After a three-week negotiation marathon, delegations from the Congolese government and the International Monetary Fund (IMF) 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 from mid-June on the planned approximately 1.5 billion dollars.
It has been over a year and a half that President Félix Tshisekedi trying to get the start of these negotiations and sign a program with the IMF. It must be said that the efforts are enormous. First of all, the amount of $ 1.5 billion for a state that is desperately trying to increase these revenues is significant, but the signing of this program, if it occurs in July, could pave the way for other funding. With this program, the DRC would make many commitments.
Reintroduction of VAT
Firstly, there are all those that the government has so far not been able to achieve. Whether it is the reform of the governance of the central bank, with in particular the creation of a new board that must be done before signing, but also the reintroduction of VAT, which will be part of a broader tax reform. Finally, there are efforts for transparency with the prosecution publication of mining contracts. This program aims to increase revenue and redirect it to social spending. One aspect concerns in particular the management of the state’s wage costs and the issue of pensions.
100 hours of trading
This agreement was reached in record time, three weeks, after more than 50 working sessions and more than 100 hours of negotiations. Several points that almost made the negotiations fail: the fulfillment of transparency commitments for the management of Covid funds and, above all, the Central Bank continued to guarantee commitments from the state to the private sector. The government has pledged not to do it again.
This agreement is obviously welcomed by the Minister of Finance Nicolas Kazadi. “It is important to send a signal confirming our desire to bring the Democratic Republic of Congo to good economic and financial practice,” he told RFI.
.
