Chinese President Xi Jinping has agreed to a restructuring of Congo’s vast debts which has prevented the Central African country from resuming negotiations with the International Monetary Fund (IMF).
On Monday, Congolese Prime Minister Anatole Collinet Makosso acknowledged the financial difficulties his country was confronted with, promising to bring about a reduction in the debt burden
“Our financial difficulties, compounded by the health crisis, have increased our debt and reduced our ability to service it,” Mr. Makosso told parliament in the capital Brazaville.
“We must therefore do everything possible to make the public debt sustainable. Our debt currently stands at nearly CFA Francs 6 trillion as of 31 December 2020, or 98% of GDP,” he said.
According to the prime minister, the government’s objective is to bring the debt down to below the CEMAC community standard set at 70% of GDP.
Congolese Finance Minister Rigobert Roger Andely earlier said President Denis Sassou Nguesso had “raised the problem” in a telephone conversation with Mr. Xi, “proposing a second restructuring” of the debt.
President Xi approved the request, Mr. Andely told reporters.
He said the restructuring aimed at allowing Congo to have a few more resources to deal with its own internal needs and to “lift this obstacle to good relations with the IMF”.
Experts from both China and Congo would be charged with fixing the conditions of the new agreement, he added.
In 2019, China had already done so, which allowed the country to enter into an Extended Credit Facility-focused program with the IMF, thereby unlocking a 449 million Dollars loan .
The IMF, which later rated the country’s economy as unsustainable, suspended its support.
The former French colony is doubly hit by the economic and health crisis due to the fall in oil prices and the spread of Covid-19.
According to the government, Congo owes China 2 billion dollars, while the country’s overall debt currently stands at more than 10 billion dollars as of December 31, 2020.