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As of March 12, the Republic of Congo is launching a 100 billion CFA franc bond issue within the CEMAC zone. The funds will be used for the infrastructure programs in the 2021 budget, and part of the money will also be used to repay the domestic debt to companies. Brazzaville has no choice but to borrow, because despite an agreement reached in 2019 with the IMF, the institution is reluctant to release its aid until Congo has reached agreement on its private debt. Brazzaville continues to pay for the mistakes that led it to the brink of economic abyss a few years ago.
The exercise is something to surprise. One of the ten most indebted countries in Africa, and whose relationship with the IMF is still difficult, launches a bond loan of one hundred billion CFA or about 150 million euros from savers in the Cemac zone. A bond of 6.25%. This is because Brazzaville has no other choice but to hope to implement the projects included in the 2021 Finance Act and to repay part of the huge domestic debt to companies.
Because the IMF money is still waiting. In 2019, however, Congo thought it had done the hard part, that is, reconnecting with the great treasurer in Washington. After years of hidden debt and poor management of oil revenues, the Republic of Congo almost in default called on the IMF for help.
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The latter accepted the principle of $ 448 million in aid and even released a first tranche. But for a year nothing. The IMF has frozen its disbursements while waiting for Brazzaville to find a debt deal oil traders, Trafigura and Glencore, in particular … Debts weighing almost 20% of Congolese GNI.
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In principle, two agreements were found with the merchants, according to several sources. But the IMF has not yet decided on these agreements and their compatibility with the reform program initiated by Brazzaville.
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