In the Democratic Republic of Congo, after a three-week negotiation marathon, governments and the International Monetary Fund (IMF) delegations agreed on the content of a three-year program. If this agreement is validated by the IMF’s management and board, the DRC can start receiving an initial payment of about $ 1.5 billion from mid-July. Congolese Minister of Finance Nicolas Kazadi discusses the challenges of this program.
RFI: How important is the signing of this program for the DRC?
Nicolas Kazadi: Cooperation with the IMF is welcome for our government, but we act above all out of conviction, not out of opportunism and even less out of imitation. A program with the IMF is necessary. As our economy is linked to other economies in the world, it is important to send a signal confirming our desire to return the DRC to good economic and financial practice.
This paves the way for payments that can reach one billion and a half dollars over three years. But in exchange for this money, there are a whole series of reforms that the Democratic Republic of Congo is undertaking. What reforms are we talking about?
The most important reforms concern taxation. It is simply focused on simplification in order to increase revenue mobilization and, above all, in a better business climate.
What are the key revenue mobilization measures planned in this program?
There are several, especially those related to exemptions, which are also related to VAT, which continues to pose many problems. But there are also non-tax revenues, there are some difficulties between those applied at the central level and those applied at the lower levels, but in any case we will have the opportunity to make them very public and detailed very soon.
Can we expect new mining contracts to be published when the program is signed?
Yes, the principle is that all new mining contracts must be published. This is the end of maintainingopacity in this area, because we have lived too long to the detriment of the public interest.
There were conditions that had to be met even before the signing of this agreement, which still had to be validated by the IMF management and in particular to strengthen the central bank’s independence. When will the new board be established?
Yes, the commitment has been made firmly. Compliance with the 2018 Central Bank Act will apply before the DRC file is submitted to the IMF Board.
There were still points, we say, and especially in the management of funds set aside for the fight against Covid-19. The Democratic Republic of Congo had made some commitments to the IMF in terms of transparency.
Yes, in April 2020, the IMF provided $ 363 million in aid to the DRC under the high-speed credit facility. It was to help our country deal with the Covid-19 pandemic. This support was more specifically focused on managing health risks, ie the health expenditures that were exceptional, but also on mitigating the effects of the sharp decline in economic activity and tax revenues. The most anticipated supporting documents concerned expenses that are directly linked to the health effort. And besides, these expenses were not the most important part of the expenses. Support documents were provided gradually as they had to be collected across the country. In addition, they continue to be collected and published on the website of the Ministry of Health.
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