World Bank Comes to Congo’s Aid with $1 Billion Package

CONGO (Capital Markets in Africa) – The World Bank approved a $1 billion aid package for the Democratic Republic of Congo in a sign of confidence that the country’s new government can grow revenue and distance itself from a long history of corruption.

The Washington D.C.-based lender agreed last week to spend $800 million on primary-school education and another $200 million on maternal and infant health in the country. President Felix Tshisekedi, who took over Congo last year after 18 years of rule by Joseph Kabila, has made free education his signature policy initiative.

Its implementation has been hampered by lower-than-expected revenue, due in part to the Covid-19 pandemic and a government paralyzed by in-fighting between Tshisekedi and Kabila’s allies who still control most of the country’s institutions.

“It’s the biggest project ever approved by the World Bank in Democratic Republic of Congo,” Jean-Christophe Carret, the World Bank country director for Congo, told Bloomberg in an interview on June 17. “Our support for free primary school, it isn’t to support President Tshisekedi, but because we think it’s a very good measure to improve human capital.”

Five Years
Congo has the third-highest number of people living in extreme poverty, after India and Nigeria, and the average child receives less than five years of schooling, according to the bank.
The free education initiative will cost Congo $1 billion a year and the World Bank will provide about 25% of that over the next three years. Thereafter the government should be able to afford the program on its own despite the fallout from the pandemic, Carret said.

Carret praised the government’s handling of the coronavirus response thus far but cautioned that the pandemic isn’t weakening. Congo had 6,027 known cases of Covid-19 and 135 deaths through Monday.

While Congo will have about $100 million in debt service postponed or canceled by creditors this year due to the pandemic, the World Bank won’t be offering debt relief, Carret said. The bank provides financing for the country at highly concessional rates and a large part of the funds come in the form of grants, he said.

“We think it’s a very good deal for the country,” Carret said. Congo has one of the lowest debt-to-GDP ratios in Africa, according to the World Bank.

Source: Bloomberg Business News