The World Bank is proposing the cancellation of more than 80% of the Democratic Republic of Congo’s debt and hopes this will happen in the first three months of 2003, the bank’s president said on Sunday.
Speaking at the end of a three-day visit to the war-ravaged central African country, James Wolfensohn said the World Bank hoped the DRC’s external debt would be cut from $12-billion to $2-billion.
”We are proposing a cancellation of more than 80% of the debt,” Wolfensohn told reporters in Kinshasa.
Much of the DRC’s debt was accumulated during the long rule of former dictator Mobutu Sese Seko, who was supported for decades by Western nations as a bulwark against the spread of Soviet influence in Central Africa.
The mineral-rich country’s economy has been ravaged by years of mismanagement, corruption and war. The World Bank and the International Monetary Fund cut links with the DRC, then Zaire, in 1993 because of mismanagement and corruption.
Wolfensohn, who was due to travel to Rwanda later Sunday, also said a $450-million loan from the World Bank, which was approved last month, should be used to rebuild the country, focusing on sectors such as education and agriculture.
Congo’s Central Bank Governor Jean-Claude Masangu told The Associated Press the loan would fund improvements in infrastructure, health services and education.
War broke out in the country in August 1998 when Rwanda and Uganda sent troops to back Congolese rebels and oust then president Laurent Kabila. Zimbabwe, Angola and Namibia sent troops to back the government.
A 1999 ceasefire agreement was repeatedly violated by all sides but the peace process began to take hold after Kabila’s January 2001 assassination and the succession of his son Joseph.
The war has claimed more than two million lives, mainly through war-related disease and famine.
Wolfensohn said the fighting needed to stop to allow the economy to recover. ”We can then assist you to win another war which is much more important: this is the war against poverty,” he said.
Wolfensohn said investors would only return once peace was ensured. He said a new mining code, signed by President Joseph Kabila on Friday, was a good start.
The new code reduces taxation on investment in the mining sector to two percent, and encourages joint ventures between the DRC government and foreign private mining companies.
Wolfensohn said the DRC government had done ”an extraordinary job” of cutting the inflation rate from 500% to less than 10% in a year and in maintaining the exchange rate. The DRCo has ”established the basis for international assistance,” he said.
Wolfensohn will also visit Tanzania during his African tour, which is focusing on post conflict rehabilitation and economic recovery. – Sapa-AP