The International Monetary Fund (IMF) warned the Democratic Republic of Congo (DRC) on Wednesday to beware of the macroeconomic effects of a planned $5-billion loan from China to modernise the vast African country’s decrepit infrastructure and mining industry.
President Joseph Kabila’s government announced plans last month for the huge loan from China, which would be paid back partly in mining concessions and tolls from road and railways.
”We must beware of the macroeconomic impacts of such a project,” the Washington-based fund’s country representative, Xavier Maret, told a news conference in DRC’s capital, Kinshasa.
”We are not talking about a small amount — we are talking about a very large amount which will have not insignificant macroeconomic impacts on imports, exports, and I would say even on the exchange rate, we must not forget that, [and] in budgetary terms,” he said.
Maret said DRC’s economic growth will quicken to 6% in 2007 from 5% the previous year, but will fall short of the 6,5% the IMF had initially hoped for.
He said inflation was projected to fall to 9% at the end of 2007, in line with a target to bring inflation into single figures from over 21% in 2005. — Reuters