IMF approves US $40 million for economic reform

The IMF approved a loan of $40 million for the Democratic Republic of the Congo (DRC) on Tuesday, following a review of its economic performance. The government is to use the loan to foster growth and reduce poverty.

In a statement, the IMF said the Congolese government had stuck to its IMF-backed economic programme.

The Fund's first deputy managing director, Anne Krueger, commended DRC's authorities in their efforts in 2004 to maintain "a relatively constant level of security spending while boosting pro-poor spending, and the continued building up of foreign reserves."

"Nonetheless, major challenges remain in demobilising combatants and successfully holding elections," she said.

Senior Press Officer Frances Handin said the money from the loan would be added to the government's general revenue to reform and restructure the economy.

Krueger said authorities should "ensure good governance and transparency in natural resource activities." The DRC is a mineral-rich country, with diamonds, copper and zinc. She noted that the government planned to adopt laws to combat money laundering and corruption.

With this latest loan, the IMF has now approved $782 million of a $861-million Poverty Reduction and Growth Facility, which the IMF agreed to in 2002 following the official end of a five-year civil war. However, sporadic violence has persisted, particularly in the east of the country, where various armed groups fight for territorial control.

The government is to pay the loan back at an annual interest rate of 0.5 percent, repayable over 10 years with a five-and-a-half-year grace period on principal payments.

On Monday, the IMF approved an additional request from the government for $1.7 million under a programme for heavily indebted poor countries.

Krueger also called on the international community to provide the DRC with further international aid.