IMF praises Congo economy, releases fresh loans 11 February...

IMF praises Congo economy, releases fresh loans
11 February 2011
Source: Reuters News

* Economy improving

* Govt serious about business climate, IMF thinks

By Jonny Hogg,

KINSHASA, Feb 10 (Reuters) - The International Monetary Fund has praised Democratic Republic of Congo's economic progress and approved the release of $77 million as part of an existing loan facility to the central African nation.

Separately, the Fund's country chief told Reuters on Thursday he was seeing an improved business climate in Congo after a series of disputes with investors in its vast mining sector in recent months.

"Macroeconomic performance has improved markedly," IMF Executive Board acting chairman John Lipsky said in a statement.

"Economic activity is expanding at a strong pace, inflation has decelerated, the exchange rate has stabilised and debt relief has reduced the external debt burden that weighed heavily on the economy," he added, in reference to the $12.3 billion reduction made to Congo's international debts last year.

The review is the second to be carried out as part of the three-year Extended Credit Facility, which started in December 2009 and is planned overall to release $541 million in loans.

IMF country representative Samir Jahjah said the Fund agreed with Congo's 2011 budget forecast of 6.8 percent growth this year, up from around six percent last year, and annual inflation averaging 9.9 percent during 2011.

Jahjah dismissed fears fiscal discipline would be abandoned as Joseph Kabila seeks re-election this year, saying the budget showed the government was committed to balancing its books.

He further noted that the high global prices for two major exports -- cobalt and copper -- would boost income and was optimistic Congo could allay concerns of would-be investors.

"The government has put in a number of reforms (to increase transparency) which will take time to implement, but they have shown their commitment to do so, so we do see change and improvement, that is for certain," he added.

Perceived contract insecurity prompted risk premiums in Congo to rise 40 percent last year after the state withdrew rights to Canadian miner First Quantum's $750 million KMT mining project and handed them to Kazakh rival ENRC.

Uncertainty over Freeport-McMoRan Copper & Gold's huge Tenke Fungurume copper project also hung over the sector.

But a mining review concluded with the company conceding a small share in the project to the state in a deal which analysts widely viewed as positive for the company.



In DR Congo, a Bridge Proves Key to Lower Food Prices

10 February 2011
Source: Daily The Pak Banker

Karachi: As the world grapples with concerns over rising food prices, early returns from a project in the Democratic Republic of Congo show that smart investments along the agricultural value chain can go a long way toward lowering prices on local markets.

For a long time, crossing the Loange River was a major headache for merchants and passengers who traveled along National Highway No. 1 between the cities of Kikwit in Bandundu province and Tshikapa in Kasa?-Occidental.

Whenever they reached this point, they had to unload their trucks on one side of an old bridge that hung over the river and then load them again on the other side. ?This transshipment would last two days and it would take a total of five days to travel between the two cities,? recalls John Kukulu, coordinator of the bridge rehabilitation effort funded by the World Bank under its Emergency Multi-sector Rehabilitation and Reconstruction Project (EMRRP).

Dubbed the ?Fiftieth Anniversary Bridge? because it was opened during the celebration of DR Congo?s 50th anniversary of independence, the bridge truly defies nature. Stretched over 440 meters, it is the country?s second longest structure of this type, after the Mar?chal Bridge (722 meters) that spans the Congo River, linking the capital city of Kinshasa to the port the city of Matadi, in Bas-Congo province.

Making a Real Economic Impact Since rehabilitation of the Loange Bridge, travel time between Kikwit and the diamond city of Tshikapa has been reduced to just a few hours. Travel was further facilitated by the construction of another bridge over the nearby Lovua River, which vehicles had to bypass in the past, using a long detour to get back on National Highway No. 1.

The bridges have made a real difference for families and businesses in these regions. When transport conditions are poor, farmers lose part of their output because it takes longer for shipments to reach markets and other distribution centers. They often have to increase the prices of the remaining output so that they can make up for their losses.

By improving access to Kasa?-Occidental and its agricultural zones, these structures help increase supplies to urban centers along the route. They also contribute to economic development and lower food prices in local markets, not only in the cities of Kikwit and Tshikapa, but also in Kananga and Mbuji-Mayi. For families, the difference is immediate. ?A sakombi of corn that used to cost 2,500 Congolese francs now costs 1,600 because it is now easy to transport goods,? noted one Kikwit resident, referring to a basic unit of measurement for grains in Congolese markets equivalent to about one kilogram.

Key to Regional Integration Launched in 2002 when DR Congo was emerging from war, the EMRRP is a large-scale, US$700 million project that marks the reunification of the country. Covering key sectors of the Congolese economy, its aim was to support the efforts and strategies put in place by the government to address the challenges that were facing the country, particularly the priority needs of the population through the restoration of basic infrastructure.

The benefits derived from projects such as this go beyond national borders. ?The Loange Bridge is vital to regional integration because it provides a continuous road link across six provinces in DR Congo and it also enables a connection between Central Africa and countries in East and Southern Africa,? notes Christophe Bosch, infrastructure sector leader at the World Bank office in Kinshasa.

Built over a period of 18 months at a cost of US$36 million, the Loange Bridge is made of reinforced concrete and steel. It can handle a load of up to 50 metric tons. 。