July 28, 2021

Congo, China agree to restructure Congolese debt

Congolese Presidents Denis Sassou Nguesso and Chinese Presidents Xi Jinping agreed on Monday, June 21, in a telephone interview, to restructure the colossal Congolese debt to Beijing, which prevents this Central African country from resuming negotiations with the International Monetary Fund ( IMF), we learned from official sources in Brazzaville.

“The debt issue was raised by the two presidents and President Sassou Nguesso posed the problem to his peer (…) by making a proposal for a second restructuring ”, told the press Rigobert Roger Andely, Congolese Minister of Finance. “President Xi Jinping approved [la demande] », he added, reporting on a telephone interview with the two heads of state.

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“This restructuring is to allow the country to have a little more resources to meet its own internal needs and to remove this obstacle to good relations with the IMF”, explained Mr. Andely. Chinese and Congolese experts are in charge “To be able to set the terms and conditions”, he explained.

In Beijing, the New China agency also mentioned the phone call between the two leaders, but without mentioning a restructuring of the Congolese debt. Xi Jinping assured that China would encourage its companies to invest more in Congo, in particular in the fields of health and agriculture, specified the Chinese press agency.

110% of PIB

In 2019, China had already restructured Congo’s debt, which had enabled the country to conclude a program focused on the Extended Credit Facility with the IMF. But since then, the Congolese debt assessed at 110% of gross domestic product (GDP) by the IMF has been deemed ” unsustainable “, the community standard in Central Africa being 70% of GDP, Congolese Prime Minister Anatole Collinet Makosso told the National Assembly on Monday.

The IMF has suspended its support. The country is doubly hit by the economic and health crisis due to the drop in oil prices and the spread of Covid-19.

The Congo owes China 1.3 trillion CFA francs (2 billion euros), according to the government, while the country’s overall debt “Currently amounts to 6,016.5 billion CFA francs (more than 10 billion euros) as of December 31, 2020, or 98% of GDP” Prime Minister Makosso said.

The World with AFP