Contacts:
In Washington, D.C.: Rachel McColgan: 1 + 202-478-5299
rmccolgan@worldbank.org
In Kinshasa: Louise Engulu Mekonda
(243) 98 30 29 14
lengulu@worldbank.org
WASHINGTON, D.C., February 26, 2009—The Executive Board of the World Bank today approved a US$100 million grant for the emergency financial crisis alleviation project in the Democratic Republic of Congo.
The Bank recently established a rapid financing facility in light of the financial crisis, paving the way for a full response to the crisis through a range of instruments. The objectives of the facility are to: (a) help governments anticipate the potential negative effects of the global crisis on their respective economies; (b) help them implement policies whereby the impact of the crisis can be mitigated while market distortions are contained; and (c) provide technical and financial support for ensuring continuity in private sector business and public investment projects so as to ensure that long-term development opportunities are not undermined. This financing facility can cover the expenditure necessary for maintaining economic stability and growth, responding to volatility, and protecting the most underprivileged segments of the population.
The economic growth of the DRC has accelerated considerably since 2002. However, since September 2008, the economic outlook of the DRC has deteriorated severely because of the harsh impact of the international financial crisis on commodity prices, especially in the mining sector. The quick drop in export revenue has also had an immediate adverse effect on the balance of payments equilibrium and foreign reserves.
The objective of the project that was approved by the Executive Board of the World Bank is to help the government alleviate the impacts of the international financial crisis on the Congolese economy, through support for the financing of imports essential to the Congolese economy and the preservation of key social services (education, water, and electricity).
The project will finance three components: (i) imports of key goods and products (US$58 million); (ii) one month’s wages for primary and secondary school teachers (US$16 million); and [(iii)] the government’s water and electricity bills for the first six months of 2009 (US$26 million). For Marie Françoise Marie-Nelly, Country Manager for DRC and Congo-Brazzaville, “It is important for the World Bank and the other partners to support the DRC in this period of turmoil. The DRC is the second country to receive funds under this facility from the World Bank.”
“The architecture of the project is such that it allows for quick support to the Congolese authorities, with speedy disbursement of up to 50 percent after only a month of the operation’s launch,” stated Franck Bousquet, who oversees this project at the World Bank. Also, given the importance and urgency of the situation, this project was prepared in a very short time of only two months. The World Bank and Congolese government teams worked continuously on it during that period, which attests to the priority of the operation.
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