China agrees to restructure Congo debt

  • Business
  • Monday, 06 May 2019

CAMEROON: China has agreed to restructure debt owed by the Republic of Congo – one of a series of preconditions sought by the International Monetary Fund (IMF) before it grants the debt-laden central African nation a bailout.

The restructuring was agreed April 29 at a meeting between a high-level Congo government delegation and officials in Beijing, Congolese government spokesman Thierry Moungalla said by phone from the capital, Brazzaville.

The details of the restructuring aren’t immediately available, he said.

The Opec member owes state-owned Chinese entities and other creditors including commodity traders Glencore Plc and Trafigura Beheer BV more than US$9bil.

The government has been trying to secure funding from the IMF since March 2017 to revive an economy that barely grew in 2018, after contracting in the two previous years as oil prices declined.

“Congo has just scaled a major hurdle with this debt restructuring with China because it was the most important of the debts that we had to restructure and which was also an obstacle to obtaining the bailout agreement with the IMF,” Moungalla said.

Chinese entities account for about 34% of Congo’s external debt, Moungalla said.

“We take note that Republic of Congo stepped up its discussions on possible debt restructuring with key creditors, including China, to restore debt sustainability,” the fund said in an emailed response to questions on Friday.

“We are currently assessing recent agreement with China.”

China is the largest single creditor nation to African countries, accounting for about 20% of the continent’s external debt, according to the Jubilee Debt Campaign. — Bloomberg


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