The Democratic Republic of the Congo (DRC) and the International Monetary Fund (IMF) are about to finalize the agreement on a $1.5 billion loan, marking the first successful completion of a financing program between the two entities. This program, framed by the Extended Credit Facility (ECF), received a positive evaluation during its sixth and final review in Kinshasa, signifying a major step for the Congolese economy[1].

Economic Performance

The IMF praised the "generally positive" performance of the DRC, despite the fiscal challenges posed by conflicts in the eastern part of the country, a conflict for which the Congolese government is working day and night to restore peace in the said region and the December 2023 elections, which have slowed the implementation of certain reforms. The DRC's economy heavily relies on the export of minerals such as copper and cobalt, two essential resources for the global industry, particularly in the electronics and renewable energy sectors[2].

Transparent fund management

The IMF emphasized the importance of adopting a new budgetary law following the revision of a minerals-for-infrastructure exchange contract with China. Under the new terms of the agreement, the DRC will receive 324 million dollars per year for development, funded by the revenues from a copper and cobalt joint venture.

"It will be necessary to establish or strengthen mechanisms to ensure appropriate use and good governance of these funds," warned the IMF[3].

Review of the mining agreement with China

President Félix TSHISEKEDI pushed for the revision of the 2008 infrastructure-for-minerals agreement with Sinohydro Corp and China Railway Group to bring more benefits to Congo. An agreement was signed in March[4].

Approximately 7 billion dollars of infrastructure investments in the Democratic Republic of the Congo by Chinese companies under a revised mining agreement largely dependent on maintaining high copper prices[5].

Impact on the mining and economic sector

Note that this loan agreement with the IMF represents a significant advancement for the DRC, not only in terms of financial support but also for the development of its mining sector, which is crucial for the national economy. The mining sector, being the backbone of the Congolese economy, will directly benefit from the funds to improve infrastructure, attract more investments, and stabilize mineral production and exports.

This three-year program, a first in the history of Congo since its independence, is designed to strengthen the country's international reserves and support its ambitions for sustainable economic development. The completion of the review will allow for a disbursement of 1.5 billion dollars, which will contribute to economic stability and the strengthening of the DRC's financial capacities[6]. The disbursement of funds is expected after the final review by the IMF's board of directors in July 2024.