BBC NEWS Americas Africa Europe Middle East South Asia Asia Pacific
BBCi NEWS   SPORT   WEATHER   WORLD SERVICE   A-Z INDEX     

BBC News World Edition
 You are in: Business  
News Front Page
Africa
Americas
Asia-Pacific
Europe
Middle East
South Asia
UK
Business
E-Commerce
Economy
Market Data
Entertainment
Science/Nature
Technology
Health
-------------
Talking Point
-------------
Country Profiles
In Depth
-------------
Programmes
-------------
BBC Sport
BBC Weather
SERVICES
-------------
EDITIONS
Friday, 14 June, 2002, 13:25 GMT 14:25 UK
IMF agrees Congo loan
Congo rebel soldiers
Congo is emerging tentatively from conflict

The International Monetary Fund has agreed a $750m loan to the Democratic Republic of Congo intended to help reduce poverty and promote economic growth.

An IMF statement also held out the prospect of debt relief for the country.

This new loan is a risky one.

The Democratic Republic of Congo is tentatively emerging from a period of conflict, and any reversal would undermine the effort to improve the county's economic prospects.

Chequered past

The history of international lending in Congo is not a happy one.

The IMF and the World Bank have been accused of lending to a corrupt dictator, Mobutu Sese Seko, because it suited the cold war political concerns of the leading western powers.

But in the early 1990s, the deteriorating economic situation in Zaire, as it then was, led to the country falling behind with debt payments.

As a result, the IMF and the World Bank stopped providing support.

In the last year, the government of President Joseph Kabila has been pursuing economic reforms with IMF advice.

The IMF says that as a result the vicious cycle of hyperinflation and a falling currency has been broken. The Fund also predicts that the economy will start growing again this year.

The IMF feels that progress has been good enough to justify a new loan.

Credit line

Over half a billion dollars is available immediately. The remaining two hundred million dollars will be paid in instalments following reviews of Congo's economic policy.

In addition, the IMF has also held out the prospect of debt relief under an initiative it runs with the World Bank, although Congo will have to implement further economic reforms agreed with the IMF.

The Congolese Finance Minister Matungulu Mbuyamu says that the country's total debts are thirteen billion dollars.

He expects lenders to write off a total of ten billion dollars in due course.

 WATCH/LISTEN
 ON THIS STORY
The BBC's Andrew Walker
"They've been following some fairly uncomfortable IMF advice... and it's produced results"
See also:

26 Sep 01 | Business
03 Sep 01 | Africa
23 Aug 01 | Africa
02 Aug 01 | Africa
07 Sep 01 | Country profiles
02 May 02 | Business
Links to more Business stories are at the foot of the page.


E-mail this story to a friend

Links to more Business stories

© BBC ^^ Back to top

News Front Page | Africa | Americas | Asia-Pacific | Europe | Middle East |
South Asia | UK | Business | Entertainment | Science/Nature |
Technology | Health | Talking Point | Country Profiles | In Depth |
Programmes