Congo growth strong, more transparency needed – IMF

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Democratic Republic of Congo could exceed a forecast 6.5 percent economic growth in 2011 but must do more to increase transparency in the mining sector, the IMF said on Saturday.

Congo — which has large deposits of copper, cobalt and gold — is gearing up for general elections set for Nov. 28 assuming it surmounts major logistical and funding challenges to ensure the polls go ahead on time.

The vote is seen as crucial for economic and political stability and will be the second since a five-year war ended in 2003, leaving millions dead.

Despite the pressures of funding polls and higher than expected inflation, the country has maintained financial discipline, the IMF said.
“Despite the difficult global economic environment, macroeconomic performance remains strong and economic growth during 2011 could be higher than the 6.5 percent previously projected,” Robert York, the IMF’s chief of mission to Congo, said in a statement.

The announcement came following a quarterly review linked to an existing 3-year US$560 million credit arrangement with the IMF.

Annualised inflation stands at 19.91 percent, higher than the 13 percent target set by the central bank, according to the bank’s website.

Economic activity is being supported by high global prices for mineral exports, but more should be done to raise domestic revenue to tackle poverty, York said.
“Making progress in enhancing governance and transparency in extractive industries is essential,”he added.

Congo’s government earlier this year sold mining assets far below their value in an undisclosed deal, with cash from the sales used to fund the elections, Reuters reported last month.

The government this week said unspecified mining deals with China and India would help pay for the presidential and parliamentary elections whose cost is put at $700 million — about 12 percent of the 2011 budget including donor financing.

The country produced nearly 500,000 tonnes of copper in 2010. Benchmark copper on the London Metal Exchange closed at US$9,076 a tonne on Friday, some 10 percent below record highs from February.

President Joseph Kabila is hoping to be re-elected in November’s polls despite critics saying he has failed to tackle rampant corruption and instability in the east of the country.