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Congolese Prime Minister Anatole Colinette Makoso admitted on Monday that the country is facing financial difficulties and pledged to reduce the recent increase in debt.
“Due to the health crisis, our financial difficulties have increased our debt and reduced our solvency. Therefore, we must do everything possible to make public debt sustainable. As of December 31, our debt is currently close to 6 trillion CFA franc in 2020, that is 98% of GDP. Our goal is to reduce it to below 70% of the GDP set by the CEMAC community standard,” Anatole Collinette Makoso in the capital Brazza Will told the National Assembly.
Prime Minister Makoso’s speech was delivered after Chinese President Xi Jinping agreed to restructure Congo’s huge debt, which prevented the Central African country from resuming negotiations with the International Monetary Fund (IMF).
Congolese Finance Minister Rigobert Roger Andre stated that President Denis Sassou Nguesso “raised questions” during the phone call with Xi Jinping and “proposed a second restructuring of the debt.”
Andre told reporters that “Chairman Xi Jinping approved” this request.
“This reorganization is to allow the country to have more resources to meet its internal needs and to remove obstacles to establishing a good relationship with the International Monetary Fund.”
Andre said that experts from China and Congo will be responsible for determining the terms of the new agreement.
In 2019, China has already done so, which has allowed the country to sign a plan with the International Monetary Fund focused on expanding credit facilities and released $449 million in loans.
However, since then Congo’s debt was assessed at 110% of gross domestic product (GDP), forcing the International Monetary Fund to consider the country’s economy “unsustainable.”
The International Monetary Fund has suspended its support. Due to the drop in oil prices and the spread of Covid-19, the country has been hit by both economic and health crises.
According to the government, Congo owes China 1,300 billion CFA francs (US$2 billion), and as of December 31, 2020, the country’s total debt is currently 6,016.5 billion CFA francs (more than US$10 billion).
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