the past 18 months, Losembe said. The Congolese units of Vodacom Group Ltd. (VOD), Bharti Airtel Ltd. (BHARTI) and Millicom International Cellular SA’s Tigo run mobile-banking services, Losembe said.
Mutombo takes over as Congo tries to settle a dispute with the International Monetary Fund and begin a new lending program. The Washington-based lender canceled its $523 million loan agreement in November after Congo failed to meet its demand to publish the details of a 2011 copper mining deal.
The central bank is responsible for setting the benchmark interest rate, which dropped to 3 percent in February from 70 percent at the start of 2010, and selling government debt. It holds weekly auctions of seven-day Treasury bills and infrequently issues 28-day notes.
Annual inflation in Congo at the end of 2012 was 5.7 percent and is expected to accelerate to 8 percent this year, according to the International Monetary Fund.
The foreign-currency reserves of the Central African nation’s central bank stood at $1.7 billion by the end of March, covering about 2.3 months of imports, from $50 million in 2008. Gross domestic product rose 7.2 percent last year as investment in the mining industry expanded and sales of copper, cobalt and gold rose. Growth may surpass 8 percent in 2013, according to the bank.
Like the outgoing central bank governor and President Joseph Kabila’s late father, Laurent Desire Kabila, Mutombo comes from the southern Katanga province, where violence in the capital, Lubumbashi, by a separatist militia in March killed at least 15 people. Most of Congo’s copper and cobalt come from Katanga.
The appointment “further galvanizes and strengthens Katangan control over crucial areas of government,” Tom Wilson, head of strategic advisory services at africapractice, an investment advisory company, said by phone from London yesterday.
“But at the same time it seems that given that long history in the central bank and that close working relationship with the former governor, it represents continuity from a policy perspective,” Wilson said.
To contact the reporter on this story: Michael J. Kavanagh in Kinshasa at firstname.lastname@example.org
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