afrol News, 18 November - The main creditors of Congo Kinshasa (DRC) have agreed to cancel Congolese foreign debts totalling US$ 7.35 billion. Much of the unsustainable debt was accumulated under ex-Dictator Mobutu Sese Seko.
The record debt cancellation was announced yesterday evening by the Paris Club, an informal group of the world's main creditor countries. 19 Paris Club countries and Brazil agreed to cancel almost the entire Congolese debt accumulated over the years.
Kinshasa Finance Minister Matata Ponyo Mapon yesterday met with representatives of these creditors in Paris, negotiating a debt cancellation deal after the International Monetary Fund (IMF) in July this year had agreed his government had made enough progress to qualify for debt relief.
The Democratic Republic of the Congo's public external debt was estimated to total US$ 13.70 billion as of end 2009, according to the IMF. Meanwhile, the debt owed to Paris Club creditors was estimated to be US$ 7.53 billion in July 2010.
Almost all of the latter debt was to be cancelled as a result of yesterday's negotiations. The Paris Club and IMF are to help Congolese authorities to achieve a reduction of debts held by other creditors.
Congo Kinshasa had accumulated enormous amounts of debts, with security in its vast mineral resources, under the despotic rule of President Mobutu. During his rule, when the country was known as Zaire, Congo was known as the world's most corrupt country.
It is estimated that the vast majority of funds borrowed by President Mobutu was lost to corruption and to finance the luxurious life of the Dictator, his family and his closest allies.
Since the ousting of President Mobutu, government has tried to improve its international standing by fighting corruption and rigorously reforming the economy. Political instability and several wars have slowed economic progress and reforms. Congo Kinshasa still is considered one of the most corrupt countries in the world.
While the IMF agreed Kinshasa authorities had implemented enough reforms to qualify for debt relief, Paris Club creditors however still were sceptical and "expressed their concern over the business environment" in Congo.
At the Paris meeting, creditors urged the Kinshasa government "to carry out further reforms to improve governance, strengthen the rule of law and fight corruption, which are necessary conditions to ensure a sustainable development" after the agreed debt cancellations.
Finance Minister Mapon nevertheless was hailed for his government's "determination to implement a comprehensive poverty reduction strategy and an ambitious economic programme providing the basis for sustainable economic growth, including the commitment to improve governance and business environment," according to a statement by the Paris Club.
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