A debt relief programme for the Democratic Republic of Congo (DRC), which had been without a formal International Monetary Fund (IMF) assistance programme since 2006 was put on ice until the central African country amended some components of a USD9 billion infrastructure-for-minerals deal it had signed with China.
However, the two countries finally agreed to amend the terms of one the biggest Chinese investment deal in Africa, but were seen as blocking Congo’s access to much-needed debt relief.
IMF's mission chief for DRC Brian Ames said changes to the deal would now allow Congo to push ahead with a request for debt relief from western donors.
Under the initial deal at least USD3.25 billion was targeted for mining investment while USD6 billion was earmarked for infrastructure development.
The infrastructure aspects of the deal included, 3,215 km of railways, 3,300 km of asphalted roads, 2,738 kilometers of beaten earth roads, 550 km of urban roadways, a 450-bed hospital in Kinshasa, 31 smaller hospitals and 145 health centres around the DRC, two hydro-electric dams, two electricity distribution networks, two vocational training centres, and two airports.
The agreement was also supposed to create a mining joint-venture between Gecamines, the DRC’s own mining entity, and the Chinese in the form of a company in which the Chinese hold 68 percent of the shares and Gecamines 32 percent.
DRC’s Infrastructure Minister Pierre Lumbi said that 150 Chinese engineers and technical experts had already been dispatched to DRC to start work on the project.
However, pressure to alter the deal that allowed Chinese companies to develop a copper and cobalt mine came from western donors that refused to offer Congo relief on historic debt of USD11bn because of concerns over state financial guarantees the deal contained, which could threaten Congo’s ability to manage its debt.
The IMF also feared that the contract, which used Congo's mineral reserves as a guarantee for infrastructure projects, would plunge the central African nation deeper into debt.
The DRC government had on the other hand lauded the contract with China as a cornerstone of Kabila's post-conflict reconstruction policy following decades of dictatorship and a 1998-2003 war that left the former Belgian colony's infrastructure in ruins.
“It will give a firm boost to the rise of agricultural, mining, and industrial production of our country. It is going to improve the purchasing power of the population by reducing the costs of transit between the areas of production and the areas of consumption,” said Lumbi. “This contract is undoubtedly the best which the country has ever signed with foreign investors.”
Did China heard what the DRC minister said and how does it feel following the West’s move to amend the pact that greatly benefited them?
Surprisingly, we did not hear much from the Chinese officials regarding this latest development or the media chose to ignore concerns raised by Beijing?
The fact, however, that the Chinese agreed to the amendment of the pact simply shows that it had to bow-down to the barrage of pressure the West exerted on them or at least realized how DRC had misfired though to their benefit.
It is not a secret that China had been of late trying hard to spread its influence on the African continent as well as exploit its mineral resources.
The New York Times reported two years ago that China imported less African oil, invested less money and spent less on aid than did the United States or Europe.
As an African trading partner, China ranked third, behind the United States and France, while much of that trade was in oil purchased from Sudan, Angola and Nigeria.
However, in some quarters China is frequently seen as yearning for Africa for its oil, gold and other valuable minerals and as a dumping ground for its cheap goods — not for its people or talents, argued New York Times.
Former South African president Thabo Mbeki once noted that Africa’s relationship to China as an exporter of ore and oil and importer of finished goods threatened to become “a replication of that colonial relationship” between Europe and its African possessions a century ago.
The Times noted that whether this was true or not, the perception had been telling.
“In Zimbabwe, Zambia and elsewhere in southern Africa, an influx of Chinese shopkeepers and street traders has pushed locals into bankruptcy. South African textile workers lost tens of thousands of jobs after the 2005 expiration of a global trade agreement allowed cheaper Chinese goods — including knockoffs of traditional African prints — to flood the country,” it reported.
The Times suggested that despite the skepticism on China, one reason it had however been welcomed into Africa was that it can serve as a counterbalance to American influence now that the Soviet Union had vanished from the scene and Russia had been far less active in the region.
However, it has to be pointed out that the Russians have shown keen in doing business with the African continent as seen recently when President Dimitri Medvdev embarked on an African safari that took him to Egypt, Nigeria, Namibia and Angola.
He signed a series of documents ranging from strategic cooperation pacts to energy deals.
After all is said, we remain keen to hear what the Chinese will say regarding the West’s move to ensure that its pact with DRC was amended.
We certainly want to hear whether they think their wings are being clipped, as the battle for control of the African minerals heats up.
Mathew Nyaungwa, Rough&Polished expert, from Namibia
