Press Release: IMF and World Bank Announce US$12.3 billion in Debt Relief for the Democratic Republic of the Congo

IMF News, July 1, 2010

Source details

Canonical URL: Press Release: IMF and World Bank Announce US$12.3 billion in Debt Relief for the Democratic Republic of the Congo

The International Monetary Fund (IMF) and the World Bank's International Development Association (IDA) decided to support US$12.3 billion in debt relief to the Democratic Republic of the Congo (DRC).
Total debt service savings: US$12.3 billion.
- Under the enhanced Heavily Indebted Poor Countries (HIPC) Initiative: US$11.1 billion.
- Under the Multilateral Debt Relief Initiative (MDRI): US$1.2 billion.
Debt relief by creditor:
- IMF: US$491 million.
- World Bank’s IDA: US$1,832 million.
- Remainder expected to come from bilateral and commercial creditors.
As a result of this relief, the DRC will no longer face a heavy debt service burden in relation to its revenue and foreign exchange resources.

The Boards determined the DRC has implemented the policy measures (“triggers”) required to reach the completion point, at which debt relief from both the HIPC Initiative and MDRI becomes irrevocable.
Triggers included:
- Satisfactory implementation of the country’s poverty reduction and growth strategy.
- Maintenance of macroeconomic stability.
- Improvements in public expenditure and debt management.
- Improved governance and service delivery in key social sectors such as health, education and rural development.
HIPC process timeline and related facts:
- The HIPC process for the DRC started in July 2003 when the Executive Boards of the IMF and the World Bank agreed it had met the requirements for reaching the decision point.
- The DRC becomes the 30th country to reach the completion point under the HIPC Initiative.
- To date, 36 HIPC countries have reached their decision points, of which 30, including the DRC, have reached the completion point.
- Note dates of Board meetings: the IDA Executive Board met on July 1, 2010 and the IMF Executive Board met on June 30, 2010.

IMF Mission Chief for the DRC, Brian Ames:
- Highlighted significant progress in strengthening macroeconomic policy management and performance following a decade-long conflict that destroyed the country’s economic and social infrastructure.
- Noted the conditions for reaching the HIPC completion point provided a policy reform framework guiding efforts to enhance macroeconomic stability, address weaknesses in public financial management and economic governance, and reform the social sectors.
- Emphasized progress in these areas sets a solid foundation for advancing the country’s development agenda.
World Bank Country Director for DRC, Marie-Françoise Marie-Nelly:
- Recognized the government’s huge efforts toward reaching Completion Point and described this as potentially a turning point in DRC’s history.
- Identified essential next steps: strengthening the rule of law, improving governance—especially in the oil and mining sectors—and improving the business climate to benefit the most vulnerable Congolese citizens.

The HIPC Initiative (launched in 1996):
- Purpose: create a framework in which all creditors, including multilateral creditors, can provide debt relief to the world's poorest and most heavily indebted countries to ensure debt sustainability, and thereby reduce constraints on economic growth and poverty reduction imposed by unsustainable debt-service burdens.
The MDRI (created in 2005):
- Purpose: reduce further the debt of eligible low-income countries and provide additional resources to help them reach the Millennium Development Goals (MDGs).
- Under the MDRI, three multilateral institutions—the World Bank’s International Development Association, the International Monetary Fund and the African Development Fund—provide 100 percent debt relief on eligible debts to qualifying countries normally at the time they reach the HIPC Initiative completion point.

International Monetary Fund
- Alistair Thomson
- +1 202 623 6312
- AThomson2@imf.org
The World Bank
- Melanie Zipperer
- +1 202 468 9841
- mzipperer@worldbank.org

Press Release No. 10/274 — July 1, 2010