Identifier
Created
Classification
Origin
06KINSHASA806
2006-05-22 16:10:00
UNCLASSIFIED
Embassy Kinshasa
Cable title:
DRC APRIL ECONOMIC REVIEW
how-toVZCZCXRO3096 RR RUEHDU RUEHGI RUEHJO RUEHMR DE RUEHKI #0806/01 1421610 ZNR UUUUU ZZH R 221610Z MAY 06 FM AMEMBASSY KINSHASA TO RUEHC/SECSTATE WASHDC 3921 INFO RUEHXR/RWANDA COLLECTIVE RUCNSAD/SOUTHERN AFRICAN DEVELOPMENT COMMUNITY RUCPDOC/DEPT OF COMMERCE WASHDC RUEHC/DEPT OF LABOR WASHDC RUEATRS/DEPT OF TREASURY WASHDC RUEAIIA/CIA WASHDC
UNCLAS SECTION 01 OF 02 KINSHASA 000806
SIPDIS
SIPDIS
DEPT FOR DRL/IL-LHOLT AND AF/RSA-MHARPOLE
E.O. 12958: N/A
TAGS: ECON EFIN ENRG ELAB EAIR EMIN ETRD PGOV CG
SUBJECT: DRC APRIL ECONOMIC REVIEW
UNCLAS SECTION 01 OF 02 KINSHASA 000806
SIPDIS
SIPDIS
DEPT FOR DRL/IL-LHOLT AND AF/RSA-MHARPOLE
E.O. 12958: N/A
TAGS: ECON EFIN ENRG ELAB EAIR EMIN ETRD PGOV CG
SUBJECT: DRC APRIL ECONOMIC REVIEW
1. (U) Summary
--------------
- Plane crashes continue to plague the DRC's aviation
industry.
- Belgium will lead a donor effort to help the DRC
restructure its civil service.
- A Canadian company launched rehabilitation of one Inga Dam
turbine as part of a multi-year project.
- Employees of the DRC's customs service and Ministry of
Tourism threatened to strike over non-payment of benefits.
- Gecamines' CEO announced plans to reduce the number of
employees.
- Several high-level GDRC officials participated in the
World Bank/IMF's Spring meetings in Washington, D.C.
- The GDRC is on the verge of granting a preferential
import tariff to a Kinshasa-based, Greek-owned industrial
bakery.
- The DRC's income tax collection agency exceeded its first
quarter revenue projection by more than twenty percent.
AVIATION
--------------
2. (U) Three commercial aircraft, two of them U.S.-built,
crashed during the week of April 24. April 26 an Antonov 26
crashed near Lubutu, Maniema province, killing five of 6
people aboard; on the same day a Convair 58 cargo plane
crashed near Amisi, Maniema province, killing all eight
people onboard; and on April 28 a Cessna 208 on a World Food
Program mission crashed in the Ruwenzori Mountains, killing
all three persons onboard. This brings to eleven the number
of commercial aircraft that have crashed in the DRC in 2006.
Fifteen commercial air crashes were reported during 2005.
CIVIL SERVICE
--------------
3. (U) The Belgian Technical Cooperation Agency (CTB) has
agreed to lead a project to restructure the DRC's civil
service, with an estimated cost of 10 million euros.
ENERGY
--------------
4. (U) MagEnergy, Inc, a Canadian-based company launched
rehabilitation of turbines at the Inga II Dam, in
partnership with the DRC's electricity parastatal, SNEL. In
the first phase, MagEnergy will provide USD 12 million to
refurbish one turbine, and in the second phase, it will
finance the rehabilitation of four turbines, at an estimated
cost of USD 110 million. SNEL and MagEnergy estimate that
the projects will increase Inga II's production from about
360 MW to 900 MW.
5. (U) The Minister of Economy signed a decree that will
allow SNEL to give preferential electricity rates to 16
public and private companies, thereby substantially reducing
their bills and SNEL's official income. Many SNEL employees
have publicly expressed their opposition to this decision.
LABOR
--------------
6. (U) Employees of the DRC's customs office (OFIDA)
threatened to strike over non-payment of their performance
bonus for the last quarter of 2005, which they were supposed
to receive January 6. Employees at the Regie des Voies
Aeriennes (RVA),the DRC's airport authority, threatened to
strike for the non-payment of promised school allowance.
7. (U) Ministry of Tourism employees have been striking
since April 12 to press the Tourism Minister to oppose the
Economic and Finance Commission's plan to take control of
the Ministry's revenues and retrocede only an operational
budget. The Ministry currently keeps 80 percent of its
proceeds.
MINING
--------------
8. (U) The CEO of Gecamines, the state mining company,
announced plans to reduce the number of employees from
12,000 to 4,000, although Gecamines does not have any
budgeted funds to pay the mandatory severance packages.
KINSHASA 00000806 002 OF 002
9. (U) A Chinese company, Covec, entered into a joint
venture agreement with Gecamines to restart exploitation of
a copper mine in Katanga province. Covec has a 72 percent
interest in the joint venture and has already reportedly
contributed USD 4 million to the project.
PUBLIC FINANCE
--------------
10. (U) The GDRC is expected to grant a preferential wheat
flour import tariff to the Union de Panification de Kinshasa
(UPAK),a Greek-owned industrial bakery. UPAK has asked the
GDRC to decrease its tariff on imported flour from 35.6
percent to 3 percent. UPAK would be the only flour importer
to receive this tariff reduction. (Note: As a result, the
flour UPAK imports would cost less than what it buys from
the U.S. company Midema/Seaboard, which has milling
operations in the DRC. End note.)
11. (U) The Ministers of Finance and Budget, and the
Governor of Central Bank attended the Spring IMF/World Bank
meetings in Washington, D.C.
12. (U) The DRC's Council of Ministers approved the merger
of two commercial banks - the private Congolese Bank (CB)
and the publicly-owned Congolese Bank Union (UBC).
13. (U) Japan has donated USD 3.2 million of rice to the
GDRC for monetization, to support reconstruction and
rehabilitation projects.
14. (U) April 7, Hubert Efole replaced Pierre Maloka as the
Minister of Economy. Maloka had only held the position, a
RCD/G post, since November 2005.
INFLATION
--------------
15. (U) Post's market basket survey recorded an inflation of
0.9 percent this month. The twelve-month inflation average
now stands at 0.0 percent.
EXCHANGE RATE
--------------
16. (U) Week ending 04/08 04/15 4/22 4/29
CENTRAL BANK RATE 441 440 440 439
PARALLEL MARKETS:
KINSHASA 440 440 440 435
LUBUMBASHI 440 440 440 440
MBUJIMAYI 440 440 440 440
KISANGANI 440 440 440 440
GOMA 440 440 440 440
BUKAVU 440 440 440 440
MEECE
SIPDIS
SIPDIS
DEPT FOR DRL/IL-LHOLT AND AF/RSA-MHARPOLE
E.O. 12958: N/A
TAGS: ECON EFIN ENRG ELAB EAIR EMIN ETRD PGOV CG
SUBJECT: DRC APRIL ECONOMIC REVIEW
1. (U) Summary
--------------
- Plane crashes continue to plague the DRC's aviation
industry.
- Belgium will lead a donor effort to help the DRC
restructure its civil service.
- A Canadian company launched rehabilitation of one Inga Dam
turbine as part of a multi-year project.
- Employees of the DRC's customs service and Ministry of
Tourism threatened to strike over non-payment of benefits.
- Gecamines' CEO announced plans to reduce the number of
employees.
- Several high-level GDRC officials participated in the
World Bank/IMF's Spring meetings in Washington, D.C.
- The GDRC is on the verge of granting a preferential
import tariff to a Kinshasa-based, Greek-owned industrial
bakery.
- The DRC's income tax collection agency exceeded its first
quarter revenue projection by more than twenty percent.
AVIATION
--------------
2. (U) Three commercial aircraft, two of them U.S.-built,
crashed during the week of April 24. April 26 an Antonov 26
crashed near Lubutu, Maniema province, killing five of 6
people aboard; on the same day a Convair 58 cargo plane
crashed near Amisi, Maniema province, killing all eight
people onboard; and on April 28 a Cessna 208 on a World Food
Program mission crashed in the Ruwenzori Mountains, killing
all three persons onboard. This brings to eleven the number
of commercial aircraft that have crashed in the DRC in 2006.
Fifteen commercial air crashes were reported during 2005.
CIVIL SERVICE
--------------
3. (U) The Belgian Technical Cooperation Agency (CTB) has
agreed to lead a project to restructure the DRC's civil
service, with an estimated cost of 10 million euros.
ENERGY
--------------
4. (U) MagEnergy, Inc, a Canadian-based company launched
rehabilitation of turbines at the Inga II Dam, in
partnership with the DRC's electricity parastatal, SNEL. In
the first phase, MagEnergy will provide USD 12 million to
refurbish one turbine, and in the second phase, it will
finance the rehabilitation of four turbines, at an estimated
cost of USD 110 million. SNEL and MagEnergy estimate that
the projects will increase Inga II's production from about
360 MW to 900 MW.
5. (U) The Minister of Economy signed a decree that will
allow SNEL to give preferential electricity rates to 16
public and private companies, thereby substantially reducing
their bills and SNEL's official income. Many SNEL employees
have publicly expressed their opposition to this decision.
LABOR
--------------
6. (U) Employees of the DRC's customs office (OFIDA)
threatened to strike over non-payment of their performance
bonus for the last quarter of 2005, which they were supposed
to receive January 6. Employees at the Regie des Voies
Aeriennes (RVA),the DRC's airport authority, threatened to
strike for the non-payment of promised school allowance.
7. (U) Ministry of Tourism employees have been striking
since April 12 to press the Tourism Minister to oppose the
Economic and Finance Commission's plan to take control of
the Ministry's revenues and retrocede only an operational
budget. The Ministry currently keeps 80 percent of its
proceeds.
MINING
--------------
8. (U) The CEO of Gecamines, the state mining company,
announced plans to reduce the number of employees from
12,000 to 4,000, although Gecamines does not have any
budgeted funds to pay the mandatory severance packages.
KINSHASA 00000806 002 OF 002
9. (U) A Chinese company, Covec, entered into a joint
venture agreement with Gecamines to restart exploitation of
a copper mine in Katanga province. Covec has a 72 percent
interest in the joint venture and has already reportedly
contributed USD 4 million to the project.
PUBLIC FINANCE
--------------
10. (U) The GDRC is expected to grant a preferential wheat
flour import tariff to the Union de Panification de Kinshasa
(UPAK),a Greek-owned industrial bakery. UPAK has asked the
GDRC to decrease its tariff on imported flour from 35.6
percent to 3 percent. UPAK would be the only flour importer
to receive this tariff reduction. (Note: As a result, the
flour UPAK imports would cost less than what it buys from
the U.S. company Midema/Seaboard, which has milling
operations in the DRC. End note.)
11. (U) The Ministers of Finance and Budget, and the
Governor of Central Bank attended the Spring IMF/World Bank
meetings in Washington, D.C.
12. (U) The DRC's Council of Ministers approved the merger
of two commercial banks - the private Congolese Bank (CB)
and the publicly-owned Congolese Bank Union (UBC).
13. (U) Japan has donated USD 3.2 million of rice to the
GDRC for monetization, to support reconstruction and
rehabilitation projects.
14. (U) April 7, Hubert Efole replaced Pierre Maloka as the
Minister of Economy. Maloka had only held the position, a
RCD/G post, since November 2005.
INFLATION
--------------
15. (U) Post's market basket survey recorded an inflation of
0.9 percent this month. The twelve-month inflation average
now stands at 0.0 percent.
EXCHANGE RATE
--------------
16. (U) Week ending 04/08 04/15 4/22 4/29
CENTRAL BANK RATE 441 440 440 439
PARALLEL MARKETS:
KINSHASA 440 440 440 435
LUBUMBASHI 440 440 440 440
MBUJIMAYI 440 440 440 440
KISANGANI 440 440 440 440
GOMA 440 440 440 440
BUKAVU 440 440 440 440
MEECE