Donors pledge US$4 billion for DR Congo’s development

  
Contacts: In Washington: Herbert Boh (202) 473-3548, hboh@worldbank.org;
In Kinshasa: Louise M. Engulu (243) 994 9015, lengulu@worldbank.org

PARIS, 30 November 2007 – International development partners of the Democratic Republic of Congo (DR Congo) on Friday pledged US$4 billion in support of the country’s development, notably the implementation of its Poverty Reduction Strategy Paper (PRSP) over the next three years (2008-2010).

The pledge means DR Congo will receive slightly more than US$1.3 billion a year.

Of the total US$4 billion pledged by bilateral and multilateral donors present at a Consultative Group (CG) meeting in Paris, France (29-30 November 2007), 75 per cent of the money is new, meaning it does not come from previously pledged resources.

Some 140 representatives from 15 donor countries plus 10 international organizations¹ attended the Paris CG, showing strong support for DR Congo’s political and economic stabilization, post-conflict reconstruction, and governance reforms as outlined in its PRSP.

The aim of the meeting was to discuss the progress the DRC has made over the last few years, consider the Government’s vision for development, reinforce the mutually accountable and transparent partnership between the Government and its partners, and continue to mobilize funding in support of its Poverty Reduction Strategy Paper (PRSP) as well as its Programme d’Actions Prioritaires (PAP).

Representatives of the government of DR Congo who attended the CG stressed that its Governance Contract is a safeguard to ensure that its development program is effective. It also reiterated its determination to take the actions necessary to attain the Heavily Indebted Poor Countries (HIPC) initiative completion point – when debt relief becomes irrevocable – by end-2008, at which point it also expects to benefit from additional debt write-offs under the Multilateral Debt Relief Initiative, as well as the Paris and London Clubs.

According to the joint World Bank-IMF Debt Sustainability Analysis, DR Congo’s external debt was an estimated US$11.5 billion in December 2006, and its debt situation will remain fragile and vulnerable to external shocks even after debt relief.

Donors at the Paris CG underlined the need for DRC to undertake key economic and structural reforms that will enable economic growth. This will equally allow the IMF to provide support through a three-year arrangement under the Poverty Reduction Growth Facility (PRGF).

A mission of the International Monetary Fund (IMF) is expected to arrive in DR Congo on December 3, to begin a mission that could lead to an agreement on a PRGF.

The government of DR Congo has also expressed determination in implementing the reforms to ensure that the country achieves double-digit economic growth by end-2009.

The Congolese Government pledged to stay the course in its reforms on transparency, especially with respect to the Extractive Industries Transparency Initiative (EITI) and the Kimberly Process. The Government also committed to ensuring that fresh debts will not further complicate the sustainability of its debt.

On forestry, the DRC authorities confirmed their determination to complete the legal review of forest concessions and to maintain the moratorium. The Government stressed its willingness to protect the second largest rainforest in the world, and the interests of local communities. It made a strong plea to the international community to set up and pilot innovative instruments to pay for carbon and other environmental services provided by the Congolese forests. A consensus emerged on the need to start funding and implementing the proposed new instruments on a pilot basis as soon as possible.

As the majority of Congolese depend on agriculture for their livelihoods and these people tend to be the poorest of the poor, the Government and the donors agreed that agriculture is one of the most important pro-poor sectors.

On mining, the Government reassured its partners that the rights of investors in the sector would be respected, explaining that it has yet to adopt or express its views on recommendations made by a committee appointed to “revisit” mining contracts in the country. The Government has committed to pursuing reforms aimed at improving the management of the sector. The mining sector alone could provide between US$200 million and US$300 million in additional revenue each year to DRC. The IMF estimates that investments of US$3 billion in the mining sector would return mine production to the high levels experienced in the 1980s and help to boost growth to double digits.

Finally, the DRC and its development partners adopted a common declaration on harmonization and coordination of funding support, under which donors would work through 15 thematic groups led by the Government, in order to increase the effectiveness of aid and its minimize transaction costs. The Consultative Group resolved to review, every six months, the progress on harmonization, as well as constraints faced, funding provided, and risks involved.

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For more information, please visit DR Congo of external site:

www.worldbank.org/drc

¹Bilateral donors included Belgium, Canada, China, France, United Kingdom, United States, Germany, Italy, Japan, Netherlands, Norway, Portugal, Spain, Sweden, and Switzerland. Multilateral donors included African Development Bank, Arab Bank for African Development, European Commission, European Investment Bank, International Monetary Fund, Kuwait Fund for Arabic Economic Development, Organization for Economic Co-operation and Development, Saudi Fund for Development, and the United Nations (United Nations Keeping Operations, United Nations Development Programme, UNICEF, FAO, World Food Program), and the World Bank Group (IDA, MIGA, IFC, FIAS).