Congo: Brazzaville needs new money and is launching a loan this Friday

From this March 12, the Republic of Congo launches a bond issue of 100 billion CFA francs within the CEMAC zone. The funds will be devoted to the infrastructure programs contained in the 2021 budget and part of the money will also be used to repay the domestic debt owed to companies. Brazzaville has no choice but to borrow because, despite an agreement made in 2019 with the IMF, the institution is reluctant to release its aid until the Congo has reached an agreement on its private debt. Brazzaville continues to pay for the mistakes that led it, a few years ago, to the brink of financial abyss.

The exercise is something to surprise. One of the ten most indebted countries in Africa and whose relations with the IMF are still difficult, launched a bond loan of one hundred billion CFA, or about 150 million euros from savers in the Cemac zone. A loan remunerated at 6.25%. It is because Brazzaville has no other choice to hope to carry out the projects included in its 2021 finance law, and to repay part of the enormous domestic debt owed to companies.

Because the IMF money is still waiting. In 2019, the Congo thought, however, to have done the hardest part, that is to say to reconnect with the great treasurer of Washington. After years of hidden debts and mismanagement of oil revenues, the Republic of Congo, almost in default, called on the IMF for help.

The latter accepted the principle of aid of 448 million dollars, and even released a first tranche. But for a year nothing. The IMF has frozen its disbursements while waiting for Brazzaville to find an agreement for the debts contracted with oil traders , Trafigura and Glencore, in particular Debt which weighs nearly 20% of Congolese GNP.

Two agreements in principle were found with the traders according to several sources. But the IMF has yet to decide on these agreements and their compatibility with the reform program initiated by Brazzaville.