DRC FEBRUARY ECONOMIC REVIEW

UNCLAS SECTION 01 OF 02 KINSHASA 000320 SIPDIS SIPDIS E.O. 12958: N/A TAGS: ECON EFIN EINV ELAB ENRG PTER CG SUBJECT: DRC FEBRUARY ECONOMIC REVIEW REF: A. KINSHASA 177 ¶B. KINSHASA 249 ¶C. KINSHASA 178 ¶1. (U) Summary. - The World Bank will spend up to USD 180 million on quick-impact reconstruction projects in the DRC. - The IMF conducted a visit to the DRC to review the status of its current program with the GDRC. - The GDRC has not yet drafted a 2007 budget. - Dredging work is underway to increase the productivity of Inga Dam in Bas- Congo province. - The US Coast Guard visited the DRC to evaluate the security of its maritime ports. End summary. DEVELOPMENT -------------- ¶2. (U) In advance of the March visit of World Bank President Paul Wolfowitz, the WB unveiled plans to spend USD 140-180 million on immediate reconstruction projects in the DRC (reftel A),including urban road repair and internal debt repayment. FINANCE AND INVESTMENT -------------- ¶3. (U) A Washington-based IMF team began a two-week review of the DRC's Staff-Monitored Program on February 24 (septel). Among key issues it examined were the GDRC's overspending in January and February (reftel B) and a concomitant rise in the exchange rate. ¶4. (U) The GDRC has not yet prepared a draft 2007 budget for parliamentary consideration. ¶5. (U) DRC institutions continue to argue over the fee that OCC, the DRC's import-export authority, can impose. While OCC increased the fee to three percent, the Minister of Economy decreed the fee should be returned to 1.5 percent, following lobbying by the Congolese Chamber of Commerce. ¶6. (U) Bralima, a Heineken-owned and operated brewery in the DRC, opened its third bottling line at its Kinshasa plant as part of a USD 60 million investment for 2007. ELECTRICITY -------------- ¶7. (U) SNEL (the DRC's electricity parastatal) acquired new equipment to remove silt at Inga Dam in an attempt to increase electricity production. LABOR -------------- ¶8. (U) Employees of MIBA, the DRC's ailing diamond mining parastatal, appealed to the new Governor of Eastern Kasai to intervene in connection with their salary and food ration arrears. ¶9. (U) Employees of DGRAD, the DRC's administrative tax agency, threatened to strike in protest over the CEO's alleged embezzlement of funds. MINING -------------- ¶10. In preliminary hearings in the criminal case in Katanga province involving Anvil Mining (reftel C),the high military court's president in Kinshasa rejected a defense request that a trial judge be recused on the grounds of bias, according to local media. MARITIME TRANSPORT -------------- ¶11. (U) In compliance with the U.S. Maritime Transportation Safety Act, the US Coast Guard conducted its fourth evaluation of the GDRC's compliance with International Maritime Organization's International Ship and Port Security Code (septel). EXCHANGE RATE and CONSUMER INFLATION KINSHASA 00000320 002 OF 002 -------------- ¶12. (U) February exchange rate figures and consumer inflation will be reported septel. The Congolese Franc (CF) continued to depreciate, with parallel market rates in Kinshasa as high as 560 CF per USD by late February. ¶13. (U) Following the termination of the SNCC (railway parastatal) strike, food and fuel prices that had in some cases tripled have noticeably decreased in Katanga and the two Kasai provinces. For example, gasoline dropped from 1,200 CF per liter to 600 CF per liter, and the price of a kilo of maize meal declined from 1500 CF to 240 CF. MEECE