The Democratic Republic of Congo’s mismanagement of its mining and energy sectors have prompted donors to withhold aid from the African nation.
The resale of a copper project expropriated from Canadian firm First Quantum and reallocation of oil concessions claimed by the U.K.’s Tullow Oil are some of the deals threatening the disbursement of Western aid for DRC, the Financial Times reports.
“There is general discomfort about economic governance and the investment climate. Donors are asking questions before putting in more money,” a senior donor official said. “This is a country with great potential that needs substantial investment. It really needs to demonstrate it is doing everything as transparently as possible.”
The World Bank has suspended USD100 million in budget support and new lending for DRC, while the European Union has also halted the distribution of euro50 million (USD69 million) in budget financing, according to donor officials.
“The World Bank Group has been concerned by the deterioration in economic governance and legal security in recent months. This deterioration threatens potential investment. It also risks undermining the effectiveness of government in mobilizing both its domestic resources and donor supported funding,” said a World Bank spokesperson.
The Paris Club of creditors may also defer the debt rescheduling of DRC’s USD2.9 billion loan, western officials said.