Congo-Brazzaville creditor accuses IMF of ignoring debts

Republic of the Congo updates

The IMF has been accused of ignoring Congo-Brazzaville’s large debts as it considers a bailout for Africa’s third-largest oil producer.

Commisimpex, a construction company owned by a British national, has sued the Central African nation, also known as the Republic of Congo, over unpaid bills worth € 1.2 billion. He wrote to the IMF to demand recognition of his claims alongside Chinese lenders and oil traders before the fund frees cash for the government of President Denis Sassou Nguesso.

In a letter seen by the Financial Times, the company representative called on the IMF to demand “the full and proper registration by the Congolese authorities of the Commisimpex debt in the Congo’s public accounts” and to demand that the government he negotiates with the company.

The IMF’s board is due to consider a three-year rescue plan for Congo-Brazzaville on Thursday.

A dispute over Commisimpex’s claim could exacerbate fears that Sassou Nguesso’s government will not disclose all of its debts.

As a condition of a bailout, the IMF asked Congo-Brazzaville to renegotiate the sour debts it owes China and traders who have granted loans in exchange for crude.

The government excludes Commisimpex’s claim in its figures on public debt, which was around $ 10 billion at the end of 2018. The company’s claim dates back to public works projects dating back to the 1980s. A Congolese court liquidated Commisimpex in 2012 in a tax dispute.

Commisimpex won its case before the French courts and before the International Chamber of Commerce concerning its right to reimbursement. He is now focused on executing his request. In 2017, the company blocked government payments to global bond holders.

Commisimpex also said the government had given a first pledge on revenues from Congolese oil fields. He sues the companies that exploit them.

Jacques-Alexandre Genet, lawyer for Commisimpex, said: “This situation is very irregular, because the IMF has asked the Congo to negotiate with the two other important groups of creditors with which it is in default. It is patently unfair that the IMF appears to favor one group of creditors over others. ”

The IMF did not respond to a request for comment. The government of Congo-Brazzaville declined to comment.

Commisimpex’s request also illustrates how private creditors of African governments are starting to clash with China over debt restructuring.

Beijing has given loans to several African countries to finance infrastructure projects in recent years, but many of them are now deteriorating.

Congo-Brazzaville has taken steps towards debt transparency, including publishing details of the finances of SNPC, its state-owned oil company.

However, information on the terms of oil-backed loans also remains patchy, Global Witness warned in June.

“The IMF board should not sign an agreement” on a bailout without committing to greater transparency on loans, the NGO said.

“This time, the Congo must be forced to implement real transparency and honor its commitments to stop making these opaque and damaging agreements,” Global Witness said.

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