World Bank commits $1 billion to Democratic Republic of Congo

18 December 2006

The Bank will offer $1 billion to newly-elected President Joseph Kabila in support of his five selected priority areas: health, energy, infrastructure, education and good governance.

Despite renewed hopes about the DRC’s future following its first free elections in over 40 years, many observers remain skeptical. In a Voice of America article, Carina Tertsakian from Global Witness cautions that “even if there are significant changes, it is going to take a lot of effort to reverse what has effectively been decades of very entrenched corruption and fraud from the top down.”

A parliamentary investigation into contracts signed during the war and under the transitional government, known as the Lutundula Commission, concluded that many of the contracts should be renegotiated or cancelled: a difficult prospect. “The group in Congo that has benefited the most from these mining contracts has been Kabila’s entourage,” adds Patricia Feeney from the British NGO Rights and Accountability in Development (RAID).

Feeney stressed that the reluctance of donors, especially the World Bank, to push for the renegotiation of disadvantageous mining deals may limit prospects for meaningful change: “The World Bank has shown loss of nerve. We have noticed a desire to protect Western companies that have acquired some of these assets.”

The World Bank has committed over $2 billion in loans and grants since 2001, when it resumed operations in the DRC. The World Bank Group’s emphasis on investment in the natural resource sectors as a key driver of economic growth has aroused concerns. It has supported the revision of DRC’s mining, forest and investment codes, as well as the restructuring of the state-owned mining and utility companies, with an aim to increasing private sector participation in resource extraction and in power generation and distribution. 

In absence of government capacity to monitor, mitigate and manage the impacts of this investment, some observers fear that the country is effectively being carved up for the taking by private companies, with little regard for benefits to the Congolese public, the rights of local communities, or protection of the environment.

Resources

• World Bank supports Kabila’s five pillars, Angola Press, December 14, 2006 (Angola Press website)
• DRC’s Kabila Faces Unruly, Corrupt Mining Sector by Phuong Tran, Voice of America, December 15, 2006 (VOA website)
• Civil society calls on DRC President to renegotiate disadvantageous mining contracts, Bank Information Center, December 6, 2006 (BIC website)
• MIGA plans major involvement in DRC mining industry, Bank Information Center, September 7, 2006 (BIC website)