IMF warns Congo on public spending, customs fraud

The International Monetary Fund (IMF) on Sunday cautioned the Republic of Congo (ROC) government against excessive spending, massive customs fraud and the slow pace of privatisation, saying the country could not yet qualify for extensive debt relief under the enhanced Highly Indebted Poor Countries (HIPC) scheme, AFP reported on Monday. An IMF delegation visiting the country said payments to the civil service, which IMF said was overstaffed, would make it difficult to meet its public spending target of 104 billion CFA francs (US $135 million) for 2001. Although there has been improvement in the Congolese economy as it emerges from a war that ended in 1999, IMF head of mission Philippe Beaugrand said “there was still much to do”, according to AFP. The IMF official said customs fraud at the port of Pointe-Noire was a major economic problem. “There are very, very serious difficulties involving customs fraud at the port of Pointe-Noire,” Beaugrand was quoted as saying. Meanwhile, Congolese finance minister Mathias Dzon admitted that customs fraud was responsible for a 75 percent loss in revenue and that an audit would be immediately put into place. Customs and fiscal revenues account for 40 percent of national budget funds. Budgetary funds rely mostly on revenue from sales of oil. The country produces 271,000 barrels a day. Yet despite considerable oil reserves, Congo is one of the world’s most highly indebted countries, with internal and external debt exceeding some US $40 billion. Congo’s economy is highly nationalised and dozens of state-owned firms have been forced to liquidate. The IMF and the World Bank have been critical of the lack of transparency in managing revenues from oil, and the IMF has requested that the government clarify its relations with the National Congolese Petroleum Company (SNPC), in charge of marketing and selling oil from state-owned operations. On a positive note, the World Bank recently announced it planned to reopen an office it had closed in 1997, when Congo was in the midst of civil war. An estimated 20,000 people have died and another 800,000 people been uprooted in Congo’s protracted political and ethnic conflict, largely pitting northern supporters of President Denis Sassou Nguesso against groups in the more densely populated south.