UNCLAS SECTION 01 OF 02 KINSHASA 001918

SIPDIS

SIPDIS

E.O. 12958: N/A
TAGS: EFIN ELAB EMIN EPET ECON PGOV CG
SUBJECT: DRC NOVEMBER MONTHLY ECONOMIC REVIEW

REF: A. KINSHASA 1688


B. KINSHASA 1735

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Summary
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1. (U)
- The GDRC increased fuel prices.

- The EU announced it will double its aid to the DRC for 2008-2013.


- Transparency International has once again ranked the DRC as one of
the most corrupt countries in the world.

- The DRC has joined the new Africa Diamond Producers Association.

- According to Post's market basket survey, November consumer
prices increased by one percent over October; year-to-date
cumulative inflation is 24 percent according to Post, and 19 percent
according to the IMF.

- The Congolese Franc (CF) remained stable against the USD in
November. End summary.

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Energy
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2. (U) The GDRC raised fuel prices in November, increasing the cost
of gasoline from 490 Congolese Francs (CF) per liter to 510 CF/liter
(just under USD 1/liter, or almost USD 4/gallon), and diesel from
480 up to 500 CF/liter. The last increase occurred in July.

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Finance/Development Aid
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3. (U) The European Union announced it will double its DRC
development aid package to USD 544M for 2008-2013, plus an
additional 25 percent if the DRC implements certain good governance
reforms.


4. (U) BCECO, the GDRC's primary World Bank project contracting
agency/implementer, has accused a Canadian NGO of defrauding it of
nearly USD 100,000 (Note: BCECO itself has been accused of
mismanagement in its disbursement of World Bank funds. End note).

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Governance
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5. (U) Transparency International has again ranked the DRC among the
most corrupt countries in the world in its 2006 Corruption
Perceptions Index. The DRC sank to 156th of 163 countries, down
from its 2005 ranking of 144 of 158 countries.

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Labor
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6. (U) SNCC (the DRC railway parastatal) employees, on strike since
July for payment of almost two years worth of salary arrears,
returned to work despite a failure to resolve their demands. Goods
began moving from Ilebo, on the Kasai River upstream from Kinshasa,
southwards toward Kananga, Western Kasai province. Both Western and
Eastern Kasai provinces have suffered shortages of goods and high
commodity prices as a result of the SNCC strike.

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Mining
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7. (U) GDRC officials attended the formal launch of the African
Diamond Producers Association in Luanda, Angola. The new group
consists of twelve member-countries, including the DRC, and seven
observer countries (reftel A).


8. (U) Violence nearly erupted in Kolwezi, Katanga province after
the Gecamines (DRC copper/cobalt mining parastatal) security force
impounded three trucks suspected of illegally removing copper/cobalt
ore from one of its concessions (reftel B). This was evidently part
of a recent Gecamines attempt to reduce theft and illegal export of
unconcentrated ores in Katanga. Various security forces fired shots,
but no injuries resulted.

KINSHASA 00001918 002 OF 002




9. (U) Over 50 artisanal diamond miners near the town of Tshikapa,
Western Kasai province, were reported missing after flooding from a
November 24 storm swept them from a river islet where they had been
digging for alluvial diamonds.

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Trade
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10. (U) Representatives of the GDRC and of the Congolese Chamber of
Commerce (FEC) attended the Beijing Summit of the Forum on
China-Africa Cooperation.

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Consumer Inflation Rate
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11. (U) Post's market-basket survey indicates a one percent November
consumer inflation rate and a year-to-date cumulative inflation of
24 percent. The IMF calculates year-to-date inflation at 19 percent
through November.

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Exchange Rate
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12. (U) The Congolese Franc (CF) was stable against the USD in
November, at 532 CF/USD on November 1 and 535 CF/USD on November 30,
according to the Congolese Central Bank's official exchange rate.

Week ending 11/10 11/17 11/24 11/30

Central Bank Rates: 530 532 534 534
Parallel Rates
Kinshasa 530 535 540 540
Lubumbashi 525 530 530 530
Mbuji-Mayi 530 530 525 530
Bukavu/Goma 535 535 530 535
Kisangani 530 535 530 530
Matadi/Boma 530 530 535 535
DOUGHERTY