(3 minutes read)
· Congolese Prime Minister Anatole Collinet Makosso said that his country was facing financial difficulties and assured to reduce the mounting external debt by taking appropriate steps
· The debt currently stands at nearly CFA Francs 6 trillion as of 31 December 2020, or 98% of GDP, which is not an healthy proportion
· The effort of the country is to bring it down to below the CEMAC community standard set at 70% of GDP
Congolese Prime Minister Anatole Collinet Makosso said that his country was facing financial difficulties and assured to reduce the
mounting external debt by taking appropriate steps. He further said that the present crisis was compounded by the health crisis. Because of the internal problems and the mounting resources needed to bail out the country from the health crisis, the debt has increased in the recent times. The debt currently stands at nearly CFA Francs 6 trillion as of 31 December 2020, or 98% of GDP, which is not an healthy proportion, The effort of the country is to bring it down to below the CEMAC community standard set at 70% of GDP.
Chinese President Xi Jinping has recently agreed to a restructuring of Congo’s debts, which prevents the Central African country from resuming negotiations with the International Monetary Fund (IMF). This move was welcomed by Congolese Prime Minister Makosso. Importantly, in a recent telephone conversation, Congolese President Denis Sassou Nguesso had raised the problem of indebtedness with Chinese President Xi Jinping, who in turn agreed to consider a second restructuring of loans.
This restructuring is to allow the country to have a few more resources to deal for its own internal needs and to lift this obstacle to good relations with the IMF. The Chinese and Congolese sides would be meeting to fix the conditions of the new agreement. Back in 2019, China restructured the debt of Congo, which allowed the country to enter into an Extended Credit Facility-focused program with the IMF to avail a US $449 million loan from the IMF. Since then Congo’s debt has increased and is presently assessed at 110% of the Gross Domestic Product (GDP). The IMF considers such levels of debts as unsustainable. .
In the meantime, The Congo owes China 1,300 billion CFA francs (US$2 billion), according to the government. The country’s overall debt currently stands at 6,016.5 billion CFA francs (more than 10 billion dollars) as of December 31, 2020.
