IMF will halt DRC loan over mining contract

The IMF's country representative Oscar Melhado said the international financial institution had refused a request to extend the expiring programme under which DRC has received half of the planned instalments.

The IMF sought information about a contract the government signed in June 2011 to sell a 25% stake in the public mining company Gecamines to Staker International, a company based in the Virgin Islands.

"The government had requested a six-month extension but we could not accept that," said Melhado.

The halt of the IMF facility, needed to bolster the country's foreign exchange reserves, also puts in jeopardy an US$80m loan from the African Development Bank.

"We recognise that the government has made progress on the macroeconomic front, on the independence of the central bank, on getting control on inflation and the budget, but regarding transparency of the mining sector we have strict conditionality which was not respected," said Melhado.

He added that the IMF was ready to hold talks with the government on a new programme to include reforms on state-held companies.

Source: AFP via I-Net Bridge