Congo Republic and China agree on debt restructuring

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Congo Republic’s government said it signed an agreement with Beijing in April to restructure its debt to China, over $2 billion as of 2017.

The Central African country is under pressure to restructure external debt from the International Monetary Fund (IMF), which says long-delayed financial support will only be unlocked once Congo’s debt burden is sustainable.

Government did not provide details of the restructuring, agreed with the Export-Import Bank of China (EximBank) during a recent visit by a delegation from Brazzaville to China.

“This agreement, crucial for our country, is the result of two years of negotiations and promises interesting prospects for further negotiations with our technical financial partners particularly the IMF and the World Bank,” it said in a statement.

It was not immediately possible to reach representatives of China’s EximBank for comment.

Congo Republic’s debt to China amounted to nearly 1.4 trillion CFA francs ($2.4 billion) as of October 2017, according to comments by Prime Minister Clement Mouamba at the time.

In March, the central bank said Congo’s external debt fell to 85% of GDP from 110% last July, when it stood at around $9.14 billion.

Like other Central African oil-producing countries, Congo was hit by low crude prices. Several neighbours, including Chad and Gabon, secured bailouts from the IMF, talks with Congo dragged on since 2017.

The Congolese economy grew 1.9% in 2018, rebounding from a two percent contraction the previous year. It expects growth of 1.2% for 2019.