- Since the International Monetary Fund (IMF) last week stated its confidence in Congo Brazzaville, good news have not stopped streaming in. Earlier this week, Congo's main creditors decided to cancel 60 percent of its debts. Today, the African Development Bank (ADB) said it had decided to resume its assistance to Brazzaville. New transparency in the oil sector turned the tide.
The ADB today issued a statement saying it had cleared 33 percent of Congo Brazzaville's arrears and "resumes its assistance to the country by supporting economic reforms programme." The announcement comes after a busy week for Congolese Minister of Economy, Finance and Budget, Rigobert Andely, who has negotiated with a large number of foreign finance institutions.
Earlier this week, Minister Andely and ANB Vice-President Bisi Ogunjobi met in the Bank's headquarters in Tunis and signed a grant agreement of US$ 51.1 million to finance an arrears clearance programme. Mr Ogunjobi and Mr Andely also ratified an African Development Fund (ADF) loan agreement, to support the country's IMF-approved Policy Reform Programme, reaching US$ 10.7 million.
After Burundi, Congo Brazzaville is only the second country to benefit the new ADB assistance to post-conflicts countries. The ADB in this type of programme clears arrears, which is to "allow for rapid resumption" of the Bank's assistance to the country in conjunction with other international financial institutions and donor countries.
Congo's arrears to the Tunis-based bank amounted to US$ 150 million (CFA 116 billion) at the end of 2003. ADB contribution to clear these arrears represents 33.3 percent of the total amount, Congo having catered in the tune of 34.3 percent and donor countries the remaining 32.4 percent.
Mr Ogunjobi emphasised that this operation had been enabled by "the significant economic recovery achieved by Congo, particularly in terms of reforms, governance and transparency." This had been certified in an IMF report earlier this month, which had the Fund to approve a three-year poverty reduction programme worth US$ 84.4 million for Brazzaville.
Congo Brazzaville earlier has had a reputation as one of the most corrupt oil producing countries, as shown by the widespread poverty in spite of significant oil revenues. Years of conflict also had contributed to economic chaos and excessive budgets. Acting IMF Chair Takatoshi Kato however last week found that now made "considerable progress" in economic reforms and in creating one of the world's most transparent oil sectors.
In Tunis, also Congolese Finance Minister Andely underlined that his country now was being "commended by the international community for its great transparency in its oil sector," which remains one of the main pillars of its economic growth. This development had been the turning point in international confidence in the Brazzaville government's budget spending.
Only one week after the IMF expressed its confidence in the Brazzaville government, the so-called Paris Club - an association of the world's major industrialised countries, which also are the leading creditor nations - decided to cancel US$ 1.6 billion of Brazzaville's debts. A further US$ 1.5 billion in debt were rescheduled to give Congo an opportunity to lower repayments and invest in social structures.
This means that Congo Brazzaville's debts to Paris Club creditors are cut from around US$ 3,730 million down to around US$ 770 million. The clearance of arrears by the ADB further contributes to shorten Congo's debt repayment and strengthen its budget. The total stock of Congo Brazzaville's external public sector debt was estimated as of end 2003 to be US$ 8.6 billion.
Back in Tunis, Minister Andely expressed its gratitude to the Bank for normalising its relations with the country. This will allow other partners to lift their sanctions, such as France, Norway and the European Commission, which had participated to finance this programme. The next relief for Brazzaville, thus, is already scheduled.
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