"DRC opposition says $9 billion Chinese loan deal unfair"
The DRC's main opposition party has opined that the $9 billion loan and investment package with China is "incoherent and unbalanced" and has called for its renegotiation and an international tender.Author: Joe Bavier
Posted: Saturday , 10 May 2008
KINSHASA (Reuters) -
Democratic Republic of Congo's opposition blasted a $9 billion loan and investment package with China as "incoherent and unbalanced" on Friday and called for its renegotiation and an international tender.
China signed the deal with the war-ravaged central African nation in January as part of a continent-wide investment push that has sparked tensions with former colonial masters and international donors.
The contract, presented to the government-controlled parliament on Friday, gives the Chinese mining rights to millions of tonnes of copper and cobalt in exchange for investment to rehabilitate crumbling mining infrastructure.
"It is incoherent, unbalanced ... and forces us to sell off our national heritage to the detriment of several generations," said Jean-Lucien Mbusa, a leading member of the largest opposition party, the Movement for the Liberation of Congo.
"It cannot therefore be accepted in its current state without being entirely reviewed and submitted to international competition," he said in a speech in parliament.
Cash-strapped Congo is struggling to recover from decades of dictatorship under former ruler Mobutu Sese Seko and a 1998-2003 war that left much of the country's infrastructure in ruins.
Congo's Infrastructure Minister Pierre Lumbi, in a speech to MP's publicly unveiling the details the agreement for the first time, called it a "vast Marshall Plan for the reconstruction of our country's basic infrastructure." Under the terms of the deal, some aspects of which had previously been announced by various Congolese government officials, China promised $3.25 billion to revitalise the country's potentially lucrative mining sector.
Another $6 billion will go towards building more than 6,500 km (4,000 miles) of paved roads and railways, two hydro-electric dams, and the rehabilitation of two airports.
The opposition criticised large tax breaks for Chinese companies as well as risks the massive loan could further indebt the cash-strapped former Belgian colony.
Congo is seeking to qualify for debt relief as a Highly Indebted Poor Country (HIPC) under World Bank and International Monetary Fund initiatives (IMF). The IMF last year warned Congo of the possible macroeconomic effects of the loan.
MP's also denounced the decision to cede to Chinese companies mining rights to over 10 million tonnes of copper reserves and around 600,000 tonnes of cobalt, which they say makes the deal heavily lopsided in favour of China.
"The result of simple arithmetic makes the Congolese contribution at least $87 billion," Mbusa said.
The Asian giant has been investing billions of dollars in energy, mining, and infrastructure from Algeria to Angola.
If disbursed, the deal with Congo, which aims to help satisfy China's ever-growing appetite for resources to fuel its rapidly growing economy, will be one of its biggest financial commitments on the African continent.